The biggest debate about the future financing of the existing media is simple: Has the advertising revenue lost in recent years gone forever or will some at least return when the recession is over?
Structural versus cyclical decline.
The first modest signs are in that all may not be lost – that the cycle may be turning and that some of the traditional media are starting to show revenue growth at last.
ITV ad revenue is believed to have been up by around 20 per cent last month and forecasts for the year now suggests growth of more than 10 per cent from a low base. The ITV share price, after a near catastrophic collapse, is now at a year high.
Shares in Pearson, publishers of the Financial Times, hit an eight-year high recently after the company announced a 13 per cent rise in profits. Pearson’s education business in the US is strong while FT advertising has been badly hit. But in a sign that newspaper publishing is not a zero sum game FT.com reported a 15 per cent rise in paying subscriptions to 126,000 with limited access registrations up 85 per cent to 1.8 million.
The recent history of the US newspaper industry has been little short of a nightmare with ad revenue falls of 16.6 per cent last year to $37.8 billion.
There are signs that at least the rate of decline of both circulation and ad revenue is at least easing and the industry did better than expected in the first half. Latest figures from Scarborough Research and Nielsen Online show that 100 million adults still read a printed newspaper every day in the US and that newspaper web sites attract 74 million unique users every month.
With effective cost cuts ratings agencies are even moving newspaper companies in the US from “negative” to “stable.”
There is a long way to go and it’s too early to talk about green shoots given the scale of the challenge but at least the worst may be over.