Media Trends by BusinessWeek's Jon Fine

BusinessWeek's media critic Jon Fine column, MediaCentric, offers worthwhile perspective, focused a bit more on traditional media and advertising, but certainly worthwhile reading.

Fine is taking a leave of absence, but before he left, he listed some good trends and predictions, including:

• Fine says there will be fewer magazines -- a prediction we made back in Jan. However, Fine says that "what happened to city newspapers...will start happening in 2010. Look for the strongest player to outlast weaker rivals in towns and small cities near one another."
  
• Surprising stability among the biggest players. His point: despite their problems, NY Times, Wall St. Journal, Time Warner, NBC Universal, etc. will survive. I agree, though there will be changes (i.e., Comcast's potential investment in NBC Universal).
  
• A bright line divides media haves from media have-nots. Fine feels that people won't pay meaningful sums for content from most terrestrial radio, newspapers, magazines outlets,which are free or cheap to subscribe to. Additionally, most of the biggest comglamerates do not have big print operations, and that those who do want to "switch sides."
  

The implication here is that big media will continue to evolve, and look for ways to bring more value to its users. Fine does not discuss ways this could happen.

That remains one of the big open questions: how to continue to be relevant while establishing a sustainable online business model. I'm not sure what will come first: the sustainable online business model or the way to leverage the online world to provide content that readers/users will value enough to pay for.

For one thing, we still have a ways to go before that happens. I don't think we'll see that yet in 2010.

BusinessWeek's Jon Fine Agrees with Us: Local Media

In Jan. 2009, we issued our annual list of media predictions. One of them was that local cable/TV operators will have a bumpy road but will survive.

In the Aug. 3rd issue of BusinessWeek, media critic Jon Fine wrote that when the recovery returns, local TV is likely to see the biggest return.

Of course, since his column validates our prediction, I agree with him. Check out, "The Big Bounceback? Local TV; Why local TV stations may have several advantages over other media such as national TV and newspapers when the ad market finally turns."

Keep in mind:

"Make no mistake: TV station groups won't be rolling in the roses once a recovery finally arrives. The business will still face numerous challenges. The sector may not be the play so much as picking its survivors—the stations and companies that will best endure. I'm not sure anyone looking to invest in traditional media companies these days is wise, but if you're determined to make this bet, local TV may be where to place your chips."

In other words, it's going to be a bumpy road, just like we said.

Can Local Bloggers Replace Local Newspapers?

According to BusinessWeek's media critic, Jon Fine, one of the problems facing advertisers -- and I'd add PR functions -- is that the demise of local papers makes it much more difficult to reach local markets.

In "Taming the Web for Local Advertisers," Fines' focus in on a company, GrowthSpur, that aims to connect businesses with fragmented audiences.

Fine makes the point that what's replacing local media are local bloggers, but that they're often one or two person operations for whom blogging is a hobby.

What's more, the problem with the fact that a "zillion local blogs have popped up" is that "some of them have real value. But the thing is, there's a zillion of them, and few have followings of any size, so you have to amalgamate ad buys across 10 or 15 blogs to get anything resembling a decent audience."

This fragmentaiton of local media is a significant challenge for organizations that want to reach local markets. GrowthSpur aims to assemble a network of local bloggers for advertiser. That may work nicely for advertisers, because they're paying bloggers for ads, that doesn't work as well for PR efforts since we don't pay for coverage.

And while some bloggers do expect swag or payments from companies to blog about their products or services, that's not appropriate or acceptable for many organizations, including our clients. Even if the bloggers disclose the fact that they've received payment or gifts in kind in exchange for a positive mention in their blogs.

In PR, we've got the same problem: We've got to target more local bloggers than we once had to when we targeted only local newspapers. Clients sometimes think that social media is a ticket to quick and inexpensive buzz -- but it often takes more effort to reach a similar result to a media campaign a few years ago.

Killer App for Online Content: Getting Consumers to Pay for Content

The killer app and Holy Grail of web content is not for people to access content but to get them to pay for that access.

It may have been true, as Samuel Johnson is oft quoted as saying, that "No man but a blockhead ever wrote, except for money."

But there are a lot of us blockheads out there, writing for reasons other than making money.

BusinessWeek's Jon Fine discusses the latest attempts to monetize content in the current issue,
"Charging for Online Content Gets Closer, Two startups, Journalism Online and ViewPass, aim to help battered publishers find ways to get paid for their Web offerings."

ViewPass and Journalism Online are making valiant efforts, but their approaches are still problematic.

Either way, what seems likely is that the business model known as "freemium" will win out. Freemium is a mix of free and premium access.

Free access is better for internal PR functions and their agencies, because it means a wider potential audience for content, and free content is searchable while paid content is often behind a wall so fewer people will access it and the content remains hidden from search engines.

Not much that internal PR functions or their agencies can do right now, but watch and make suggestions how to best understand how to work with whatever the outcome.

Can Marketers Learn Something from the Obama Campaign?

Last month, I wrote about an article in the New York Times Magazine that looked at McCain's campaign from a messaging perspective. Check it out here: New York Times Magazine Article Looks at McCain's Campaign: The Making (and Remaking and Remaking) of the Candidate -- fascinating. I still think it's an interesting look at the McCain campaign.

Jon Fine, media critic at BusinessWeek makes some interesting, contrarian points in his recent column, "Marketing Lessons from Obama's Campaign: Why the winning Presidential strategy, though remarkable, won't sell yogurt, cars, or virtually any other consumer product."

Namely, "a candidate's brief is much different from a product's. Coke may seek to get drinkers of other sodas to try its wares once, or try them again, because in mature categories your gains come only at your competitor's expense. Not so in politics, wherein you do three thins: build awareness, turn on (and turn out) supporters and try to sway undecideds."

To target undecideds, political campaigns generally launch negative ads, which most consumer products avoid.

Fine makes some good points, as usual.

But the Times article also makes some good points. Read 'em both.

Business Week predicts that Rupert Murdoch won't destroy the Wall St. Journal

I think it is safe to admit that selling advertising space on its front-page has not destroyed the Wall St. Journal. The quality of journalism has not declined. The esteem with which the paper is held has not diminished.

Now people are wondering the same thing about the Journal now that Rupert Murdoch owns it.

I don't think Rupe will ruin the Journal. It is his crown jewel. It will feed his Fox Business News. There's no reason to downscale or dumb-down the Journal...it would destroy the value of the franchise.

That's not to say he won't tart it up a bit. But I think we can rule out Page Three pin-up girls (as in the London Sun) or Page 6 business gossip (as in the New York Post's gossip page).

Business Week's media critic, Jon Fine, made the same prediction in the Dec. 10 issue.

I made that same prediction in a post entitled The Wall St. Post on Aug. 10, 2007. Check it out here. That's four months ahead of Jon Fine.

Meanwhile, look for our media predictions in the next few days.

Magazine Death Pool

Business Week's media critic, Jon Fine, wrote about MagazineDeathPool.com, a blog that seeks to predict which magazines will fail and when. The blogger, apparently a magazine publishing insider, does a good job of explaining what turns out to be an epidemic of closings of major magazines. The latest victim: Business 2.0, which it first predicted in Feb. 2006: www.magazinedeathpool.com/magazine_death_pool/business/index.html.

It's not surprising that the Internet is putting pressure on print magazines. (I've already discussed that in earlier posts.) Apparently Time Inc. feels the smart business decision is to close a well-received magazine like Business 2.0, despite a strong circulation. MagazineDeathPool notes that Business 2.0 is "the forgotten business magazine of the Time Inc. empire" which also publishes Fortune, Fortune Small Business (FSB) and Money, and that is "in the same category as another barely-breathing dot-com relic, Fast Company."

What's surprising, though, is this: Time Inc. feels that they can't sell the advertising to support Business 2.0. Remember: circulation for most general magazines is only one sign of a magazine's health -- but it is not the most important. Advertising underwrites subscription fees for most magazines; publishers often reduce subscription fees to boost circulation and in turn to raise fess they can charge advertisers.

Having a strong circulation, which an involved readership, is not enough reason to keep a magazine around.

There's an increase in magazine's death rate because -- and this isn't getting a lot of coverage yet -- advertising is going through a slump. In the tech press, some ad reps blame industry consolidation: too many mergers reduce the number of companies that need to advertise.

From a PR perspective, this is bad news because:
1. Fewer magazines means fewer opportunities for coverage.
2. Fifty percent of any issue of a healthy magazine is advertising copy. Any cut in ad pages = cut in editorial copy -- again reduced opportunities for coverage.
3. Fewer opportunities leads to increased competition for remaining editorial.

Of course, this is not the first wave of magazine closings -- there were a lot following the dot-com crash, and in the early 1990s and in 1987, too. While PR will survive as it embraces new channels (and re-evaluates its priorities of traditional print to online), the challenge for the magazine industry is more significant. To capture readership, particularly those younger than Baby Boomers, magazines will need to find new ways of being relevant...and that may mean moving to a completely non-paper basis.