Monday, December 28, 2009

A roundup of media predictions for 2010

Besides offering my own 2010 predictions and revisiting my 2009 predictions to see how I scored, I've gathered (as I did last year) a set of media predictions for 2010 from bloggers and others. Here's what came up in their crystal balls:

From Folio, a set of 115 mostly magazine-related predictions gathered from magazine and ad agency pundits.  A prevailing theme there is that 2010 will be the year of the tablet.

Social media guru Chris Brogan says, "2010 will see consolidations and foldups."

Newser's Michael Wolff says, "Newsweek dies." (He doesn't say precisely when, or whether it's in 2010. But it dies.)

Millenial Media (a mobile advertising network) says 2010 will not be the "Year of Mobile," because that was 2009. They've got 10 predictions for mobile's development in 2010, and (you have to download the PDF linked to at the MMAGlobal link to see this) a very interesting bonus prediction: "There will be content categories, particularly news, weather, travel and real estate only accessed via a mobile device. The advertiser imperative: understand the shifts in content consumption of your consumers."  Surely that shift won't be completed in 2010, but it's one that journalists and publishers should take very seriously.

Emarketer's Geoff Ramsey limits himself to seven predictions.  Read all of them, particularly the seventh:  

The classic interruption/disruption model of advertising, whereby marketers insert unwanted, usually irrelevant ads as a price the consumer must pay to view desired content, will erode, if not fade away. Consumers in the digital age simply have too much control over their media environments these days for marketers to be pushing unwanted banners, buttons or videos. This raises the bar for marketers and their agencies to develop new forms of messages that are not even perceived as ads, but rather as welcome content.
Julia Boorstin at CNBC says control over distribution will shift to consumers, the dominance of social media will continue to grow, and the proliferation of content will force more changes on media giants.

Pat Kitano of Mediatransparent has the right take on local, I think, suggesting that:
Portals believe they can scale and develop the website traffic required to support a local advertisement model. However, communities may develop their own home grown commercial systems for the same reasons why “buy local” is becoming a mantra; and the portals aren’t entitling ownership of their local media systems to the community. For that reason, a community may rather spend its local advertising dollars with an on-the-ground local publisher like Minnpost or OaklandLocal, or even a Chamber of Commerce sponsored local media resource than CNN Local.
She has lots of other good food for thought including:
The stream is more important than website.  Anybody immersed in the social media already knows this. The content stream constitutes a conversation, and can be perceived as far more “real” than a calculated marketing-focused website presentation. The same new paradigm that makes an advertisement seem  promotional applies to websites. Yes, conversations can happen on websites but there are likely many more occurring on Twitter, Yelp, Facebook and other blogs that are deemed more credible because they are third party commentary.
Gordon Plutsky's King Fish Media Think Tank predicts 2010 and reviews 2009 prognostications.

Cory Casciato of Denver Westword has Five Fearless Tech Predictions including "the final death of the paywall... it will hasten the death of any organization that fully commits to it (note to Rupert Murdoch: I encourage you to follow through on your plans to go this route -- pretty please?) and hurt those that experiment with it by bleeding off market share they will take years to recover."

London journalist Adam Westbrook offers his outlook for 2010 in video form: including "lots of new news startups ... lots of journalist moving into NGO territory ... more journalists moving into the field of training ... the year of the hyperlocal ... paywalls in action ... demand for really high quality content will push consumers to want to pay ... journalism in real time ... the battle of the smartphones continues ... augmented reality ... and the watchword for 2010 is innovation."

Min's Media agrees that advertising won't rebound, mobile will be big, and paid content won't fly. They also provide a nice video with insights from Mark Cuban and others.

Addendum Dec. 29: I had bookmarked, but neglected to include Adam Lavrusik's roundup at Mashable, entitled "10 News Media Content Trends to Watch in 2010."

Addendum Dec. 29: Steve Outing's final column at E&P includes a 20/20 hindsight vision of what the 90s and 00s could/should have been like for newspaper publishers, plus a look ahead at 2010 and beyond.

Addendum, Dec. 30: Random Mumbler Jack Lail has rounded up his own favorite media predictions.

Addendum, Dec. 31: Alan Mutter, the Newsosaur, has posted his "un-predictions" for 2010.

Please send me any other published prognostications I've missed.  Interestingly, I checked on most of the bloggers I included in my roundup last year and found nobody sticking their neck out again (perhaps because last year David Cohn put them up to it as his turn hosting the Carnival of Journalism, but that collaboration seems to have gone into remission, or intermission, or something).

Thursday, December 17, 2009

Out on a limb again: Predictions for 2010

Continuing a News After Newspapers tradition, here are my media predictions for 2010:

Newspaper ad revenue: At least technically, the recession is over, with GDP growth measured at 2.8 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted last week that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely. This is a permanently downsized industry. My call for revenue by quarter (including online revenue) during 2010 is: -11%, -10%, -6%, -2%.

Newspaper online revenue (included in the overall prediction above) will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw a drop of 7.1% in the 6-month period ending March 31, and a drop of 10.6 percent for the period ending Sept. 30.  In 2010, we'll see a losses of at lest 7.5% in each period.

Newspaper bankruptcies: I don't think we're out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a "restructuring" is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let's make that at least two.

Newspaper closings and publishing frequency reductions: Yup, there will be closing and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.  

Mergers: It's interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn't turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don't expect Google to buy the New York Times or any other print media.)

Shakeups: Given the fact that newspaper stocks generally outperformed the market (see my previous post), it's not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down.  Don't be surprised to see some boards turn to new talent. If they do, they'll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.

Hyperlocal: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit bizmods. Startups and major media firms looking to enter this "space" with standardized and mechanized approaches won't do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.

Paid content: At the end of 2008, this wasn't yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill's Journalism Online promises a beta rollout soon and claims a client list numbering well over 1000 publications. Those are not commitments to use JO's system — rather, they're signatories to a non-binding letter of intent that gives them access to some of the findings from JO's beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that's unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they're not recommending across-the-board paywalls. So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the Web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.

Gadgets: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don't make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more a la carte choice).  If newspapers are on the ball, they can join Time's consortium and be part of the plan.  Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet un-named) publisher consortium: atomize the content and let me pick individual articles — don't force me to subscribe to a magazine or buy a whole copy. In other words, don't attempt to replicate the print model on a tablet.

Social networks: Twitter usage will continue to be flat (it has lost traffic slowly but steadily since summer). Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less, could Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn't surprise me.

Privacy: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer "opt-in" provisions governing how personal information of Web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.

Mobile (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP's mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that's with tablets just appearing on the playing field. During 2009, Web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.

Addendum, Dec. 18 - Stocks: I accurately predicted the Dow's rise during 2009 and that newspaper stocks would beat the market (see previous post), but neglected to place a bet on the market for 2010, so here goes: The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.

Monday, December 14, 2009

Some hits, some misses: a look back at my 2009 predictions

A year ago, in December 2008, I went on a limb with a raft of predictions for 2009.

Here's my scorecard (send corrections if I've missed anything!):

No other newspaper companies will file for bankruptcy.
  • WRONG. By the end of 2008, only Tribune had declared. Since then, the Minneapolis Star-Tribune, the Chicago Sun-Times, Journal Register Company, and the Philadelphia newspapers made trips to the courthouse, most of them right after the first of the year.
Several cities, besides Denver, that today still have multiple daily newspapers will become single-newspaper towns.
  • RIGHT: Hearst closed the Seattle Post-Intelligencer, Gannett closed the Tuscon Citizen, making those cities one-paper towns. In February, Clarity Media Group closed the Baltimore Examiner, a free daily, leaving the field to the Sun. And Freedom is closing the East Valley Tribune in Mesa, which cuts out a nearby competitor in the Phoenix metro area.
Whatever gets announced this week by the Detroit Newspaper Partnership in terms of frequency reduction will be emulated in several more cities (including both single and multiple newspaper markets) within the first half of the year.
  • WRONG: Nothing similar to the Detroit arrangement has been tried elsewhere.
Even if both papers in Detroit somehow maintain a seven-day schedule, we'll see several other major cities and a dozen or more smaller markets cut back from six or seven days to one to four days per week.
  • WRONG, mostly: We did see a few other outright closings including the Ann Arbor News, and some eliminations of one or two publishing days, but only the Register-Pajaronian of Watsonville, Calif. announced it will go from six days to three, back in January.
As part of that shift, some major dailies will switch their Sunday package fully to Saturday and drop Sunday publication entirely. They will see this step as saving production cost, increasing sales via longer shelf life in stores, improving results for advertisers, and driving more weekend website traffic. The "weekend edition" will be more feature-y, less news-y.
  • WRONG: This really falls in the department of wishful thinking; it's a strategy I've been advocating for the last year or so to follow the audience to the Web, jettison the overhead of printing and delivery, but retain the most profitable portion of the print product.
There will be at least one, and probably several, mergers between some of the top newspaper chains in the country. Top candidate: Media News merges with Hearst. Dow Jones will finally shed Ottaway in a deal engineered by Boston Herald owner (and recently-appointed Ottaway chief), Pat Purcell.
  • WRONG AGAIN, but this one is going back into the 2010 hopper. Lack of capital by most of the players, and the perception or hope that values may improve, put a big damper on mergers and acquisitions, but there should be renewed interest ahead.
Google will not buy the New York Times Company, or any other media property. Google is smart enough to stick with its business, which is organizing information, not generating content. On the other hand, Amazon may decide that they are in the content business... And then there's the long shot possibility that Michael Bloomberg loses his re-election bid next fall, which might generate a 2010 prediction, if NYT is still independent at that point.
  • RIGHT about Google, and Not Applicable about Bloomberg (but Bloomberg did acquire Business Week). The Google-NYT pipe dream still gets mentioned on occasion, but it won't happen.
There will be a mini-dotcom bust, featuring closings or fire sales of numerous web enterprises launched on the model of "generate traffic now, monetize later."
  • WRONG, at least on the mini-bust scenario. Certainly there were closings of various digital enterprises, but it didn't look like a tidal wave.
The fifty newspaper execs who gathered at API's November Summit for an Industry in Crisis will not bother to reconvene six months later (which would be April) as they agreed to do.
  • RIGHT. There was a very low-key round two with fewer participants in January, without any announced outcomes, and that was it.
Newspaper advertising revenue will decline year-over-year 10 percent in the first quarter and 5 percent in the second. It will stabilize, or nearly so, in the second half, but will have a loss for the year. For the year, newspapers will slip below 12 percent of total advertising revenue (from 15 percent in 2007 and around 13.5 percent in 2008). But online advertising at newspaper sites will resume strong upward growth.
  • WRONG, and way too optimistic.  Full-year results won't be known for months, but the first three quarters have seen losses in the 30 percent ballpark. Gannett and New York Times have suggested Q4 will come in "better" at "only" about 25 percent down.  My 12 percent reference was to newspaper share of the total ad market, a metric that has become harder to track this year due to changes in methodology at McCann, but the actual for 2009 ultimately will sugar out at about 10 percent.
Newspaper circulation, aggregated, will be steady (up or down no more than 1 percent) in each of the 6-month ABC reporting periods ending March 31 and September 30. Losses in print circulation will be offset by gains in ABC-countable paid digital subscriptions, including facsimile editions and e-reader editions.
  • WRONG, and also way too optimistic. The March period drop was 7.1 percent, the September drop was 10.6 percent, and digital subscription didn't have much impact.
At least 25 daily newspapers will close outright. This includes the Rocky Mountain Post, and it will include other papers in multi-newspaper markets. But most closings will be in smaller markets.
  • WRONG, and too pessimistic.  About half a dozen papers closed for good during the year.
One hundred or more independent local startup sites focused on local news will be launched. A number of them will launch weekly newspapers, as well, repurposing the content they've already published online. Some of these enterprises are for-profit, some are non-profit. There will be some steps toward formation of a national association of local online news publishers, perhaps initiated by one of the journalism schools.
  • Hard to tell, but probably RIGHT. Nobody is really keeping track of how many hyperlocals are active, or their comings and goings. An authoritative central database would be a Good Thing.
The Dow [Industrials] will be up 15 percent for the year. The stocks of newspaper firms will beat the market.
  • RIGHT, or close enough, although the year isn't over yet. As of Friday, December 11, the Dow is more than 19 percent ahead of its Dec. 31, 2008 closing level. (This prediction is the one that got the most "you must be dreaming" reactions last year.  
  • AND RIGHT ABOUT NEWSPAPERS BEATING THE MARKET (as measured by the Dow Industrials), which got even bigger laughs from the skeptics. There is no index of newspaper stocks, but on the whole, they've done well.  It helps to have started in the sub-basement at year-end 2008, of course, which was the basis of my prediction. Those beating the Dow were: New York Times (+25%), AH Belo (+126%), Gatehouse (+350%), Lee Enterprises (+763%), McClatchy (+296%), Journal Communications (+56%), EW Scripps (+208%), Media General (+388%), Gannett (+65%) and News Corp. (+57%).  Only Washington Post Co. (+6%) lagged the market. Not listed, of course, are those still in bankruptcy.
At least one publicly-owned newspaper chain will go private.
  • NOPE.
A survey will show that the median age of people reading a printed newspaper at least 5 days per week is is now over 60.
  • UNKNOWN: I'm not aware of a 2009 survey of this metric, but I'll wager that the median age figure is correct.
Reading news on a Kindle or other e-reader will grow by leaps and bounds. E-readers will be the hot gadget of the year. The New York Times, which currently has over 10,000 subscribers on Kindle, will push that number to 75,000. The Times will report that 75 percent of these subscribers were not previously readers of the print edition, and half of them are under 40. The Wall Street Journal and Washington Post will not be far behind in e-reader subscriptions.
  • UNKNOWN, as far as the subscription counts go: newspapers and Kindle have not announced e-reader subscription levels during the year. The Times now has at least 30,000, as does the Wall Street Journal (according a post by Staci Kramer last month; see my comment there as well.) There have been a number of new e-reader introductions, but none of them look much better than their predecessors as news readers.  My guess would be that by year end, the Times will have closer to 40,000 Kindle readers and the Journal 35,000.  During 2010, 75,000 should be attainable for the Times, especially counting all e-editions (which include the Times Reader and additions along with the Kindle). The Times' total electronic circulation stood at 53,353 weekdays and 34,435 Sundays for the six months ending Sept. 30.
The advent of a color Kindle (or other brand color e-reader) will be rumored in November, 2009, but won't be introduced before the end of the year.
  • RIGHT: plenty of rumors, but no color e-reader, except Fujitsu's Flepia, which is expensive, experimental, and only for sale in Japan.
Some newspaper companies will buy or launch news aggregation sites. Others will find ways to collaborate with aggregators.
As newsrooms, with or without corporate direction, begin to truly embrace an online-first culture, outbound links embedded in news copy, blog-style, as well as standalone outbound linking, will proliferate on newspaper sites. A reporter without an active blog will start to be seen as a dinosaur.
  • MORE WISHFUL THINKING, although there's progress. Many reporters still don't blog, still don't tweet, and many papers are still on content management systems that inhibit embedded links.
The Reuters-Politico deal will inspire other networking arrangements whereby one content generator shares content with others, in return for right to place ads on the participating web sites on a revenue-sharing basis.
  • YES, we're seeing more sharing of content, with various financial arrangements.
The Obama administration will launch a White House Wiki to help citizens follow the Changes, and in time will add staff blogs, public commenting, and other public interaction.
The Washington Post will launch a news wiki with pages on current news topics that will be updated with new developments.
The New York Times will launch a sophisticated new Facebook application built around news content. The basic idea will be that the content of the news (and advertising) package you get by being a Times fan on Facebook will be influenced by the interests and social connections you have established on Facebook. There will be discussion of, if not experimentation with, applying a personal CPM based on social connections, which could result in a rewards system for participating individuals.
  • NO. Although the Times has continued to come out with innovative online experiments,  this was not one of them.
Craigslist will partner with a newspaper consortium in a project to generate and deliver classified advertising. There will be no new revenue in the model, but the goal will be to get more people to go to newspaper web sites to find classified ads. There will be talk of expanding this collaboration to include Ebay.
  • NO. This still seems like a good idea, but probably it should have happened in 2006 and the opportunity has passed.
Look for some big deals among the social networks. In particular, Twitter will begin to falter as it proves to be unable to identify a clearly attainable revenue stream. By year-end, it will either be acquired or will be seeking to merge or be acquired. The most likely buyer remains Facebook, but interest will come from others as well and Twitter will work hard to generate an auction that produces a high valuation for the company.
  • NO DEAL, so far. But RIGHT about Twitter beginning to falter and still having no "clearly attainable" revenue stream in sight. Twitter's unique visitors and site visits, as measured by, peaked last summer and have been declining, slowly, ever since.  Quantcast agrees.
Some innovative new approaches to journalism will emanate from Cedar Rapids, Iowa.
  • YES, as described in this post and this post.  See also the blogs of Steve Buttry and Chuck Peters.  The Cedar Rapids Gazette and its affiliated TV station and web site are in the process of reinventing and reconstructing their entire workflow for news gathering and distribution.
A major motion picture or HBO series featuring a journalism theme (perhaps a blogger involved in saving the world from nefarious schemes) will generate renewed interest in journalism as a career.
  • RIGHT.  Well, I'm not sure if it has generated renewed interest in journalism as a career, but the movie State of Play featured both print reporters and bloggers.  And Julie of Julie and Julia was a blogger, as well.
Stay tuned for my predictions for 2010!