Running an old media company isn’t much fun right now
The outlook for most of the media is as bleak as the August weather.
Everywhere you look this week profits seem to be tumbling as cost cuts and job losses accelerate.
Johnston Press chief executive Tim Bowdler could see little cause for hope for 18 months at the very least as he unveiled an advertising fall of 9.5 per cent for the first half.
But how much of the decline in regional classified advertising is structural rather than cyclical?
Independent News and Media reported a 35.6 per cent decline in first half profits combined with a promise to “streamline” working practices in both printing and editorial.
INM’s first half will enable 25-per cent shareholder Denis O’Brien to make even more mischief in the months ahead, with some suggesting he may even try to launch a bid.
In Australia Fairfax Media, the country’s second largest newspaper group, announced the loss of 550 jobs – around 5 per cent of the total.
Do you think a pattern is starting to emerge here?
Then to add to the gathering gloom media buying agency Carat revealed it has trimmed its growth forecasts for global advertising this year from 6 per cent to 4.9 per cent because of slowdowns in the UK, Spain and the US.
Tough Comparisons
It makes sense. We’ve just had Euro 2008 and the Olympics, so comparisons will be tough.
At least Carat parent group Aegis provided a small chink of light yesterday with a 15.4 per cent rise in underlying profits – suggesting that there may be more money to be made in planning, researching and buying media schedules than owning the media vehicles themselves.
RTL, Europe’s biggest commercial broadcaster, combined a 2.5 per cent drop in profits with the admission that the company which owns FIVE could not forecast beyond September in most countries.
And then there is ITV. You would expect ITV to be involved in such a litany.
Alas media buying agencies are now suggesting that after a dreadful September ITV1 is likely to have a torrid October, facing a second consecutive month of double-digit advertising decline.
The problems of ITV were comprehensively addressed at the Edinburgh Television Festival in a session called: “How To Save ITV.”
Naturally ITV managing director Rupert Howell claimed ITV didn’t need saving because it had a plan and was saved already but other panellists were not so sure, and argued that free-to-air television was a mature, if not actually declining business.
The only hope for ITV was to be taken into private ownership. The company might also consider a transformational deal such as taking over Virgin Media.
After such a week of gloom a happy bedtime story is an absolute necessity.
Luckily one was provided by Penguin. The publisher has linked up with match.com, the online dating service to help lovelorn book lovers to get it together.