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.

Some paid content will come back as publishers also realise they can charge for mobile phone access and e-readers like the Amazon Kindle. Not all these experiments will work, but some will.

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.

 

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  • Kevin Gordon

    All new media eventually settle themselves in the sands of time. The human race is incredibly adaptable, which is a comforting thought considering the future challenges ahead which will not allow us to consume on such massive scale.

    Future content has to be virtual to ensure it works within the context of future resources available. Intellighent manufacturers who understand this are gearing-up for the future. Some are building their markets now to a peak for maximum yield while the old system remains intact in order to maintain a greater market share of a diminished market sector when it comes crashing down as production costs go up. Problems facing newspapers now will be the same problem facing every manufacturer of the future in a sustainable world.

    Manufacturers have much to learn from the newspaper industry. Where to go, and where not to. Unfortunately for some major car giants it is already too late.

    In retrospect, it makes you grateful the UK govenment shed its automotive and coal industries years ago, although the scars and pain of such events still live in the minds of many. In other ways, its bad news we should still be polluting the world by making vehicles in countries where power generation is unregulated.

    Walking the carbon footprint does not reduce it.
    It simply places it in a convenient location out of sight.
    The only real way to solve any problem is to work through it, not around it,
    and unfortunately, pain is an unavoidable part of that journey.
    Ask any coal-mining community.

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