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Online migration will help media face downturn, says report

Posted: 11/02/09 By: Laura Oliver

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Migration online by publishers and media organisations before the current economic downturn will help them respond more quickly to the crisis, a new report has suggested.

Companies that began restructuring before the downturn as part of their online efforts will be able to adapt quicker than in previous recessions, according to analysis from Ernst&Young.

Media organisations will also benefit from the lack of an ad boom, which preceded past recessions in 1999 and 2001, the 'media and entertainment by numbers' report, which, suggested.

"Advertisers will be quicker to increase adspend during the recovery this time around," the report stated.

"With advertising rates expected to fall throughout 2009, with the recovery, many advertisers will see some traditional platforms as good value for money."

However, structural problem within the advertising industry such as the migration online will be 'exacerbated by the cyclical challenges caused by the economic downturn,' the report said.

Consumer magazines and newspapers
Specialist consumer magazines and quality national newspapers, in particular, will outperform other media - with some titles able to offset declines in advertising and circulation by an increase in cover prices, the research suggested.

"Publishers targeting special interests both in print and on branded websites, with content that cannot be easily substituted by other sources, will be better placed to weather the downturn. Other more general segments such as men's lifestyle magazines and women's weeklies, as well as TV listings, will be less resilient," it said.

Magazines will fare better than newspapers, as they generate more of their ad revenues from online, while quality nationals will outperform 'populars', the report added.

B2B titles in particular will benefit from subscription-based models, but must maintain these revenues in 2009.

Titles focusing on retail, construction, finance and automotive will be most at risk, but the impact on B2B magazines is expected to be seen in the second half of 2009 into 2010.

In comparison, the report found that regional newspapers, commercial TV and radio will be most affected, because of their reliance on more traditional ad formats.

Online publishing
"[G]rowth in digital media will continue to outperform traditional media for years to come. With digital media also suffering from economic uncertainty, this might be a good moment to invest in an online business at an 'offline' price," the report suggested.

Online directories or listings businesses, such as Yell.com, should invest in more editorial content and feedback systems to meet consumers' needs, it added.

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