Big media executives - notably News Corp.'s Rupert Murdoch and Disney's Robert Iger - this week acknowledged to the Wall Street Journal that, even when the economy does recover, those ad dollars "may never return to major media outlets in full force." It appears that the problems facing news outlets aren't just because of the economic downturn. It appears that this thing called the Internet has had a bit of an impact on traditional business models in the news business.
Are you freakin' kidding me? Please don't tell me that news executives are just figuring out that the Internet might negatively impact the old-school news business. The economy, of course, isn't helping much. But this news media crash - complete with layoffs, declining revenues and shrinking circulation numbers - was in the works years before the economy came crashing down. I can think back at least five years ago - maybe longer - when we started hearing about decreasing ad revenue and circulation in my newsroom.
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Back then, we tech reporters were begging our newsroom managers to let us launch blogs, podcasts and other forms of original online content. But they wouldn't bite. And eventually, newsrooms started to crumble. I actually recall a time when my newsroom froze the office supply budget mid-quarter and we ran out of - get this - notebooks and pens. In a newsroom!! How are you supposed to be mightier than the sword without your pen? Looking back, it was probably that moment that I knew the days of newspapers were numbered. The WSJ story quotes Murdoch as saying:
I recognize that we may never return to record levels, but we do believe [News Corp.] can recapture a large percentage of the advertising that does return. It's why we continue to believe in newspapers and their brand extensions...
I also want to believe in newspapers. After all, they were my first love. But I can't help but shake my head at Mr. Murdoch's outlook and instead agree with the opinion of JPMorgan analyst Imran Khan, also quoted in the Journal:
The company's management believes that newspaper and television earning power will return after the economy bottoms. We, however, think that advertising-supported industries are undergoing a structural shift and, as such, think that newspapers and local TV revenue base will continue to face significant challenges.
You didn't really think all of those readers and advertisers were going to suddenly turn their backs on the Internet and start buying full-page ads again, did you"?