Another way to ask this question: “will Apple’s iPad be bad for the media industry?” Right now traditional media is struggling. I’m not referring simply to print media which is getting more and more desperate for ways to stay alive but also broadcast media, as people spend more of their free time online. The iPad could be a game changer for the media. Why? Well, the iPad does two things:
1. It creates a new platform for the media – early views of the WSJ on the iPad suggest it is a far better product than the current online version. This in turn suggests the iPad offers, magazine publishers in particular, new ways of presenting their content. That’s got to be a good thing.
2. The iPad puts media back into the time equation – people currently spend their time online looking at Facebook, YouTube and Google because they like to explore, make connections, learn etc. But the iPad creates the opportunity for media to be a part of what they find and even look for. I, like many others these days, like to get news online. That said, even a laptop isn’t a great substitute for a good magazine or newspaper. An iPad may well be. In other words, given we have all become used to spending time with our computers that we would have spent with our TVs, the iPad may start to shift the balance back towards consuming media. Of course it will only do that if the content is worth us spending that time.
One thing is clear, if the media doesn’t grab opportunities like the iPad and the Kindle by the horns, then its steady demise will only continue. That would be a sad, sad situation. One that’s bad for society and of course for the media moguls. The latter doesn’t bother me so much but the former most definitely does.
On his quarterly call with analysts, News Corp chairman Rupert Murdoch said he intends to start charging people for access to their online content. He said the Wall Street Journal has proved it can be done. I wonder if he’s right. Right now you can access most of the WSJ for free. As an iPhone user I can access a good deal of WSJ content using the WSJ app on the iPhone. Also if you Google any WSJ news headline on your PC you can often see the entire article without a subscription.
Aside from the fact that the WSJ is free to many people, I also wonder what happens when he tries to take his publications behind a subscription wall. I suspect many of his readers will opt for a rival publication that doesn’t charge or for well written blogs. I also struggle to see the typical Sun reader paying a subscription. I know the news media business is struggling to find a profitable business model right now and that the subscrioptn model is an obvious place to look. I just don’t see it working for mainstream consumer publications. I can see people paying a blanket subscription in the same way they might do for cabel TV or satellite radio but for that thye need a broad range of titles to be the equivalent of channels on these properties. Murdoch is no fool and has made some shrewd moves in the media business. Launching his own media channel on the web that you can subscribe to but which contains news media from both his print AND broadcast properties. Now that I can see working if the price is right.
Listening to the investment community either directly or through organs such as the WSJ it is clear that they believe we could be heading for a recession in the next year. Indeed, I gather the probability of a recession is now at exactly 50%. Having gone through a recession that had no impact on tech PR and one that had a profound effect (the dot com crash), it isn’t easy to see how a recession may affect the industry, especially since the roots of this one would seem to lie in a mix of high oil prices and the credit debacle. What is clear to me, however, is that PR needs to get ready for the possibility of a recession. What does this mean:
1. We need to help our clients understand the value of PR versus other disciplines. This means we have to jump on measurement in a big way if it hasn’t already happened. The facts on the effectiveness of PR are very persuasive but without them…
2. Anticipate your clients demands – what do you think your client would want to do if sales slowed? who are their biggest customers and how can you help them protect the customer base? What kinds of bad news may they have to deal with and how can you help them through that?
3. Avoid taking on clients that are likely to be hit hard in a recession. I noticed an advert for Net Jets in the WSJ today and my first thought was: “well there’s a market that will get awfully hard if there’s a recession.”
4. Expect clients to consolidate their spend. Right now larger companies tend to spread their PR across firms to access the best skills for the job. If there’s a recession they may well look to streamline the number of agencies in a bid to save money. Asking yourself if your firm would likely win or lose from such a change is probably a good thing to do now.
5. Don’t take on new office space you won’t need. During the last recession a lot of PR firms got into trouble because they had expensive offices they had hoped to grow into. Indeed I know of two fifty person PR businesses that effectively went bust because their leases ran to over $1m. Of course taking expensive office space is a silly move at the best of times but imagine having to lay people off because of a glamorous reception area and you will soon opt for the humbler option.
6. Conserve your cash. People based businesses, like most, are often run on overdrafts but when recessions do hit they can become cash strapped very quickly. Agencies need to make sure they have a good handle on how their cashflow could change if revenues were to fall back. A good CFO will be able to model this quite easily and should be able to guide agency heads.
7. Remember your people. When recessions hit agencies can often focus too much on the client and forget that without good people clients will walk. This doesn’t mean that agencies should lavish money on their people that they don’t have. What it does mean is that they should think about what makes people stay at a firm apart from money. Career develoment, skills, the working environment, their colleagues – these are things that matter to people in any economic climate so don’t lose sight of them when an economy changes.
OK – off the top of my head this is my list. Hopefully it is a list we don’t need but in truth some of it is just common sense and should be how we run agencies anyway. Right?
PR people are meant to be nice to hugely important publications like the WSJ. Sadly I can’t resist taking a pop at the WSJ today. Why? Well today it proudly published its D supplement (they even have special stickers on those newspaper vending machines announcing its presence). In the supplement are a host of interviews with top execs including Bill Gates. There are articles on such racy topics as E-Commerce (does anyone use that term anymore?) and Laptop security. Think about that for a second (or two). There is no content here that is truly going to get the world excited. Certainly no content that is going to get people talking. I just can’t see people huddling round the cooler saying: “wow that piece in today’s journal was a real eye opener.” Let’s assume that the readership of the Journal is the investment community for now. If I were a fund manager, I’d hope I already knew the stuff in the Gates interview or the E-commerce article. Take the following question posed to Billg: “When are you going to ship the new Vista Operating System?” I don’t think I need to tell you that he said we’re on track to ship it in January. I have to say that it’s content like this that is getting traditional media into trouble.