No bounce back for traditional media says Ballmer
Steve Ballmer, the Microsoft chief executive, was sounding pessimistic in Cannes yesterday and warned publishers that there was going to be no bounce back and that the global advertising economy had reset for good.
Ballmer argued that traditional print media will have to plan business models around a smaller share of the advertising market.
To be honest not exactly a news flash. Nor is the fact that publishers are failing to generate serious digital revenues.
Ballmer said: “Once you get past the Google search site, you say, ‘Is there a publisher making a lot of money with an advertising- or fee-based model?’ The answer is no. We have to ask who will be creating the content.”
It could be me, but he’s sounding a tad pessimistic. I think one of the issues that people often forget when they predict doom and gloom is that this is all pretty new.
And in some senses the recession has been a benefit as it has forced publishers to maybe face up to questions about paid content faster than they might have done. It’s the thing about adversity driving innovation and development.
Ballmer talked about all content being digital in two, five or ten years, but it has only been ten years since we really got on this road and maybe only four or five since the levels of investment publishers were pouring in started to rise dramatically.
So far these are investments that have not been recouped. It’s been a period of experimentation: it began with charging; then it became free and now we’re back again with the realisation that it is probably a mixture of the two.
It is too soon to make sweeping judgements about making or not making money online. The challenge is to make money and to experiment.
What underscores all of them is continuing to build strong communities online and building loyalty. That’s the only way to ensure future growth and profitability.