Bad news always has been the stock in trade for the media, which attract viewers and readers from their reporting of calamities. But the bad economic news is striking uncomfortably close to home for the messengers.
Dow Jones & Co., parent of The Wall Street Journal, warned investors again Wednesday that a steep slide in advertising volume would result in far-lower-than-expected first-quarter earnings. The New York Times Co. issued a profit warning Monday, the same day that Knight Ridder Inc.’s San Jose Mercury News told its staff to prepare for job cuts. Another Knight Ridder paper, the Akron Beacon Journal, announced layoffs last month. Even Ad Week magazine, which chronicles developments in advertising, has announced job cuts.
The media upheavals pale in comparison to the number of heads being lopped off in the retail, manufacturing and technology sectors. But they do measure the severity of the slowdown on one of the most economically sensitive, if consistently profitable, businesses in the world, though one that faces a constant struggle to impress growth-hungry Wall Street.
“My sense is we haven’t bottomed out yet,” said economist Miles Groves of the Barry Group, a newspaper consultant. “When you look at the drop in consumer confidence and other factors, some of that is pretty frightening. … I’d like to say that January and February were the bottom, but I don’t know.”
Groves, like many of his peers, was more optimistic about the economy in December and has since revised his economic forecast downward. “If the economy does not recover quickly, we risk facing our own industry recession,” Groves said in his revised outlook.
Several newspapers–the Journal, The New York Times and the Los Angeles Times–have announced price increases, intended to help boost the revenue numbers but which typically cut into circulation.
Newspaper price hikes in the 1990s contributed to falling circulation, as did the industry’s deliberate circulation cuts in response to newsprint price hikes in the mid-’90s. But the risk for daily newspapers–most of which sell for 50 cents– in going to 60 cents or 75 cents is great, analysts say.
“There are a lot of good newspapers out there, but not all of them can carry a price increase,” Groves said.
Show me the ads: Broadcast television viewers in St. Louis were subjected to more political ads than any other city in the nation last year–34,889, according to a survey released this week by the Alliance for Better Campaigns, a Washington-based advocacy group. And viewers in the Kansas City TV market weren’t far behind, ranking fourth with 32,174.
The bombardment of TV viewers during political season has increased in intensity as presidential campaigns have turned their spending away from network ad buys to local buys. That’s why viewers in so-called swing states–Michigan, Pennsylvania, Florida, Missouri–saw much more of George Bush, Al Gore and other candidates than they may well have liked.
The endurance record may go to overexposed Michigan TV watchers in the markets of Detroit, Grand Rapids/Kalamazoo and Flint/Saginaw/Bay City. They ranked second, sixth and eighth, respectively, after having survived a combined 85,640 political ads.
Harry Potter’s coattails: Rave all you want about the positive impact of the Harry Potter series and how it has encouraged kids to read, but all the hoopla has not had a measurable impact on book sales overall. U.S. readers bought 1.6 billion books last year, about the same as the year before, according to Ipsos-NPD, a research firm.
Harry Potter book sales doubled last year, but most of those books were bought for readers over 14 years old; in 1999, it was the younger-than-14 crowd who flocked to and bought the Potter books. There was no apparent spillover effect of the Potter books on the sale of children’s books last year, which were down 4 percent from the 1999 level.