We believe that there is a fundamental transformation of the media industry that is creating a disruption to traditional media companies and well as creating significant opportunities. We believe that we can position Know More Media to capitalize on these opportunities.
Decline of Traditional Publishing
The majority of traditional media are reporting declines in almost all key growth and profitability metrics. Consider these statements we pulled from various reports about the current crisis that is ongoing within Traditional Publishing
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"Tough year for the newspaper industry..."
- "The start of The Great Depression for professional journalists..."
- "Massive staff reductions have become and increasingly common development..."
- "More Than 2,000 Newspaper Jobs Lost"
- "New York Times Co. said...that its fourth-quarter profit would plunge 39% from that of a year earlier "
"Major...titles have experienced significant ad page erosion during 2005..."
(see the sources for all of these quotes here)
Why is Traditional Publishing Declining?
We believe that the decline in traditional publishing is in part because of an explosion in the supply of media choices relative to the demand. As Umair Haque pointed out, supply has increased because the cost to produce and distribute content has dropped dramatically because of the emergence of digital and online content. Since media spending as a percentage of discretionary spending has stayed stable for the last 20 years, an increase in the supply of content leads to a fall in equilibrium prices.
Therefore, we see falling prices, shrinking margins, falling ad revenues across mass media and falling circulation in newspapers, leading to a general media deflation.
» Distribution Revolution from Know More Media
We have talked about the democratization of media often and the opportunity that technology affords anyone to contribute a voice, an opinion or viewpoint. We believe this is a fundamental change in how companies can engage customers and potential custo... [Read More]
Tracked on: March 15, 2006 12:53 PM | Permalink to Trackback