As we look toward the future, in almost every case new media’s operating revenues, when discounted for inflation, will never equal those that used to be generated by traditional media!
Vin Crosbie has been described as “The Practical Futurist” by Folio, the trade journal of the American Magazine Industry. The founder of Digital Deliverance LLC, and an adjunct professor at Syracuse University, he has over 31 years of media experience, 16 of which being in digital media.
Mr. Crosbie recently wrote a column for ClickZ in which he makes three new media predictions. These predictions are probably enough to scare the life out of most ad agency professionals and at very least will give them plenty to think about. Especially as they relate to the current ad agency business model and the revenue streams that support them. Here they are:
New media revenues won’t equal past traditional media revenues: In almost all cases (excluding certain exceptions like Google), when discounted for inflation, new media operating revenues will never equal those that used to be generated by traditional media. A significant issue as consumers switch media consumption from traditional to new media.
Why? – Firstly, the economics of new media are based on surplus whereas those of traditional media were based on scarcity. Second, the internet tends more often than not, to eliminate the middle man (agencies plus media buying and planning companies). Advertisers can now go direct. Add to that the huge increase in consumer generated content and you have a new media system that is far more efficient than the old.
Newspapers and magazines can’t keep up: Mr. Crosbie maintains that it is nearly too late for almost all daily newspapers and most news magazines. To survive, they should have made the necessary changes to their business models and infrastructures 5-10 years ago, in order to adapt to the new media. They did not because at that time the consumer’s hadn’t yet switched media consumption from print to online. They were profitable and such changes may not have paid out for 3-5 years or more.
US radio and TV will implode: The 80 year old affiliate structure of America’s radio and television industries is about to implode due to broadband new media. Why should a network continue to split commercial advertising time with local affiliates when it will be able to deliver programs directly to viewers’ TV sets? He predicts that there will be a bloodbath in the US television industry in the coming decade now that broadband is making the traditional model obsolete.
Sobering thoughts for an industry that was built upon media commissions earned through the role they played as intermediary. Sobering from a new media perspective too.