Trends '09

Four Strong Winds to Keep Your Eye On

By Evie Haskell

 

Welcome to the new year where trend reports are popping up like mold on week-old bread:  Attention getting, sometimes interesting and usually quickly disposed of.

Consider this analogous to death and taxes except (for most years) the new year trend report is a bit more fun.  Not wanting to be left out, we’ve decided to join the crowd and have thus spent the past few weeks pouring through reams of analyst notes, spreadsheets of subscriber and programming data, loads of media prognostications, market observations and a few Chinese fortune cookies.  In short, we’ve taken every trend report and analyst projection available and boiled the current season down to a few multiplatform essentials.

Without further ado, here are the four key factors that any multiplatform player who hopes to survive the rigors of 2009 absolutely, positively must pay attention to:

#1: The Economy Sucks ... And That Means You

 

You would have had the spend the last year in inanimate suspension not to know this one.  But we have to include it here because virtually every other multiplatform trend for 2009 springs from it.

Notes MediaBiz (The BRIDGE’s parent co) CEO Paul Maxwell:  “The economy impacts everything we do and it will reshape most of our businesses very quickly.  I think the downturn will start to ease in the fourth quarter and Christmas sales next year are likely to jump by 15 percent, but in the meantime the economy is THE dominate factor to consider” in steering your business.

With most media stocks down in the mid double digits across 2008 and bellwethers such as Time Warner writing down the value of their assets (TW chopped about $25 billion off the value its cable-system, publishing and Internet assets by in the fourth quarter,) the outlook is obviously grim.  The old canard of media as a generally “recession proof” business clearly will not apply this year.  That has already sparked some vicious intra-multiplatform battles (just consider the recent Time Warner/Viacom contretemps or almost anything to do with Yahoo! if your memory needs refreshing) and it leads to the second inescapable trend of the year:

 

#2: The Future Will Be Smaller

 

From your business to your staff to the amount of cereal in your morning breakfast, expect shrinkage.  Again, that should be no surprise.  Pink slips have already blizzarded through multiplatform players such as NBC Universal and Viacom.  On the techno side, everyone from eBay to Electronic Arts to Yahoo has contributed to more than 110,000 jobs lost globally since October.  For the near future, industry observers say Disney and Time Warner and Sony Pictures are in line for more cuts.

Some of the deepest cuts may come in Hollywood as Parks Associates analyst Kurt Scherf recently noted to Reuters, “Indicators for Hollywood don’t look good ... based on the economy and the potential actors’ strike.”

Of course, employees won’t be the only drain.  Core companies will see shrinkage as well.
“Cable subs are likely to drop by as much as 1 percent this year,” says Maxwell.  “DirecTV will be the exception growing just a hair while telco growth will slow dramatically.”

As it did in the latter part of 2008, DISH is expected to lose subs and, Maxwell suggests, “It might even sell if, of course, Ergen gets bored.”

Even the internet will feel the pain in ’08 as Maxwell expects over-the-top plays to struggle to monetize their efforts – although usage will steadily grow – and ad forecasters forecast double digit drops this year in at least two media sectors.

Meanwhile, on the programming side of multiplatform, many observers expect the number of networks to dwindle across 2009.

“Look for programmers to consolidate the number of channels distributed,” says Maxwell.  “They’ve now expanded to the point of no return and I expect they’ll start to collapse some networks back in.  That’s what Discovery has sort of been doing and others will follow suit.”

#3: Mobile Will (Continue to) Gain Usage

 

#4: Renovated Will Trump New

 

Advertising's Big Dive

 

The pain has been especially severe for newspapers, radio and magazines.  (And it’s likely to get worse.  MediaBiz’s Maxwell suggests that by the end of 2009 several major metropolitan areas will have NO daily newspapers.)  As for television, Magna has predicted a slight growth for the past year with most of the pain going to local services.•

MultiMAX

Transitions ...?

 

So … maybe your – and those putative millions of other – analog TVs won’t need a digital converter box next month after all.  Interesting decision by the former Federal Confusion Commission chairs and the President-elect’s team’s to push for a delay in the digital transition set for just four weeks after the Inauguration on Tuesday, Feb. 17.

Interesting because it puts me – for maybe the very first time – in some tentative agreement with the short-timer alien, Kevin Martian, who currently runs that puzzle palace at the Portals.

Yes, the Congress under-funded the converter “solution.”

(An aside: why didn’t the Congress just subsidize cable, satellite or telco video basic packages?  That could have even included a “basic” broadband connection for every household in America.  Suppose the Congress will legislate some money for a transition to HD-radio? … or to the new dual band satellite compatible radios?  Why subsidize broadcasting access to homes when broadcasters already have “free” airwaves to use?)

Yes, any kind of a huge technological change mandated by Congress is going to cause confusion.

Yes, a lot of folks might wake up on a Wednesday without Good Morning America or the Today show.

So what?

They’ll eventually go get what they want … so, I think postponement is a cop-out.  But it sure isn’t a surprise!

Meanwhile, we’re making some transitions.  It is no secret that business-to-business advertising is suffering … indeed, it is no secret that advertising of any kind is suffering.  So we’ll be making some transitions of our own beginning later this month.

The Tuesday, Jan. 13 edition of The BRIDGE will be the last weekly … it will, next month, change to a monthly frequency with even more depth.  The Morning BRIDGE and The Evening BRIDGE will continue to bring you the broadest, most inclusive digest of breaking news and end-of-day Wall Street results every business day.  That doesn’t mean we are reneging on our promise to bring you actionable information uniquely in context and perspective among the current landscape of publications about the myriad aspects of the telecommunications, media and entertainment worlds.

We remain committed to furthering the understanding that these aren’t your grandparents’ businesses anymore. They are all so interrelated that they have become one – as we call it – very competitive multiplatform world.  It goes well beyond the multichannel world I postulated when I created the publication of that name almost 30 years ago.

Here at MediaBiz, our Competitive Intelligence group tracks a startling amount of measurable information about subscribers by provider in every geography; network distribution via headends and more; and even the on-the-ground footprints (which make interesting over-lapping maps) of competitors for your – and others – subscriber dollars.  You’ll be seeing a lot more of proprietary information in the monthly editions of The BRIDGE.