The End of the Middlemen (i.e., Newspapers and TV Networks)

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Disintermediation. There’s a term you probably haven’t heard much since the ’90s. But the idea of eliminating the middleman is alive and well in the media industry, circa 2008, even if we don’t talk about it in exactly those terms these days.

While traditional journalism debates — and mostly bemoans — the merits of “citizen journalism,” the companies that employ traditional journalists are evaporating right before our eyes.

We’ve documented many times here the loss in circulation and advertising revenue that is undermining newspapers, and increasingly, magazines as well. We’ve also noted the decline of the old television networks; and although we’ve not delved into commercial radio much, you can toss that sector on the junk heap of history as well.

Analyst and blogger Alan Mutter, who calls himself a Newsosaur, calculates that 11 publicly traded newspaper companies have lost approximately $50 billion in market value over the past three and a half years, or more than half of their cumulative market capitalization since the end of 2004.

As the newspaper companies are being removed from the supply chain for news and information, so are the old-line TV networks. Although the median age of the U.S. population as a whole has remained steady the past few years, the median age of ABC viewers has gone from 44 to 48 in the past four years; NBC’s has gone from 46 to 49; and CBS, which already had the oldest crowd, has seen its median viewer age from 52 to 53.

Fox has not fared any better (35 to 42).

It’s not that people are not watching TV and other video programming, but they’re increasingly doing it on cellphones and other mobile units like BlackBerries, iPhones, etc.). Over 150 million such units will be sold in 2009. Thanks to TiVo and similar technologies, consumers no longer need remain captive to the networks and their advertisers.

Disintermediation. It’s time to bring back the term.

Tags: Network, Fox, TVs, Tv & Home Theater, Personal Technology, Home Entertainment, David Weir

In addition to serving as a BNET Media analyst/blogger, David Weir is a veteran journalist and the author of several books. Weir is a co-founder and vice-president of the Center for Investigative Reporting, as well as an editorial board member of The Nation.

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1

DonaldWD

07/02/08 | Report as spam

Aging audiences = declinging revenues

It seems that traditional media and the advertising community had better a find a way to start measuring something other than age.
2

danogram

07/02/08 | Report as spam

RE: The End of the Middlemen (i.e., Newspapers and TV Networks)

Well, I wouldn't throw commercial radio into the junk heap, yet. With Limbaugh's reported Clear Channel and Premier contracts totaling $400 million dollars, I sense that ancient vehicle will continue to have a place in media for some years to come. It became mobile many decades before Ipods and Blackberry's were even science fiction. The auto industry has added lots of nifty gadgets in recent years, but I haven't noticed any trend to eliminate good old fashion AM/FM from the mix. Nor have I noticed many large contracts for removal of receivers one finds almost everywhere one goes.

While technology has suffered repeated blows upon newspaper organizations, it's difficult to understand resistance to technological advances as a strategy to stem the bloodletting. To the extent that newspapers have embraced new technology and successfully adapted their historic ???middleman??? role, they have begun to understand that ???news??? will still have to come from somewhere. The infrastructure to gather, organize and disseminate the news has value.

What the news industry in general has been slow to recognize is how far out of touch they have become over the years. As Americans' choices have mushroomed, they have increasingly demonstrated preference for alternative sources. What has become popularly known as ???Main Stream Media??? has repeatedly violated the trust of its once captive audiences, apparently due in large part to agenda bias imposed by the few who dominated MSM content. Too often that bias has been seen as contrived and contrary to the views of the audience, especially as American audiences have been able to obtain information which increasingly highlights that bias.

As the MSM, including newspaper organizations, continue to adapt their strengths to the evolving technologies, they must confront these biases frankly and aggressively; unless they can purge themselves of anti-American agendas, no amount of adaptation will save them.

Disintermediation will work when applied by those in the industry who are humble enough to understand why the likes of Predictify.com works.
3

Moose Wiener

07/04/08 | Report as spam

RE: The End of the Middlemen (i.e., Newspapers and TV Networks)

The data about loss of valuation and increase in audience age is very powerful. My father, who is eighty, has subscribed to the NY Times his entire adult life, and just canceled it last week...he is now downloading his favorite columnists and forgoing the rest...though I think the first Sunday that The Times does not come he may go into withdrawal.