"Extinction Threatens Yellow Pages Publishers," screamed a Wall Street Journal article on November 17 (http://online.wsj.com/article/SB122688313315132107.html ). "The economic downturn is sending the already ailing industry into a tailspin," wrote reporter Emily Steel. Extinction is a powerful word and one rarely – if ever – heard in media circles. The gospel of media has always been that no new medium has ever replaced an existing one. Radio adapted to the introduction of television just as print adapted to the development of radio. Broadcast networks adjusted when cable came along. The Internet, media traditionalists have continued to assert, might cause upheaval and change for established media, but it certainly could not result in the extinction of those media.
But Yellow Pages will dip in 2009 below their 1998 revenues of $12.1 billion. Myers Report (www.myersreport.com) projects Yellow Pages advertising will decline 12 percent in 2009 and 6 to 10 percent in 2010, following a four percent dip in 2008. (Myers will issue its adjusted 2009 advertising investment forecast next week.) While Yellow Pages continues to be a multi-billion dollar business – far from extinction – the industry's economic growth prospects are non-existent.
All print media are struggling with the same reality. While some magazine publishers are moving quickly to identify and invest in alternative revenue models (http://www.jackmyers.com/commentary/jackmyers-think-tank/29600204.html ), the magazine industry for the most part remains dangerously dependent on traditional print advertising revenues that are eroding at a rate even more dramatic than Yellow Pages' ad revenues. And newspaper ad revenues in some markets are all but disappearing as the auto, real estate, retail, entertainment and other core categories stagger toward a depression-like economic reality.
Consumer magazine ad revenues will decline 12 to 15 percent in 2008 and even more in 2009. Projections on when the industry is likely to see an actual increase in ad revenues can only be based on wishful thinking. As much evidence as exists about the value of magazine advertising and the engagement of magazine readers with advertising messages – and there is substantial evidence that magazines outperform almost all other media on several engagement measures -- the realities are that print-based media are on the decline.
Newspapers, which do not reap the benefits of high engagement scores (except among Hispanic and African-American readers), are at an even greater disadvantage. In 2001, according to Myers Report, newspaper advertising revenues were $49.2 billion. In 2010, they are projected to be only $28.5 billion, a 42% decline. Consumer magazines are projected to decline in ad revenues from more than $14 billion in 2005 to $10.3 billion in 2010.
Magazine publishers with strong print brands can offset some of these losses by leveraging their brands beyond the print page. But the economic reality is that digital, mobile and other "new" media options simply do not have the short or long term revenue growth potential that traditional media companies require to replace the looming declines.
There are solutions, but cost-cutting measures are only a band-aid on a deepening wound. Being the harbinger of negative economic realities is not a pleasant role and I wish I could be more positive. But publishers need to be far more aggressive in confronting the truth of their situation. There will, of course, be magazines that survive and do quite well in a depressed economic environment and some will successfully sustain their business with their traditional business models.
But for the print media industry as a whole, there is a pressing need to adjust to a new reality. There are solutions. There are opportunities. But if management fails to quickly and dramatically heed the clear warning signs of both economic and systemic, secular dangers to their core business, the reality of extinction will face them sooner than they imagine.
Jack Myers consults with media companies, agencies and marketers on the development and implementation of new revenue models. He can be contacted at (212) 875-8002 and firstname.lastname@example.org.