Linking Local - The wikiDOMO Blog

Does a Horse and Buggy Work? That's The Question!

Chris Brogan posed the question “When Will the Volume Game Turn Down?” with his post and Sean Bohan followed-up with his post “It’s there because it works…”.

We're all having these conversations about traditional media working or not working and if the media companies will survive or not. I wonder if the farriers and coachbuilders of the 19th century had these same conversations about their industries?  If so, the questions might have been; does the horse and buggy still work? Will farriers survive? After all, that was a huge industry back them, every one-horse town had a farrier or a blacksmith.  Some of them must have used the argument that they had worked for hundreds of years and that in some instance only the horse works best.

Based on the numbers TV, Radio and Newspaper industries are certainly struggling, in part, because they are no longer as efficient.  Does mass media work?  To some degree it still does, but it won’t much longer.  The more digital we become, the more efficient it will be to reach us through digital media.

The digital medium will do to mass media exactly what cars did to the horse and buggy.  And yes, people still ride horses and we see the queen in her carriage every so often, but I wouldn’t call it mass transportation.

TV, Radio and Newspaper Revenues are Down, Down, Down

Television revenues a cliff-hanger

In both an Olympic and presidential election year, U.S. television revenues are still projected to drop 7% according to BIA Advisory Services.  This represents a loss of over $3 billion. Subtract the $1 billion that NBC generated with the Olympics and the more than $2 billion spent by the political parties on TV and it all adds up to a $6 billion (-14%) shortfall when compared to 2007 revenues. 2009 looks to be even worse – cliff-hanger indeed.

Radio revenues continue to skid

U.S. radio revenues have just experienced the largest year over year drop in one month. The Radio Advertising Bureau just released the November numbers and they’re down-right scary. A 22% drop in national and local ad revenues. When you look at November over two years (2008 vs. 2006), it’s a 29% drop. Radio has not had a year over year revenue increase since April 2007, and that was only 1%.

Newspapers not delivering

According to the NAA, U.S. newspapers lost $15 billion, in the first three quarters of 2008, compared to 2007. In the third quarter, they dropped over 19%. Classifieds continue to be the hardest hit with a nearly 31% drop. The category has been hit hard for years. In 2000 Classifieds accounted for over $5 billion in revenues, this year it will barely crack $2 billion.

It’s not just the economy stupid.

Mass media advertising is heading for a world of hurt. 

What will happen to the advertising industry? I have a few thoughts, but they will make for future posts. 

As I have written before, the newspaper industry is dead. If you didn’t think so then, how do you feel about it now that the second largest newspaper company, Tribune Company, has filed for chapter 11? Add to that the fact that the New York Times (the nation’s largest metro newspaper) has been forced to put its office tower up as collateral for a $225 million loan and we have the beginning of the end.

There is no doubt that 2009 will bring a lot of change to the advertising landscape.  

We live in interesting times…