no, he can't read... 8^)
Posted on 12/07/2008 2:59:23 PM PST by abb
Call it the big shrink.
Citing the effects of a recession that's prompting marketers to trim budgets and the number of media outlets they work with, media companies are shedding jobs at a furious rate. But the deep cuts they're making are as much about these conglomerates shedding their old media models as they are about the economy.
Viacom and NBC Universal swung the ax last week, eliminating 850 and 500 jobs, or 7% and 3% of their work forces, respectively. Add that to 600 job cuts at Time Inc., 1,500 at Yahoo, 1,800 at Gannett, hundreds at CBS's radio and local TV divisions, and incremental cuts just about everywhere else, and big media is getting a whole lot smaller.
How small? The media industries have shed more than 30,000 jobs in 2008, according to an Ad Age analysis of Department of Labor employment statistics and news reports. That's about 3.5% of the total media work force of 858,000. Since the bubble-inflated high-water mark in 2000, media has lost more than 200,000 jobs.
The latest round of restructuring is driven by two concurrent forces: On the one hand, there's a crippling recession that is crushing marketing budgets; on the other hand, there is the ongoing effect of the fragmentation of audiences.
Already thin payrolls The bloodletting last week came at two of the leaner media conglomerates: Viacom had about 13,100 full- and part-time employees before the cuts, and NBC Universal had 15,000. That's compared with much larger head counts at two companies that have not announced layoffs: Walt Disney Co., which has 150,000 employees, and News Corp., with 64,000.
CBS, which has been reducing its head count throughout the year, had nearly 24,000 employees at the beginning of 2008. Time Warner had 86,400 employees before the cuts at Time Inc.
When he announced his intention to cut $500 million from its 2009 budget in October, NBC Universal CEO Jeff Zucker told staff in a memo: "We have no choice but to respond quickly to the external economic forces that are affecting the entire world economy."
But privately, some executives explained, the recession is giving big media cover to undertake Detroit-like restructuring as the business struggles to shed the remaining vestiges of broadcast-level staffing in favor of a lower-cost model.
"In this wave of media layoffs, management teams are placing the blame on the shoulders of the American recession without acknowledging that even in a strong economy, you would still have major challenges as they shift from old media to new media," said Barclays Capital media analyst Anthony Di Clemente.
Drop in spending That's not to say the media industry isn't facing a significant drop in marketing spending. WPP's media-buying unit Group M is predicting a 3.9% fall in U.S. ad spending in 2009, according to estimates to be released this week. That's after no ad spending growth from 2007 to 2008.
Fitch Ratings is predicting the weakest year for advertising since 2001. BMO Capital Markets is predicting a 2% drop in U.S. advertising in 2009 but a deeper 5.4% slide in spending on measured media, with radio down 7.6%, broadcast TV down 8.7%, newspapers down 12.1% and magazines down 8.2%.
What's unknown is whether media's losses are permanent and whether the companies will simply emerge as smaller businesses once the dark economic clouds dissipate. "It's very possible that after the cyclical decline we are going to experience that we will come back. The question is: Do we come back at the level of 2007 or 2008?" said Alan Gould, analyst at Natixis Bleichroeder.
Of all big media, he said, he believes Disney has the best chance to rebound, given that only 20% of its revenue comes from advertising.
One media sector that looks destined for permanent shrinkage is newspaper and magazine publishing. Time Inc.'s current round of layoffs was sparked by the recession, for example, but the downsizing has been under way for years. Chairman-CEO Ann Moore has laid off employees in waves since December 2005, trying to streamline an operation that overstaffed in boom times. Those magazine jobs aren't coming back.
Permanent changes Rodale, the publisher of magazines including Men's Health and Runner's World, chopped its staff 10% when it cut 111 jobs last month. Under pressure from the recession, it figured out it could outsource back-office areas such as IT and operations. Rodale is not going to bring those jobs back.
On Dec. 5, Newsday told its employees it would cut another 100 jobs, or 5% of its work force.
The good news for media companies is that consumers are spending more time in front of screens than ever before. Household TV viewing reached 142 hours a month in 2008, five hours more than last year, according to Nielsen.
"Collectively, media will continue to be strong," said Group M Chief Investment Officer Rino Scanzoni. "We are looking at a generation of people that have grown up with multiple media that are now becoming major consumers. Viewing has increased; it's just fragmented over more pieces. It's about weaving those pieces together to accomplish your advertising objectives."
~ ~ ~ Contributing: Andrew Hampp, Nat Ives
Too bad you can’t buy a conservative paper, giving them support and getting a product that’s helpful to you.
That doesn't mean ad spending isn't down.
no, he can't read... 8^)
I’d certainly love to be able to buy a conservative paper. In fact I mourn the death of print journalism more than most. My great grandfather started the first newspaper in the Dakotas and I have a degree in journalism.
I miss the smell of newsprint and rattling the paper to turn the pages while I have my morning coffee. Sunday morning hasn’t been the same for many years.
The election is over why does the Obamedia need to keep the campaigners on?
Pray for W and Our Troops
AMEN!
A friend, who is a good historian, told me yesterday:
What the MSM and in particuliar the fishwraps and local tv stations are doing with their people, reminded him of Hitler sacrificing his Army, Air Force, Navy and innocent Germans to keep his vile group in power when they should have surrendered after DDay.
Couldn’t have happened to a more vile den of thieves.
Circulation is dropping a lot. Lots of small conservative papers have been hit very hard as Americans look for for bite-sized news nuggets rather than anything in-depth, which is where print shines over TV and Online. Many of the larger, liberal rags have survived thus far on inertia, but are now using this as an opportunity to trim and go more into digital media and move more of their jobs overseas.
I guess everyone’s pretty happy...there’s no need to pay a fat American to attend a public meeting and report when you can hire someone overseas. The more we can sink American newspapers, the more of this efficiency we can get for all Americans!
As editor of a newspaper (not that you could tell from my posts!), and founder and editor of a second one, I empathize. I wish America were not becoming illiterate, and I wish conservatives would start conservative newspapers rather than just conceding and cheering the destruction of the medium. But I think people, especially anti-newspaper conservatives, realize that America is sinking. They know that newspapers and in-depth reporting are of the past, and won't invest in something that is doomed to failure.
Of course, conservatism relies upon in-depth analysis, long-term thought, and complex issues, so it's a big blow to the right more than to the left. As the decline of newspapers is cheered, it's a blow against conservatism.
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