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Media Predictions for 2009

1. What are "Newspapers" when they're no longer printed on paper?

  • We will need a new definition of "newspaper" as many publications shift to an online-only format, dropping the "paper" part of their business. we suggest calling them "newssites" (based on the soon-to-be outdated newsstand). Calling them "dailies" isn't appropriate either, given a 24/7 news cycle.

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2. Mainstream Media (MSM) will experience at least five changes:

  • Dozens of secondary newspapers and magazines will shift to an online-only model in 2009. Already this year, FinancialWeek announced that it is shifting to online-only this month. The benefits of the online-only model include substantial savings since they no longer have to print, mail and deliver content to newsstands and homes. The downside: They lose three revenue streams – display and classified advertising from the print edition as well as subscription fees – and now rely on online advertising to fund their operations. Online subscription fees have worked for only select media – even the New York Times couldn't make a fee-based plan work.
  • Traditional media that continue to publish print editions will update their formats to include more maps, graphics, lists, ranking and stats, along with shorter articles. These print editions will also be shorter, with some papers – including the Denver Post and Boston Globe – having shed stand-alone business sections. The same holds true for magazines. As Fortune tech reporter, David Kirkpatrick wrote on Twitter: "An indicator of the sorry state of the economy – and the magazine industry: the new issue of Time – a mere pamphlet." (Don't forget: Time and Fortune are published by the same company! And Fortune's current issue is pretty thin, too.)
  • These stand-alone smaller business sections are not likely to achieve their publishers' goal. They are more difficult for readers to find, and provide less coverage of business at a time when the economy is undergoing seismic shocks a time when people need to more closely understand what's happening and how it impacts them. These smaller sections will also be less interesting to advertisers, too, because readers may easily skip over them.
  • The value of content is changing. Traditionally, the value of the entire newspaper or magazine was worth a lot. Now, individual articles (available often by RSS feeds, Tweets, Google or other search engines) are worth more than the newspaper as a whole because technology has enabled us to consume only that which really interests us. It's more efficient this way, but paging through a newspaper ensures you get a broader sense of what's going on. It's a more niche world.
  • Stringers and citizen journalists will become more important. Because of staff cutbacks and bureau closings, Mainstream Media (MSM) may not be able to find and send reporters or crews to cover breaking, important news outside their immediate region. The coverage of the tragic shootings in Mumbai is an example where MSM, including some of the biggest names in journalism, relied on first-hand local reports. For example, CNN uses footage from iReport, and has been posting citizen video footage since Hurricane Katrina. Expect this trend to continue.
  • Expect to see fewer launches of new magazines, and to see some struggling media to call it quits in 2009. Remember that circulation is irrelevant to the publisher's decision to discontinue a magazine if its ad pages/revenue drop. Over the past 18 months, some magazines with circulations in the hundreds of thousands closed because the advertisers stopped buying space.

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3. Online news faces bumps

  • Online newssites are not immune to the ad slowdown. According to ValleyWag, the Gawker-owned Silicon Valley gossip site, "LiveJournal, the San Francisco-based arm of Sup, a Russian Internet startup, has cut about 20 of 28 employees – and offered them no severance, we're told." Expect more layoffs from this part of the sector.

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4. Local news becomes hyperlocal

  • Local coverage continues to be the name of the game for regional news organizations. Hyperlocal is the new local, with news about communities operating within a local market being the forefront of hyperlocal coverage, some say.
  • Local competition in the online space will heat up. Circulation figures for local weeklies probably will remain stable, but online competition will increase. In New England, Boston.com i s competing more aggressively with Gatehouse Media's WickedLocal.com – to the extent that the latter is suing the former for having too many pointers on Boston.com to WickedLocal.

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5. Broadcast media will continue to see significant changes:

  • Niche is the new normal, especially for broadcast. Due to the proliferation of social media sites, people are more likely to subscribe or search for news and information specifically targeting their interests. As Portfolio magazine says: "There's something for everyone, but nothing for everyone." This will make it difficult for marketers to reach broad audiences, with only a few events each year – like the Super Bowl and the Academy Awards – that reach across demographics and interest groups. In fact, that's why we predict that Jan. 20th will be the single biggest media event this year – everyone will cover the Obama inauguration.
  • Increasingly, people will access TV shows with their computers as opposed to watching the shows when they air. For example, there were 1.4 million viewers of the Couric-Palin interview on YouTube and more than 4 million of the SNL skit – that's the power of YouTube and Hulu.com. NY Times' David Pogue already suggested consumers could save money by disconnecting cable, and logging onto the Internet instead to get network feeds and local news coverage.
  • Local cable/TV operators will have a bumpy road because of a significant double whammy: Both advertisers and viewers are fleeing. Local broadcasters will need to find a way to cut costs – which means more layoffs – while stemming the tide of departing viewers. One way may be to follow the lead of NBC, which realized that airing the new Jay Leno show five nights a week at 10pm is cheaper than airing five original 60-minute dramas (even with Jay's $30 million salary). Local TV may find that whatever time they have can be best/inexpensively filled by talk shows.

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6.Twitter will get stronger but many come down with social networking fatigue (SNF)

  • More organizations will jump onto the Twitter bandwagon. However, many will encounter the same problems as with corporate blogs:
    • How often to maintain them?
    • Who should maintain them?
    • How do you measure a successful program?
    • What's the proper balance between communicating the company's interest vs. being so self-serving that no one "follows" them?
    We recently saw a Twitterite whose job is audience development for a major media outlet whose tweets consisted only of featured articles in the publication. The person had 1,612 tweets, but only 44 followers. In comparison, the magazine's official Twitter feed has more than 12,000 tweets, and more than 600 followers. It's a lot of effort with not much payoff. What companies need to understand is that Twitter and social networks are about engaging in conversations.
  • Social networking will continue to grow, but expect a social networking backlash to start. After all, with Twitter, Facebook, MySpace, LinkedIn, and Plaxo, how many ways do we need to connect to the same people? We're feeling social networking fatigue (SNF) based on getting contacts on two different sites from someone we don't know. Meanwhile, the challenge for some sites, like Twitter and Plaxo, is that they have yet to monetize their communities, user base, etc. How long can Twitter survive without generating a revenue stream? The backlash will also affect sites designed to help with lead generation but contain wrong information. There are a number of such sites like Spoke.com, Lead411, JigSaw.com. Spoke.com included a number of people as Birnbach employees who actually work at an acquired client of ours; that's the most egregious, but most of these sites contain misinformation. (Since they're for lead gen, we have not corrected most of the mistakes we've found.)

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7. Online reputation management becomes more important

  • Online reputation management will be much more in-demand function due to the proliferation of sites and ways that people can post information, reviews, etc. about their experiences. For some companies, including Dell and Comcast, online reputation management becomes part of the customer service function. In fact, while understanding and working with social networking sites has been the purview of PR departments and their agencies, there will likely be more of a push by sales and customer service departments and HR departments to be in charge of social networking. In fact, because of media, customer relations and recruiting needs, all three functions (PR, HR and sales) should be working together to maintain and enhance their online reputation.

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8. The Kindle will continue to sell to early adopters

  • The Kindle will continue to sell to early adopters, but it's still more like a beta of what's ahead: bigger, more colorful screens, easier ways to share articles to other users, even a text-to-speech or audio book option so you can throw your book in the car. We expect e-books to become bigger in 2010.

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9. The New York Times will survive, but will have a tough 2009

  • The Times will be faced with two obstacles as it seeks this year to solve its Boston Globe problem, since the Globe is losing an estimated $52 million per year:
    • Internal problem: The entire company is now worth less than the $1.1 billion it paid for the Boston Globe. (As of Jan. 6, its market cap is $1.09 billion; it had been less than $900 million in Nov. 2008). It's difficult to write off that much money, but the company has taken other drastic steps such as cutting dividends to conserve cash and taking out a mortgage on its new headquarters. How much is it worth to them to unload the Globe?
    • External problem: Even at a distressed, Times-financed purchase price, who will want to takeover the Boston Globe? After all, if the Times can't make the Globe profitable, who can?
    • In terms of the Times itself, the challenge is that its attempt to sell online-subscriptions failed several years ago. It's going to need to find ways to increase the value it provides its advertisers, such as its new ad across the bottom of the front page. That said, we don't think the Sulzbergers will sell the Times, as the Bancroft family sold the Wall St. Journal to News Corp.

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10. Rupert Murdoch will make more changes to the Wall Street Journal in 2009

  • So far, Rupe has not corrupted the Journal entirely. (The dire predictions from News Corp critics have not been fulfilled.) Despite initial murmurs, don't expect the Journal to give up its lucrative online subscription fee; in fact, it just raised the fee last year. We don't see much value for readers of the new WSJ Magazine; it seems like a high-end lifestyle concept in search of advertisers.

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11. The Associated Press will consider substantial changes to its model.

  • A number of papers have given the AP notice that they want to cancel their participation in the AP. Most of these are smaller papers – like the Bakersfield Californian, Idaho Falls Post Register, Yakima Herald-Republic and Wenatchee World – seeking to renegotiate down the fees they pay. But some big papers like the Tribune Co. (parent of the LA Times and Chicago Tribune) and the Minneapolis Star-Tribune (no relation) have also given notice.
  • On the one hand, many papers seem to rely on wire service coverage even more in 2009, thanks to closing bureaus in Washington, DC, and foreign capitals. On the other hand, the renewed focus on local coverage means that one article appearing multiple times no longer makes sense. After all, when searching on a topic on Google News, how many links to the same article do you need?
  • All this means is that the AP needs to re-evaluate who it serves and how it serves them.

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Tell us what you think. Did we get it right? Are we way off base? Drop us a note at birnbach@birnbachcom.com.


 
 
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