Just read this about Australian TV and newspapers in the New Zealand Herald On Sunday…
“This week the Seven Network confirmed it had cut the value of its 47 per cent holding in the Seven Media Group from A$793.9 million to zero, following Packer’s similar valuation of PBL Media when he dumped his residual holding of his family’s former Nine Network flagship.
The Ten network is also struggling, and on Thursday Fairfax halted trading in its shares as it considered raising funds following the announcement of an A$365.2 million net loss for the final six months of 2008.” (Greg Ansley)
… the article was supposed to be about James Packer fretting over losing 3 billion bucks but seriously, he got out while the gettin’ was good.
More on Fairfax woes here.
ADDED: Thanks to Gary Hayes for pointing out the New York Times article:
Financially, the networks are on shaky ground, partly because they rely almost solely on advertising. CBS reported that for the fourth quarter of last year, as the recession deepened, operating income in its television segment declined 40 percent, even though it was by far the most-watched network. In the second week of February, CBS had 12 of the top 20 shows, according to Nielsen Media Research.
News Corporation, which owns Fox, reported operating income of $18 million in broadcast television, compared with $245 million a year ago. And Disney’s broadcasting business had a 60 percent drop in operating income.
For years the major networks raised their ad rates, despite the shrinking audience, because they still offered advertisers a larger audience than anyone else.
“More dollars are chasing fewer eyeballs,” said Gary Carr, director of broadcast services at TargetCast tcm, a media and marketing company.
Lately, the recession has forced down the cost of prime-time commercials on network television, TargetCast said. In the fourth quarter, the average cost for a 30-second prime-time spot declined 15 percent, to about $122,000, the company said.
Not that NYTimes can point the finger at reduced operating incomes:
Virtually all the predictions about the death of old media have assumed a comfortingly long time frame for the end of print—the moment when, amid a panoply of flashing lights, press conferences, and elegiac reminiscences, the newspaper presses stop rolling and news goes entirely digital. Most of these scenarios assume a gradual crossing-over, almost like the migration of dunes, as behaviors change, paradigms shift, and the digital future heaves fully into view. The thinking goes that the existing brands—The New York Times, The Washington Post, The Wall Street Journal—will be the ones making that transition, challenged but still dominant as sources of original reporting.
But what if the old media dies much more quickly? What if a hurricane comes along and obliterates the dunes entirely? Specifically, what if The New York Times goes out of business—like, this May?
It’s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.
Not that The Atlantic can point fingers… never mind, you get the picture. Traditional media documenting the demise of traditional media.