What a Difference a Year Makes: US TV networks

In this May 20 Video,Kenneth Li notes how TV networks are re-thinking business models. On and off screen, the media industry is returning to comfort zones disturbed in recent years by thousands of alternative sources of entertainment on the internet. Across the media sector, executives were eager to convince advertisers that television is as resilient as it was in the eras they are harking back to. (1m 54sec)

Newspaper Circulation Is Down 3.6%.

The newspapers' decline goes on. Overall circulation is down 3.6%. While a competing medium's decline may be welcome news to the Postal Service, it is not a sanguine sign of health in the ad market.

Advertising has become more cyclical with each passing decade. With the economy in recession since last summer and a large mess to clean up after the financial excesses of the financial excesses of the last decade, do not expect a quick rebound.

The Decline in Newspaper Ad Revenue is Accelerating.

The Wall Street Journal reports today that "The downturn in the newspaper industry is getting worse.

"Last fall, newspaper executives and analysts were caught by surprise by the severity of a slump that took hold last summer. Since the beginning of this year, the rate of decline in advertising revenue has accelerated. Total print and online ad revenue was down 4.8% to $10.6 billion in the first quarter from a year earlier, according to the Newspaper Association of America, compared with its full-year decline in 2006 of 0.3%." You can see the acceleration in the chart from the Journal on the right.

Newspapers continue to increase their internet revenues: their 2006 online ad revenue was up 31.5 per cent. However, at only 5 percent of the total, the internet revenues are no where ner enough to offset the losses.

Direct mail spending continue to grow, but faces a strategic problem. While newspapers are rich in content, they are increasingly poor in ad revenues. Direct mail revenues grow, but the medium is increasingly poor in content.

Coen’s Midyear Forecast for Direct Mail: Up 5%

Robert J. Coen’s midyear forecast for Direct Mail is for a five percent growth in spending to $61.6 billion during the current year. That compares with a growth of only 3.1 percent for total advertising spending. If these figures hold up through the end of the eyear, Direct Mail will have a 21.2 percent market share of the ad market.

Robert J. Coen of Universal McCann is the world's leading authority on advertizing expenditures.

Murdoch Bids $5 Billion for Dow Jones

Want a Journal Mate?

The rule of media empires is he who owns the content rules. Whether content pays is another matter! Wall Street seems convinced that top shelf journalism and having a business model in the black are two diferent things after all. (And I do not mean Conrad Black!)

Rupert Murdoch's News Corp has bid $ 5 billion for Dow Jones, publisher of the Wall Street Journal, Barrons, and the Dow Jones Newwires among other media properties.

Is Murdoch paying too much? he does not think so: "[W]e feel it's worth this. This is the greatest newspaper in America, one of the greatest in the world. It has great journalists which deserve, I think, a much wider audience. We feel that with coming both online and offline, there's a great deal to be done here. It's got great journalists, it's got great management, but it's got a rather confined capital. It's got to be part of a bigger organization to be taken further."

The Bancrofts say "No."

Although the bid is a 67% premium over the stock price that does not mean it is a deal.

Like many traded newspaper companies, Dow Jones has more than one class of shares. In this instance, the Bancroft family, which has a minority of the shares has a voting majority. The Financial Times quotes Michael Elefante, a Dow Jones director and lawyer representing the Bancroft family, as saying “Members of the family and the trustees of trust for their benefit have advised him that they will vote shares constituting slightly more than 50 per cent of the outstanding voting power of Dow Jones against the proposal.”

Stay tuned, the fun has just begun.

2006 Newspapers' print advertising revenues down; internet jumps to $2.7 billion

The Newspaper Association of America, in data reported in the Wall Street Journal, reports that advertisers spent $46.6 billion (down 1.7 percent) on their print ads and $2.7 billion on their internet ads. The newspapers' internet advertising was up 31.5 percent. Although that was in line with the 34 percent increase in all internet advertising spending, it was not enough to offset their losses on the print side. The internet side of the business provides only 5.4 percent of the industry's advertising revenue.


The Journal got its overall internet ad spending data from the Interactive Advertising Bureau.