Local Media Decline

We talked this morning about the importance of advertising sales to pay the bills for any media company. Without advertising, few media companies could operate unless government funded or funded through receiver license fees. Even then, channel selection would be limited. Who wants to revert to a media system with only three or four government funded media channels?

This article, from Multichannel News, discusses the anticipated decline in local media advertising over the next few years. Local advertising will decline by about $11 BILLION by 2013. Worth thinking about is that advertising/marketing expenditures won't necessarily disappear--they may instead move to new media forms/formats. Click the link to read the full article:
http://www.multichannel.com/article/189663-Study_Local_Media_Declines_for_Next_Few_Years.php?nid=2381&source=title&rid=5248892

Study: Local Media Declines for Next Few Years

K.C. Neel -- Multichannel News, 3/9/2009 1:00:57 PM MT

The weak economic environment should curtail overall local advertising spending in coming years, according to the U.S. Local Media Annual Forecast (2008-2013) study by BIA Advisory Services and its Kelsey Group division.

Local ad revenue will decline from $155.3 billion in 2008 to $144.4 billion by 2013, according to the report, which represents a negative compounded annual growth rate. Of all the local ad revenue segments, only interactive is expected to grow over the next five-year period, Kelsey Group reported. All other local media will experience marginal to rapid declines in the next 18 to 36 months, BIA Advisory Services president and CEO Tom Buono said in a statement. A small number of traditional media will rebound with a revived economy beginning in 2011, though most traditional media will continue to decline, albeit at a slower pace.

"By the end of the forecast period, the overall size of the local advertising market will be considerably smaller than it was at the end of 2008," Buono said. "As the shift to online accelerates, and the demand for accountability metrics grows, there is an increased urgency for traditional media companies to develop and embrace new business models that incorporate digital strategies in order to drive business over the next decade."