According to a new forecast by Fitch Ratings, a global credit rating agency, the worst of the advertising downturn has passed (though the risk of a double-dip recession remains present going into 2010) – but “some mediums will be left behind even in an ad recovery.”
Fitch writes in its 2010 Media Forecast that it expects "print mediums, namely newspapers, yellow pages and consumer magazines, to be down again off very easy comparable periods due to permanent shifts in advertiser sentiment and excess ad inventory that will plague the industry for years to come.” It predicts radio is likely to be flat to down slightly and outdoor advertising should begin a slow recovery later in the year. Broadcast TV is poised to participate in a potentially modest rebound.
The Fitch forecast also predicts that media companies with print products will erect and then dismantle online pay walls in 2010. Fitch writes, “With the exception of The Wall Street Journal, The New York Times, smaller local newspapers (that face less fierce cross-media competition) and business to business magazines." Fitch states that "most media companies have too many competitors in their content niche to compel users to pay. Free competitors are likely to capitalize on this de facto audience minimization strategy to gain share of viewers, and advertisers will be attracted to mediums and outlets that deliver scale. Any attempt to exact price increases on the remaining paying users is more likely to accelerate their departure toward free alternatives than to offset the ad dollars lost from the lower audience base. Parent companies will seek to halt the death spiral by re-opening most of their content broadly and dedicating efforts toward enhancing the user experience, content delivery/packaging and establishing partnerships with complementary content providers.”
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