Mass extinction

Coming soon to some media near you.

More or less 65 million years ago, a piece of space rock about five miles across smashed into the earth and changed everything. The impact – and the dust cloud that enveloped the entire planet and cut off most sunlight for years afterward – killed off the dinosaurs that pretty much ruled the world back then and ended the Cretaceous era. When the dust settled, the Tertiary era began and little vole-like mammals began evolving into beings that would eventually become target audiences, marketers, advertising folk and web gurus.

Well, the asteroids are flying again. This time in the form of an economic meltdown that comes on the heels of some significant changes in the media world. And, once again, some species are going to bite the dust.

Welcome to the media meltdown. The buzz is all about the financial services, automotive and retail industries, but this recession is an equal opportunity disaster. A lot of media are feeling real pain as the shrinking economy intensifies some preexisting conditions and creates a whole batch of brand-new challenges, too.

Just like the plants and animals of the Cretaceous-Tertiary interface, not all media are going to come out on the other side. So which ones are most likely to go extinct this time? Here are some likely candidates:

Yellow Pages. Last week the BrainPosse principals were in an edit suite in a dead zone where Wi-Fi doesn't penetrate. We needed to contact someone we don't have on speed dial and couldn't use Google to get the number. We found a phone book off in a corner of the room and looked up the number. Then we realized that it was the first time either one of used the Yellow Pages in more than a year. We're not atypical in our migration to other listing sources. Source, actually: Google.

The Wall Street Journal put it succinctly in a recent headline: "Extinction Threatens Yellow-Pages Publishers."

Like newspapers, Yellow Pages have been ravaged by online alternatives. But unlike newspapers, Yellow Pages publishers have not been able to establish effective internet presences of their own.

The Yellow Pages publishers' web problems are exacerbated by the fact that most of them only sell web listings in conjunction with ads in their printed directories. That short-sighted insistence on selling online listings only to businesses unsophisticated enough to buy overpriced and underperforming print directory ads will drive small businesses to Google and Yahoo. Those businesses won't be making a round trip.

As the small businesses who historically have been the main source of Yellow Pages revenues desert or abandon expensive printed directory advertising in these difficult economic times, they can no longer be included in the directory publishers' web products. When they turn to geotargeted search on the mainstream search engines, they'll discover quantifiable effectiveness the traditional directories – either the printed or the publishers' online versions – simply can't match. Once they see the results geotargeted search generates, they're unlikely to succumb to the Yellow Pages salesperson ever again. Some signs:

  • Borrell Associates projects a 39% decline in print directory revenues in the next four years.
  • Investors have already written off the directory publishers. According to The Wall Street Journal, the stock prices of R.H. Donnelley and Idearc, the two biggest, are down 99% in the past year. Look for that last 1% to disappear soon.

Newspaper. It's not surprising that The Christian Science Monitor has suspended its daily printed product. With a circulation in the middle five figures and coast-to-coast distribution, it's amazing that the paper lasted as long as it did in its ink-on-paper form. The Monitor was supporting a respectable national news organization with fewer readers than The Anchorage Daily News, The Shreveport Times, the Cedar Rapids Gazette or The Tucson Daily Star.

Although the conversion to digital makes sense, this prestigious national paper's conversion to a daily online product with a weekly print edition was a harbinger that sent chills through the entire newspaper industry.

Through the first half of 2008, daily newspapers continued to make bad news:
Circulation was down 4.7% from the year before.

  • Ad revenues were even worse. They dropped 13.76% – a $3 billion decline.
  • In a May, 2008 Nielsen study, only 11.3% of respondents named newspaper as their primary source of news.

Over a year ago, our article, Newspapers: Going Under/Going Strong (link), examined newspapers' decline and options for stemming – or even reversing – the slide. It's now too late. We believe most local dailies have passed the point of no return. Except for national publications like The New York Times, The Wall Street Journal and USA Today, local weeklies, a few trophy dailies kept alive to stroke the egos of billionaire publishers/patrons and one or two still-viable local dailies (we're rooting for Little Rock's Arkansas Democrat-Gazette), printed newspapers have a finite future.

The death spiral is already underway. Some readers deserted printed newspapers for online news. More important, young readers never adopted the newspaper habit. So circulation fell. Advertisers cut back on newspaper spending because of the circulation drop. The decline in advertising revenues forced newspapers to cut costs, including news coverage. The reduction in breadth, depth and quality in news coverage caused more readers to abandon newspapers. And so another twist in the spiral began.

Unlike Yellow Pages, most newspapers have established strong online presences. The catch is that the revenue generated by a newspaper website visitor is between 0.5% and 1.1% of the revenue generated by an ink-on-paper reader. The presence newspapers have gained online is based on the news coverage supported by their print editions. When the print editions go away, so will the content that sustains the online versions. And when the content goes away, so will the last vestiges of newspapers, their websites.

Magazine. Magazines won't all become extinct.