Today’s Wall Street Journal has an interesting article by Julia Angwin, “Boston Globe Doesn’t Deliver For the Times.” It’s a cute title, but the content of the article may be a harbinger of what awaits traditional media: loss of revenue to Web-based media. The article notes that the Boston Globe will show its first loss in recent years, and much of the problem is attributed to advertising business fleeing to the Internet. Free Web classified ads, for example, cut into lucrative newspaper classifieds. Boston is believed to be on the leading edge of this shift due to its high level of broadband Internet connectivity: 76%, third highest in the nation after Honolulu and San Diego.
The Boston Globe has a website, of course, but the growth in ad revenues from that source haven’t nearly offset the decline in paper-based income. The article compares the 3 million unique visitors to the Globe site to the 31 million visitors to Yahoo News.
Perhaps its no coincidence that another story in today’s WSJ is titled, “NBC Universal to Slash Costs in News, Prime Time Programs.” The story, by Brooks Barnes, details cost-cutting steps forced by both viewers and advertisers flocking to new media. NBC Universal is still profitable, but a decline in earnings is projected for 2006 after five years of steady increases.
The long-expected shift from traditional media is clearly underway and the impact is being felt by both print publishers and broadcasters - it will be interesting to see how this develops. One outcome I see is a continuation of acquisition activity by old media firms who realize that their own new media offerings simply aren’t enough to replace the revenue they will lose in their print and broadcast businesses.
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I especially see the decline in Business & Franchise Opportunities in the classified section of the Sunday Globe. Today there were only 3 columns, less than I have ever seen. I’ve been watching this section for over 30 years.
Comment by Jim Coen 11.26.06 @ 9:57 pm