Fortune & Other Media Are Shrinking...Their Offices & Number of Issues They Publish + Why it Matters

We've seen a possible new media trend that involves downsizing — but not necessarily the downsizing you first think of.

Some media are downsizing their office space. As recently noted in the Boston Globe by Jon Chesto (@jonchesto), two local papers, the Salem News and the Herald News as well as publishers from Los Angeles to Miami are moving into smaller offices because they can no longer justify their older, larger offices in part because the papers have laid off staff members. This follows similar moves by the Boston Globe and Boston Herald. According to Chesto, "Many of their buldings are local icons, fuxtres in their respective cities' downtowns. But they were built for a different time in the media business." 

That's a trend that, unfortunately, is likely continue, creating a potential downward spiral. According to Chesto, "The downside: Newspaper companies are left with fewer hard assets, as operating performance declines. That can make them less attractive to potential buyers and lenders," which may make it more challenging to attract digitally-focused enterprises.

The other part of the trend is that Fortune magazine is downsizing its publishing schedule. Not that long ago, Fortune published twice a month or 24 issues. Currently, "Fortune is published monthly with two double issues (June and December), for a total of 14 issues," according to the publishing statement inside the print edition available in the Jan. 2020 issue.

But Fortune just  announced that it is downsizing its publishing schedule as of Feb. 2020 to 10 times a year. The magazine says this will allow for bigger issues and investment in digital content, including a paywall. The magazine will offer three tiers of subscriptions: digital-only ($49), digital plus print ($99) and Premium ($199) which offers videos from Fortune conferences and other exlusive content.

The downshift in the number of publications will make competition to get content into the magazine harder. That said, there may be more digital content, behind the paywall, but that still may limit the influence of a Fortune article.

We do expect other publications to shrink their publishing schedule. Forbes, which used publish twice monthly, now publishes nine times a year "except for four issues combined periodically into two and occasional extra, expanded, or premium issues. Combined, expanded, and premium issues count as two subscription issues." Is that clear? Fast Company and Wired both publish 10 issues a year, down from 12. So "monthly" doesn't mean what it used to.

Forbes has made an effort to push more digital content but has done so by tapping a community of vetted contributors (who, it is important to note, are not reporters).

Ultimately, our point, is that smaller staffs and fewer issues could lead to a few things:

1. Less opportunity for marketers due to reduced frequency of issues and the possibility of smaller print issues.
2. The need for reporters and editors decreases if you're publishing nine issues instead of 24 per year.
3. People will become less reliant on a magazine if they're not seeing it as frequently. One of our colleagues thought that his subscription for Forbes and Fortune had expired because he thought he had stopped receiving them, only to find out the number of issues had decreased. "With more time between issues, I find I don't think about what Forbes or Fortune is doing," he said. "It's out of sight, out of mind, and yet they're still publishing and still interesting. But now they generally make a stir primarily with their signiture issues like the Fobres 400 or the Fortune 500. That's a shame."

All of which could portend to media that's in a downward spiral.

There is some good news: Business Insider has some strong growth trends. BI hopes to reach 1M paid subscribers (currently there are 200,000), generate 1B unqiue visitors per month (currently it gets 375,000/month) and to double its newsroom. We'd love for that to be a new trend.

20 Ongoing Trends That Will Continue in 2020

Each year we identify a set of ongoing trends that have a longer shelf life and will impact the following year.

Here are the ones we think significant for 2020. In some cases, the trends below will have a paragraph of explanation and in other cases, just a headline is enough.

1.   News fatigue. We typically stay away from making predictions about politics but as the election gets closer, Americans are likely to feel overwhelmed by hourly news notifications on their phones and Fitbit or Apple Watches -- the term we've seen is "ringxiety" -- to the extent that they will shut down and look for content that will distract them. There will also be a contingent who will be more motivated to seek out updates but we haven't identified a clever term for them. We don't think there will podcast fatigue in 2020 but that could come, since the glut of podcasts, no matter how compelling, does not yet seem to be abating.

2.  Short news cycles. In a recap of news from 2019, an article mentioned the longest government shut down that ended Feb. 2019. But so much happened in 2019, that a bunch of us in the office had forgotten about the shutdown. Shorter news cycles mean that a lot of news that would have once been significant and memorable gets forgotten as we get hit by more recent news.  

3.  "News deserts" will continue to grow as more news outlets cut back the amount of news they produce, lay off staffs, reduce the number of days they print, etc. News deserts were once limited to rural communities but now large cities are feeling the loss of some outlets.

4.   Fake news and disinformation will continue, probably increase in 2020.

5.  The credibility of news media is under attack. For marketers, reaching customers while they are overwhelmed by disinformation/fraud and when the media is not seen as credible (whether on the right or left), will become harder and more complicated. This is not a political stance. The point is that marketers are going to need to find more effective ways to reach customers at a time of fragmentation and low trust.

6.   Social media will continue to undergo scrutiny and it won’t look good. 

7.   Cord-cutting will continue to attract the media's attention. With so many streaming services, cord cutting won't be cheap but will be a bit easier due to TVs that make it easier -- but not yet seamless -- to binge on the shows you want, regardless of which streaming services you subscribe to.

8.  Most tech reporters at newspapers will continue to focus on FAANG: Facebook, Apple, Amazon, Netflix and Google.

9.   Elon Musk and Tesla will continue to attract undue amount of media attention. 

10. Driverless cars still won't be ready. 

11.  Virtual Reality and Augmented Reality still won’t be everywhere.

12. Blockchain and bitcoin will continue to get media coverage but most consumers still won't have much contact with bitcoin and won't understand how Blockchain affects them.

13. Corporate boycotts & consumer boycotts will continue. Corporate boycotts are when companies pull their ads from specific shows, hosts or networks to protest something said or done. 

14. 3-D content and 3-D printers will still not be as popular as they are cool.

15. Student debt and healthcare will continue to be big issues.

16. Climate change will be an issue. Especially in the wake of the wild fires in Australia and elsewhere.

17. Drug pricing will continue to get a lot of attention. 

18. STEM will continue to be important. 

19. More small colleges will merge or close. Nearly 20 small private colleges in New England have shut down in the past five years, and we expect more as education goals evolve due to declining enrollment and resulting budget problems. There’s also more competition for better-known colleges. Expect more colleges to emphasize career readiness. (Probably because the cost is so high, it’s hard to justify pursuing fields that don’t lead to a career.

20. The future continues to look cloudy – as in cloud computing.

There certainly are more ongoing trends. Let us know us know if you think we left out anything significant. If you want more detail about some of the trends for which we did not provide detail here, check out our blog, where have mentioned some of these quite a lot.

The Gig Economy Isn't Just For Millennials and 5 Other Trends for 2020

Moving beyond tech trends in our prior article, this installment looks at trends that are tech-driven but whose impact goes beyond a specific technology or gadget. While the recently concluded CES highlighted cool and offbeat gadgets we may (or may not) want or need, the following trends takes a bigger perspective at how tech will impact society.

1.     The Gig Economy isn’t just for millennials. Older Americans are entering the gig economy driving for Uber or Lyft, working in food service and retail as well as personal care/health aides. Americans in their 50s or older are gigging either to augment their retirement or because they can’t find steadier work after getting laid off from a corporate job. Since older Americans tend to vote more, we think there could be more attention paid to the gig economy, specially its low wages and no benefits. 

2.     Consumer spending patterns are shifting. It’s usually referred to as the sharing economy for such things as AirBnB to stay in someone’s place instead of a hotel; Citi Bikes or electric scooters to get around, or any number of sites that rent the latest fashion trends. But it’s really a non-ownership economy or a convenience economy. People are forgoing ownership for flexibility, choice and convenience – just as businesses have been opting for cloud computing and Software as a Service (SaaS) to provide similar benefits. This part of the economy is expected to grow to $335 billion in 2025, up from $15 billion in 2014, according to Forbes. That doesn’t include convenience services that are poised to deliver more items (not just take-out orders), faster via drones or other automated technology. Even how consumers manage their spending — via fintech services instead of banks — is changing, and companies need to figure out how to rethink their offerings.  

3.     Streaming — but not owning — content increasingly means you might be able to access the version you want. Streaming content has its benefits but consumers will become increasingly aware of the risks, which include ongoing monthly costs that will increase; content that disappears when a streaming service loses its rights even if you were in the middle of the program); and services that might disappear or abruptly shut down. Also, streaming services are Internet dependent so if you lose Internet access, you lose access to content and services. And, if there are multiple versions of a movie or a song, you may find that you can watch or listen to the one version the service offers —  such as Greedo shooting first in the newest version of “Star Wars: A New Hope,” available on Disney+, rather than earlier versions in which Han shot first. The other risk is that the service may change dramatically, depending on profitability, market conditions, and changes in senior management.) We think these issues may get written about more in 2020. 

4.     Too many podcasts eventually overwhelm listeners. There are already too many podcasts that it's difficult to listen to everything and still get your work done (whatever that may be). Or: there are not enough errands in a day when you can listen and catch up to all the podcasts you've been told you must listen to. We think that, probably by 2021, we will have reached podcast saturation and there will be a backlash, both from advertisers and from listeners so that the number of new podcasts will slow down, if not actually decrease. We're not saying we want that to happen. We just don't have enough time to listen to anything more. 

5.     Some sharing economy will either raise fees or shut down. Making a profit will be more important for some sectors in 2020 than massive debt-fueled growth. WeWork, Uber, Slack and other once high-flying companies with billion-dollar valuations hit a hard patch that may affect other startups this year. Expect more attention to gross margins (a measure of profitability), detailed financial models for startups looking to raise money, and a focus on discipline. High-flyers will need to adjust, and that will have an impact on their growth as they raise prices. For example, Consumers who rely on food delivery services like GrubHub and DoorDash may pay more since restaurants are complaining those services cut into their profit margins. Or some of those services will shut down because they’re not profitable.  

6.     Going cashless will also affect consumer spending. The push to a cashless economy is increasing, and will have at least two effects: Tipping will increase because many of the payment windows offer an easy selection of different percentages for tipping the person delivering the service or good. They tilt the screen and you have to make a choice even if the vendor is handing you a can of soda. (This isn’t the case if you pay in cash.) An increasingly cashless society will make it much more difficult for the poor, who may be unbanked (as the banking industry calls it) and can’t get a credit or debit cards.  

Our final set of trends, to be published next week, will identify ongoing trends that will impact 2020.

As always, let us know if you have any questions or suggestions or if you think we're on or off target.

New York Times Validates Prediction about Local News

A headline in the New York Times validated one of our predictions for 2020 about the further decline of local news. The headline, "The Decimation of Local News Has Lawmakers Crossing the Aisle," while our prediction used the "decimation" in the explanation of why the continued loss of local news is significant.

In fact, the article cites the fear and mistrust in Big Tech that is our top trend for 2020. Here's a key paragraph from the New York Times article:

Anger toward big technology companies has led to multiple antitrust investigations, calls for a new federal data privacy law and criticism of the companies’ political ad policies. Perhaps no issue about the tech companies, though, has united lawmakers in the Capitol like the decimation of local news.

Lawmakers from both parties blame companies like Facebook and Google, which dominate the online ad industry.

 Interestingly, Congress may have a solution:

The proposal would give news organizations an exemption from antitrust laws, allowing them to band together to negotiate with Google and Facebook over how their articles and photos are used online, and what payments the newspapers get from the tech companies. (The bill is backed by the News Media Alliance, a trade group that represents news organizations including The New York Times Company.)

Check out the article for more details. 

We know some people blame the media for not finding a sustainable business model but we don't think it's a failure to adapt. It's just much harder to compete when you have to pay for reporters and editors when your competitors are picking up or linking to your articles, and are not paying or not paying enough to support real journalism.

We hope the proposal is successful.

Additional Set of Predictions for 2020: A Baker's Dozen of Tech Trends

We realize our first set of trends for 2020, published Jan. 8, was a bit of a downer since it identified "Distrust of Big Tech and media fuels anxiety" and "the loss of local news coverage will continue, and will erode trust." (The third trend was neutral: "Streaming services will get a lot of media and consumer attention.")

Here's our second set — a baker's dozen — of trends and predictions for 2020, some of which are more upbeat. 

1. 5G and facial recognition will get lots of attention. 5G and AI have enormous potential as transformative technologies, and we will see lots of articles about how we’re losing the race against China. Among other things, 5G may improve the ability to protect against cyber threats — although, as the good guys improve their capabilities, so do the bad guys. And facial recognition is advancing and could be in more devices — but there's also a downside to it, including privacy and the fact that the technology has a problem recognizing some faces.
2. Artificial Intelligence will be in everything. AI has reached a tipping point and will be built in to many things that weren’t possible just a few years ago. For example, AI can help with drug development because AI can simulate how molecules in drugs will interact with the body. And AI in the fridge can detect spoiled forgotten foods, and notify you to throw it out and order more. 5G + AI can identify patterns before a factory machine or an airplane will likely breakdown. That said, we expect increased demands for regulating AI. 
3. AI will affect in-store retail.  In prior years, we’ve talked about the “Amazonification” or “retailpocalypse,” and we saw a lot of evidence of that in 2019. That certainly will continue in 2020. That said, we think that AI will change how stores stock shelves because they will have better customer intelligence about how customers shop and what they want. There are lots of people who like to shop in stores, and AI-optimized selection may give shoppers a reason to continue to be loyal to the in-store experience.
4. Software is the once and future king. Hardware and gadgets are always going to be important but it’s the software that will add new features that improve the things we already have. Like smart elevators in office buildings that can decide how to more efficiently route passengers based on floor requests. Or cars that look the same but now feature all sorts of sensors to improve safety or can drive themselves. The ability to code will continue to be important, and AI will continue to be in high demand.
5. Everything will be connected, and voice will be increasingly important way to get things done. This won’t happen all at once in 2020 but IoT-enabled appliances and devices will become more mainstream, and increasingly we will use voice, either indirectly through virtual assistants or directly to the device, to operate those devices, whether it’s our thermostats, lights, security system or what’s cooking in the toaster oven. Expect Amazon and Google to offer new capabilities with their own devices and to build those capabilities into devices built by other companies.
6. Drones will experience significant growth in B2B applications. As a consumer gadget, they seem like fun the first time you use them but then what do you do with them? Instead, drones will be used as a B2B tool for deliveries, maintenance, etc. As the get smaller and quieter, drones will appear in sports and arts events to bring us up close to the action in a way we could not participate in before.
7. Robots won’t take over in 2020 but will be more commonplace. While the market for consumer robots like vacuum cleaners will be strong, we feel that real growth in 2020 will be fueled by B2B applications that will drive pilot programs and purchases. We’re already seeing a slow-moving robot in a local supermarket (though we’re not entirely sure what it’s doing there.) We do expect to see growth especially in 2021 in robotics-related jobs such as data labelers (the people who label things so robots can identify them), AI scientists, even robot managers who make sure robots are working effectively.
8. From customer service to mental health and beyond, chatbots will be there to help us. We expect to see more AI-enabled chatbots to help run things more effectively. In the near future, chatbots will not only answer questions more effectively (rather than posting some links for further information based on the topic you enter to get more assistance) but can help you navigate websites so that you can place an order for train tickets, and in one place provide the details, and have the chatbots identify the optimum itinerary for you. Also chatbots may be preferred to humans because no small talk required and sometimes it’s just easier to interact with a faceless, impersonal (nonjudgmental) chatbot.
9. Robocalls won’t go away. The recently signed TRACED Act anti-robocall bill will increase fines and accelerate call-authentication technology but will likely only reduce — not eliminate — robocalls. The reason: robocalls work, especially with the elderly. And the people behind robocalls will continue to find ways to place robocalls until it becomes too expensive for them to do so.
10. The problem of data collection.  There may be two problems about which everyone can agree: 1) The torment of robocalls and 2) the problem of data collection that means everything we do — whether online or offline — is being monitored by someone, even if we don’t know by whom or what they are doing (or intend to do) with our data. Surveys have found that Americans don’t think the trade-off for convenience is always beneficial — especially since they feel a lack of control over their data. We think data collection and privacy are important issues but we’re not sure how much attention they’ll receive outside of data breaches, which, as an acute incident, will continue to generate media attention when (not if) they happen. 
11. More home exercise equipment will offer at-home streaming classes. This is part of a trend to offer screens on devices that didn’t have them before. We expect brands in addition to Peloton will offer streaming classes to get more out of exercycles, treadmills, rowing machines, etc.
12. The age of plant-based “meats” has gone mainstream. Now that a number of fast food chains offer plant-based meats, it’s time to acknowledge this trend as mainstream. We expect additional growth of materials grown in the lab, replacing faux fur, leather, cotton using recycled plastics. That said, we don't expect a lot of coverage about this since newspapers have already done comparisons of the different brands of plant-based hamburgers.
13. There will be a lot of media space allocated to covering outer space. Or the Space Race, Part II since we're living in an age of sequels. Technology is enabling startups to race to the moon to build a lunar economy, and we expect some of the technology to get coverage but the main story will be about the business models and investment opportunities. Meanwhile we also expect coverage about political and legal issues of space as well as articles about things that just a few years ago would have flown under the radar (we've really been trying not to make space puns) such as the growing awareness that too many satellites are causing a traffic jam in space. This space jam began to get recognition as a potential problem in space in 2019 but we think it will get more recognition in 2020. The risk of collisions among satellites is a problem.
    

We will roll out an additional of societal trends (as opposed to the above list of mostly tech trends) in the next week, along with a set of ongoing trends.

In the meantime, please let us know if you agree or disagree with any of the above trends.  

2019 Was A Tough Year for the Media: Nearly 8,000 lost their jobs. It will continue in 2020

Last year started off badly for US journalism, with more than 1,000 job loses by February. Unfortunately, that trend continued, with more than 7,800 layoffs by December, according to a Business Insider article.

That's a startling number.

For context, BI noted that "it's estimated that some 5,000 media jobs were cut from the market from 2014 to 2017." So nearly 50 percent more losses in one year than were lost in three years combined.

What's surprising is that the layoffs didn't hit only newspapers. (1 in 5 local newspapers have closed down since 2004.)

There were big loses in big-name online sites including BuzzFeed, Vice Media, Verizon Media, Bustle, Quartz, and more. For Verizon's media units, Yahoo, AOL and Huffpost, there had been two sets of layoffs in 2019, resulting in the loss of 830 media jobs. (This does not include 10,400 losses-by-byouts in other Verizon jobs.)

Gannett, which merged with GateHouse Media in December to become the largest newspaper publisher by circulation, cut 400 jobs at its newspapers around the country, including US Today. Entrepreneur laid off four editorial staffer, restructuring on digital offerings. Jet, Ebony and New York Magazine announced lay offs, too. For us, a big sentimental loss was that of Mad magazine, which announced it would stop publishing new content, affecting 10 staffers and hundreds of freelancers.

The Washington Post eliminated its free commuter paper, the Express , after 16 years, because it found that the young readers it was aiming for no longer picked up a free -- that's right, free -- edition as they hopped on the Metro. That's because they accessed news on their phones (something that hadn't been around when the Express was launched). That's not the only free commuter newspaper to fold. Metro Boston, another free commuter paper, suddenly shut down this month after 19 years, after its sister publications, Metro New York and Metro Philadelphia, were sold. Metro Boston had a circulation of 300,000 in 2005 but fell to about 50,000 in 2019, the Boston Business Journal reported. 

Sports Illustrated, which was licensed to The Maven, cut "nearly 40 staffers...(with) plans to replace some full-time positions with contract" writers. And there are serious concerns about quality of the product because contract freelancrs are required to write many more articles for far less money -- especially upsetting because SI has long had the highest standards in sports journalism.

There were also broadcast losses at NBC, ESPN, NPR, CNN, Disney (as the result of its acquisition of 21st Century Fox movie studio).

The Youngtown Vindicator ceased publishing around its 150th anniversary, the Cleveland Plain Dealer laid off 12 additional newsroom employees along with as many as 30 production jobs. The St. Louis Post-Dispatch announced 23 jobs axed, Dallas Morning News eliminated about 20 newsroom jobs and the New Orleans Times-Picayune laid off all its staffers after being acquired by the Advocate, a competing newspaper.

The concern about the loss of local news media is that it has implications for the communities in whcih they operate. For example, local news media tend to be more trusted that national media. Local media help support local organizations in the community, helping to provide a sense of community. And they keep the community informed about issues affecting them.

U.S. news media used to be able to count on advertising and subscription revenue to fund operations but the shift to online or app has reduced both revenue streams, but especially advertising revenue. Unfortunately, with a few exceptions, there seems to be no sustainable business model that will help keep news outlets in business. We expect some uptick in revenue in battleground states, thanks to the presidential election but that won't last.

Which means: we expect more layoffs in 2020 and 2021. So we ask marketers to consider finding ways to support media.

Birnbach Communications Issues Top 3 Predictions for 2020

For the 18th year, here are our predictions for the upcoming year. 

As always, we will be rolling out other key trends over a series of blog posts but here are our top 3 predictions for 2020:

1.   Distrust of Big Tech and media fuels anxiety. In a divided America, where even advertising decisions can cause Twitterstorms, companies need to find ways to be credible as well as relevant. There’s no simple solution for Big Tech like Apple, Amazon and Google regarding safeguards on the data they collect on all of us — part of surveillance capitalism, in which data is collected, correlated with behavior and monetized —  or for social media because there’s no clear or consistent definition of what constitutes misinformation or how to limit it without infringing on protected free speech. There’s also no easy solution for the media, where even the “facts” may be disputed. Unfortunately, deepfakes (AI-generated fake videos and other images) will make it harder to know what’s real. This will fuel feelings of anxiety, anger, exhaustion, and isolation, regardless of political perspective. We expect many Americans will look for solutions and companies that provide joy, comfort, assurance and reliability to bolster their sense of well-being and connection.

2.  The loss of local news coverage will continue, and will erode trust. More than one in five local papers have closed since 2004, according to the UNC School of Journalism and Media, while others have become hollowed out through layoffs. This is a real problem since local news outlets are often part of the fabric that holds communities together. According to “Losing the News: The Decimation of Local Journalism,” by PEN America, “The connection between local journalists and their communities is essential… Seventy-six percent of Americans report trusting their local TV news, and 73 percent report trusting their local newspapers; by contrast, 55 percent of Americans trust national network news and 59 percent trust national newspapers.” For marketers, fewer journalists and outlets makes it harder to reach customers, partners, investors and employers with their messages.

3.  Streaming services will get a lot of media and consumer attention. HBO Max and NBC’s Peacock will battle for attention and subscribers with Netflix, Hulu, Apple+, Disney+, Amazon Prime, and other streaming services in the “streaming wars.” But it’s not a zero-sum game; there’s room for a range of services that have different strategies in their content libraries, pricing and offerings. We do expect a certain amount of churn/volatility as people subscribe to binge a particular show and drop it till the next season begins. The growing number of these ad-free streaming content services will make it harder for marketers to reach a mass audience.

As always, let us know if you agree or disagree with these. 

Does Google Interfere With Its Search Results? Check out this WSJ article

Google's search box has been designed to be minimalist but there's a lot going behind the scenes. The Wall St. Journal provided a compelling look at Google in an article entitled, "How Google Interferes with its Search Algorithms and Changes Your Results." 

It's worth checking out the article on your own but here are some interesting tidbits:

• There were about 3,200 algorithm changes in 2018 but just 500 in 2010.
• The auto-complete feature -- when you start typing a term, and Google offers predictive search terms -- is different depending on the browser you use: Google, Bing or DuckDuckGo. In some cases, the differences are minor but it suggests that user demographics are different, and Google anticipates that.
• The Journal says that Google "does blacklist to remove certain sites or prevent others from surfacing in certain types of results. These moves are separate from those that block sites as required by US or foreign laws...or to demote spam sites."
• "Google employees and executives, including co-founders Larry Page and Sergey Brin, have disagreed on how much to intervene on search results and to what extent. Employees can push for revisions in specific search results, including on topics such as vaccinations and autism." 

Search is complicated and can be controversial. This article is worth reading in full to better understand Google.