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Why the media meltdown

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An economic understanding of what has happened to the media over the past 15 years for an understanding of what's next.

An economic understanding of what has happened to the media over the past 15 years for an understanding of what's next.

Published in: News & Politics, Business

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  • 1. Bob Rosenbaum! Media Management/2012! Why it happened  What it means And what’s next©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 2. Marshall  McLuhan   1911-­‐1980  /  Philosopher  &  CommunicaDons  Theorist  •  Understanding  the  Media;  1964   –  The  medium  is  the  message   –  Explains  why  stories  are  different  on  air,  in  print  and  online   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 3. Marshall  McLuhan   1911-­‐1980  /  Philosopher  &  CommunicaDons  Theorist  •  Understanding  the  Media;  1964   –  The  medium  is  the  message   –  Explains  why  stories  are  different  on  air,  in  print  and   online   –  Hot  v.  Cool  media   •  Hot:  demands  acDve  parDcipaDon   –  Newspapers,  magazines   •  Cool:  Allows  passive  parDcipaDon   –  TV,  radio   •  Explains  why  meltdown  has  affected  print  differently  than   broadcast   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 4. McLuhan’s  Tetrad  Examines impact of new technologyon society by asking:• What does the medium enhance?• What does the medium make obsolete?• What does the medium retrieve that had been obsolesced earlier?• What does the medium flip into when pushed to extremes? ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 5. DOCUMENTING  THE  MELTDOWN  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 6. Newspaper  meltdown   U.S.  newspaper  revenue  (millions)  $60,000    $50,000    $40,000     Online  $30,000     Classified  $20,000     Print   Total  $10,000     $0     Source:  Newspaper  AssociaDon  of  America   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 7. Newspaper  meltdown   U.S.  newspaper  revenue  (millions)   Source:  Newspaper  AssociaDon  of  America  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 8. Magazine  meltdown   Average  adverDsing  pages/magazine  1200  1000   2004   2005   800   2006   2007   600   2008   2009   400   2010   200   2011   0   Source:  Publishers  InformaDon  Bureau   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 9. Magazine  meltdown   Average  adverDsing  pages/magazine  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 10. B2B  meltdown   2009  Trade  Media  Revenue   15   10   5   0   -­‐5   Revenue  (billions)   -­‐10   %  change   -­‐15   -­‐20   -­‐25   -­‐30   Source:  Publishers  InformaDon  Bureau  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 11. WHY  IT  HAPPENED  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 12. Internet  =  DisrupDon   Key  events  in  prelude  to  the  meltdown  •  1989:  America  Online  founded  •  1993:  Excite  becomes  first  “modern”  search   engine  •  1995:  eBay  founded  (as  AucDonWeb)  •  1996:  Craig’s  List  goes  online  •  1999:  ‘Blog’  is  coined  •  2000:  Google  launches  AdWords   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 13. AOL:  So  What?  •  Was  it  the  first  online  news  source?  •  Sped  up  news  cycle  •  Allowed  tracking  of  reader  interest  •  Ushered  in  era  of  user-­‐driven  content   Nutshell:  Readers  want  it  faster  and   customized   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 14. Excite:  So  What?  •  Defined  how  the  Internet  would  be  used   –  Search  =  Research   –  Search  =  ExploraDon   –  Search  =  DisintermediaDon     –  Search  =  Immediacy   –  Search  =  Portability   Nutshell:  Users  declare  independence  from   tradiDonal  informaDon  filters   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 15. Excite:  So  What?  •  Old  media  consumpDon  is  reacDve        whereas  •  Online  media  consumpDon  is  proacDve  •  Internet  becomes  “honest”  medium  since   storytelling   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 16. eBay/Craig’s  List:  So  What?  •  Did  to  the  “marketplace”  funcDon  of  media   what  search  engines  did  to  the  “informaDon”   funcDon   –  Shortened  vending  cycle   –  Reduced  cost   –  Removed  geographic  limitaDons   –  Increased  personalizaDon   Nutshell:  Buyers  and  sellers  alike  share  the  largest   marketplace  ever  assembled   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 17. Blogs:  So  What?  •  Everybody  is  a  news  outlet  •  Barrier  to  entry  is  the  lowest  it’s  ever  been  •  Variety  of  offerings  is  the  widest  it’s  ever  been  •  New  corporate  media  emerge   –  Huffpost,  Daily  Beast,  Slate  Nutshell:  Media  must  struggle  harder  than  ever   to  maintain/engage  audience   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 18. AdWords:  So  What?  •  Allows  adverDsers  to  pay  for  higher  search   engine  exposure  •  MarkeDng  becomes  directly  measurable  •  Reduces  cost  of  markeDng   –  Metric  changes  from  CPI  to  CPC  •  Arrives  during  a  recession  Nutshell:  Instant  examinaDon  of  tradiDonal   adverDsing   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 19. McLuhan’s  Tetrad  Revisited  Examines impact of new technologyon society by asking:• What does the medium enhance?• What does the medium make obsolete?• What does the medium retrieve that had been obsolesced earlier?• What does the medium flip into when pushed to extremes? ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 20. McLuhan’s  Tetrad  Revisited  How Internet media technologies haveimpacted society:•  Enhance: Speed, proactivity, customizability, freedom• Obsolete: Daily news cycle, browsing, print advertising, printed marketplaces• Retrieve: Participation• What does the medium flip into when pushed to extremes? _________ ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 21. McLuhan’s  Tetrad  Revisited  How Internet media technologies haveimpacted society:•  What does the medium flip intowhen pushed to extremes?Facebook and other social media:Logical conclusion of media that isfast, user driven (proactivity andcustomizability) and allowsunprecedented participation andfreedom ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 22. RevoluDon  in  markeDng  MarkeDng  before  the  Internet:  •  We  talk/you  listen!  MarkeDng  with  the  Internet:  •  Can  we  get  permission  to  engage  you?   –  E-­‐mail  lists   –  Blogs   –  Social  media   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 23. RevoluDon  in  markeDng  If  we  can  find  you…  And  get  permission  to  engage  you  …  Then  why  do  we  need  the  media  at  all?   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 24. RevoluDon  in  markeDng  If  we  can  find  you…  And  get  permission  to  engage  you  …  Then  why  do  we  need  the  media  at  all?  •  The  marketer  now  aggregates  its  own  audience   and  produces  its  own  content  with  parDcipaDon   from  the  outside;  the  marketer  IS  a  publisher   –  Permission  markeDng   –  Custom  publishing   –  Content  markeDng   –  Social  media  markeDng   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 25. RevoluDon  in  markeDng   Screenshot  of  Lay’s  Facebook  page,  8/26,  2012  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 26. Internet  2.0  =  DisrupDon  2.0  •  2003:  LinkedIn  founded  /  profitable  in  2006  •  2004:  Facebook  launched  •  2006:  Twiner  launched  •  2009:  Quora  launched   –  2012:  Quora  declared  a  mortal  threat  to  Wikipedia   in  San  Francisco  Chronicle   The  marketer  as  publisher  fully  realized   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 27. THE  IMPACT  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 28. Decline  of  journalism  •  U.S.  newspapers  reduce  investment  in   journalism  by  $1.6  billion/year  (Rick  Edmonds,   Poynter  InsDtute)   Newspaper  newsroom  employment   2007   2008   2009   2010   2011   50,000   40,000   30,000   20,000   Source: Poynter, ASNE, Newspaperlayoffs.com ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 29. Media  shakeout  Newspaper  closures  2007-­‐2010   Source: http://newspaperlayoffs.com/maps/closed/ ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 30. New  business  models  •  TradiDonal  media  –  moneDzed  audience   –  Generate  content   –  Amass  an  audience   –  Lease  access  to  the  audience  •  New  models  –  moneDzed  content   –  Generate  content   –  Sell  content   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 31. Examples  of  new  business  models  •  Digital-­‐only  startups   –  Rupert  Murdoch  “ The  Daily”   –  Fear.less  •  Group  sourcing   –  Wikileaks   –  Nowpublic.com  •  Hyperlocal  publishing   –  JournaDc   –  Heights  Observer   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 32. New  business  models  •  Content  aggregaDon   –  Associated  Content  •  Audience  management   –  Press+  media  paywall  •  Content  outsourcing   –  MedCity  News   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 33. WHAT’S  NEXT  ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 34. What’s  next  •  DisrupDon  as  a  way  of  life  •  Print  survives,  along  with  everything  else   (TV  didn’t  kill  radio,  cable  didn’t  kill  TV)   –  Fewer  print  publicaDons  per  category  •  Consolidators  absorb  innovators  •  Digital  reading  devices  become  ubiquitous  •  InformaDon  providers  will  adopt  pracDces  that   make  these  devices  preferable   ©2012  Bob  Rosenbaum                  www.themarke6arm.com  
  • 35. THE  MEDIUM  IS  [STILL]  THE  MESSAGE  • There  just  happen  to  be  more  media  than  ever  before.    • No  media  ever  go  away  completely   • “Obsolete”  media  just  adapt  and  develop   their  own  niche  markets  ©2012  Bob  Rosenbaum                  www.themarke6arm.com