For a long time now, people - like yours truly - have claimed that the sky was falling and that dramatic change was a foot in the media world. That the digital world was digesting the analog world from the inside out and overtaking all vestiges of the famous brands that were, previously, defined by the media channel they represented. Well that time has come. Today, about 2 million Americans ready the WSJ on paper while close to 14 Million read it digitally. Today, Deutsche Bank cuts NY Times stock to "sell" from ''Hold," saying advertising revenue nationwide has softened. Bloomberg News suggests the reason for this is that the New York Times is one of many media companies that have struggled with declining ad revenue as more consumers turn to the Internet for news and information. Also announced today was that long-time magazine owner Reed Elsevier are to sell up to 150 trade magazines and possibly fire 1,000 staff to get out of the trade magazine market. Reuters says the reason they plan to sell its Reed Business Information arm is to “reduce its exposure to cyclical advertising markets”. Advertising accounts for about 60pc of RE’s revenues. Reed meanwhile have invested $4.1bn on US risk management system ChoicePoint that provides data and analysis to the insurance sector.
These are high-profile examples of the changing landscape.
At the same time, there are (as always) new players emerging with different experiences and different business models which will offer advertisers and the media industry new hope.
Recently, Swedish-publishing giant Bonnier recently bought Time Inc.'s Parenting Group and Time4 Media titles. Through this transaction, Stockholm-based Bonnier and its U.S. magazine partner, World Publications, will become one of the largest consumer publishing groups in America, with 40 titles and annual revenue of more than $350 million.
Under the proposed agreement, Bonnier will acquire 18 titles, which will join World Publications' award-winning, market-leading collection of magazines, such as Saveur, Spa and Islands. The expanded portfolio strengthens the company's position among special-interest magazines and increases its new media opportunities.
Bonnier known as one of the most innovative media companies is planning to do to the magazine world what Murdoch has done to the Newspaper and TV world. And what is that exactly? The European players have more experience working much more efficiently than the legacy US brands, and these efficiencies and innovations into the internet will bring new growth.