90,000 jobs and 142 papers lost in the US

142 papers came to an end in the United States this year reports Alan Mutter,three times the level of 2008.

However

the toll seemed smaller than some observers expected.
There are three reasons for that, the residual monopoly power of the industry, the magic of the bankruptcy system and the irrepressible optimism of publishers.

Little comfort though to the more than 90,000 people who lost their jobs in the various print publishing industries in the last 12 months.

Recession bites on media subscriptions

According to a poll conducted by YouGov for Callcredit Marketing Solutions there is evidence that people are cutting back on their media subscribtions as the recession bites.

The results of the poll showed that

1.24% of respondents were cutting back on subscriptions to newspapers and magazines this year.

2.18% are planning to cut back on pay-TV services provided by broadcasters such BSkyB and Virgin Media, with a further 18% saying they are thinking of cancelling their TV subscription altogether.

However for the older customer there was a percieved need to keep the subscriptions going

with 20% of respondents over the age of 65 saying that they thought newspaper and magazine subscriptions were a necessity. In addition 23% of this age group thought that pay-TV was essential.

Source Media Guardian

Advertising dives in America

A good post from Alan Mutter who reflects on the worst quarter for American newspapers in recorded history

Alan writes that

advertising sales fell by an unprecedented 28.3% in the first three months of 2009, plunging sales by more than $2.6 billion from the prior year.

adding that

print ad sales fell by a historic 29.7% to $5.9 billion in the first period of this year and that online sales fell a record 13.4% to $696.3 million.

The worst falls were in classifieds for employment real estate and cars which saw fall in excess of 40 per cent

Another bad start to the journalistic week.

comes with the news from DGMT which has announced first thing this morning that it expects to make 1,000 job cuts across its Northcliffe regional titles in the face of falling advertising revenues in the first quarter of this year.

In an update to the stock exchange,the company said that profits in the first half of its cuurent trading year were substantially lower than the previous year.

It still though expects to make a profit of around £187m after exceptional cost items.

The company said that advertising revenue at its regional titles was down around 37 per cent and at the Mail group by around 24 per cent.

The job cuts will reduce staffing levels by around 20 per cent.

Grade comes out fighting

It was interesting listening to a rather bullish Michael Grade being interviewed on the Today programme minutes after ITV announced a 41% drop in pre tax profits,cutbacks in programming budgets and savings which will include 600 jobs being lost.

It is difficult to pin much of the blame on Grade who has been in the job less than two years and inherited an organisation which for whatever reason had lagged behind its competitors in the changing broadcasting environment.

That Grade acknowledged that was good to see as was his determination to build up the corporation back to the brand it was when it enjoyed a near monopoly position in commercial broadcasting.

Those days will never return but nevertheless Grade still sees content and image as the way forward and I would applaud him for that.

It is unfortunate that his plans for the network have coincided with the drop in advertising revenues and as a consequence,costs have to be brought in line with revenues.

Green shoots from Ernst & Young for the media

Journalism.co.uk brought my attention to the latest business survey of the media.

This time it comes from Ernst and Young who conclude that

Migration online by publishers and media organisations before the current economic downturn will help them respond more quickly to the crisis,

However there are many structural changes that may have to happen

1.Cutting costs may not suffice-instead companies will need to rethink their undderlying business models

2.The profit forecasts from many media companies do not fully reflect the challenges ahead for them.

3.Unlike the previous downturns,this one doesn't follow an advertising boom.Thus when GDP starts to grow advertsing will recover a lot quicker.

BBC accused of being over pessimistic

Apparently according to the Eddie Mair over at the PM blog

An MP is criticising the BBC's coverage of the recession, accusing the corporation of "dramatising, accentuating and underlining" Britain's economic woes. The Liberal Democrats Treasury spokesman John Pugh has tabled a Commons motion, warning that the "confidence, jobs and livelihoods of real people" are affected by the way events are covered. He's calling for academic research into the reporting of the downturn, and its effect on what he calls "the fragile psychology of the City"."

How TV may benefit from recession

Interesting article in the Guardian this morning which reports that Deloittes say that the recession could be good news for the TV industry as more people will stay at home amd watch rather than go out and spend.

The report adds that viewing hours tend to increase in tough times as consumers stay at home and digital switchover, taking place region by region between now and 2012, could boost viewing even more.

You can read a synopsis of the report HERE and it says that

One of the boosts that television is likely to receive is in viewing hours, which tend to be counter-cyclical. Indeed, in the latter half of 2008, average viewing hours were already rising in some major markets as consumers increasingly entertained themselves at home21. Viewing hours may be boosted by digital switchover, one impact of which is to increase the number of channels available to consumers. Overall, in 2009, viewing is likely to rise by 30 minutes per week per viewer.

5 years for the industry to recover?

It has not been the best of weeks for the media in terms of job losses but James Robinson writing in this morningsObserver hold sout some hope for the Industry,although it is going to take some time to ride out the storm.

He quotes Paul Zwillenberg, a partner at management consultants OC&C.
who says

'The severity of a downturn is more exaggerated in the media sector and it is hit harder and faster than any other

and adds that in

the last recession, in the early 1990s, it took three years for media companies to return to pre-recession levels of profitability. But crucially, the industry was not facing the technological challenges presented by new competitors. This time, he says, it will take far longer to recover - up to five years

But those technological differences from last time will also work to the advantage of the industry.Crucially

the growth of online television could provide broadcasters with a financial lifeline, despite fierce competition from internet giants YouTube and MySpace.

and this aligned with big increases in broadband takeup and a report out this week which shows that we are actually watching more commercial Tv will provide

Broadcasters with the ability demonstrate that they can create platforms worth advertising on.

As with all recessions,sometimes the weakest will fall by the wayside but those strongest and willing to adapt will survive

Is the media talking us into recession?

Being old enough to remember the last recession in the early 1990's,the general feling then was that part of the problem was the media coverage which talkd the country into recession.

Downturns after all are mainly due to a lack of confidence and constant headlines about falling house prices,the end of good times,oil prices,and inflation can only help to sow the seeds of doubt in the consumers mind.

Over at the Sky news blog,coverage of the recession is defended.

We are trying to reflect the reality out there. If the economic news is bad, we can't pretend it is good.
And we would seem to be out of touch with you if we didn't highlight the problems you are facing.
As with the Northern Rock story, we haven't created the concern but we are reflecting it.

It's a good point and the media of course has a duty to report what is going on,but the problem is often the positio in the agenda.The Middle class papers of the Mail and the Express will often lead with the latest in the downward economic trends.

This morning the Express is leading with a story about possible fuel shortages,I wander whether this for example will mean queues at the pumps later today

Recession on the way.

The papers return to a subject that has not graced our front pages for some time this morning.Are we heading for a recession.

The Telegraph kicks off with an interview with Alistair Darling in which he

launches an attack on banks for lending too freely and allowing consumer debt to spiral to record levels.

And the paper adds

His remarks will be seen as a watershed, marking the end of the credit boom that has characterised most of Labour's decade in office.

Its leader saying

The country now has a consumer debt mountain of £1.3 trillion. As this newspaper has warned, with a global credit crunch making its malign presence felt, that leaves a lot of people extremely exposed, as money gets more expensive.

The Independent has FIRST THE CREDIT CRUNCH NOW THE SPENDING SQUEEZE on its front page with its leading article saying

Have we reached the moment when the contagion in the rarefied world of the credit markets finally begins to infect the real economy? This week two well-known fashion retailers, French Connection and Next, warned that trading conditions are likely to become a lot more difficult in the coming months. And yesterday, Home Retail Group, the owner of Homebase and Argos, sounded a similarly downbeat note. Expectations are being played down before the all-important Christmas selling season.

And the Mail headlines

'We can't control mortgage rates', Bank of England chief warns homeowners

Homeowners were warned to brace themselves for higher mortgage rates yesterday.
Bank of England governor Mervyn King said the cost of borrowing was likely to rise whatever the Bank did with official base rates.
It was effectively an admission that mortgage rates are out of the Bank's control as a result of the crisis in the world's financial markets.