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Tuesday, Mar. 27, 2007 at 3:51 am

Life Offline is Dead?

By Robert Gorell
March 27th, 2007

More than ever, it’s become clear that the scope of media distribution has changed–even eroded–some our most treasured entertainment models.

But whose obituary should we read first? Newspapers, Magazines, Music, or Video… Hmm… How about all four, thanks to Chief Blogging Optimist, Don Dodge, whose Next Big Thing blog gives us some in-depth research with a light garnish of buzz.

Linking around the blogosphere, Dodge shows us that:

Robert Scoble declares newspapers are dead. PaidContent says InfoWorld Magazine is dead. TechMeme has collected lots of blogger stories on the subject. Disrupted maybe…but not dead. Napster disrupted the music business and YouTube is disrupting video. Anything that can be digitized is being disrupted by the Internet.

I wrote about this a year ago in Are newspapers and magazines dying? Here is the killer quote from that blog post;

At its peak in 2000, The Mercury News had a Sunday circulation of 326,839 subscribers, according to the newspaper. Last September, the company counted 278,470 Sunday subscribers, a drop of about 15 percent. Revenue from the company’s help-wanted ads fell to $18 million a year from more than $118 million, according to the paper. The newsroom was whittled to 280 people from 404, a 30 percent decline.

Dodge goes on to announce that the “music business is dying,” and that sales are off 20% from last year continuing its 7 year decline. “Did Napster kill the music business or is ‘rap’ todays ‘disco’?” wonders Dodge.

As an erstwhile music journalist, I couldn’t help but comment. Sure, online media have been more powerful than expected. But isn’t it true that, until lately, the entire online space has been at once over-hyped and under-valued? Bloggers need news organizations in order to ensure that they’re not drowning in their own hype. News organizations need bloggers to help ensure their content is topical, fresh, and edgy.

Is the music industry dead, or are physical albums dying because the distribution model has shifted? Are newspapers dead, or is selling news on recycled newsprint dying?

Over at ye olde struggling newspaper, The New York Times, Jeff Leeds ads some depth to this story in a piece entitled “The Album, a Comodity in Disfavor.”

As Leeds tells it:

Last year, digital singles outsold plastic CD’s for the first time. So far this year, sales of digital songs have risen 54 percent, to roughly 189 million units, according to data from Nielsen SoundScan. Digital album sales are rising at a slightly faster pace, but buyers of digital music are purchasing singles over albums by a margin of 19 to 1.

Because of this shift in listener preferences — a trend reflected everywhere from blogs posting select MP3s to reviews of singles in Rolling Stone — record labels are coming to grips with the loss of the album as their main product and chief moneymaker.

In response, labels are re-examining everything from their marketing practices to their contracts. One result is that offers are cropping up for artists like Candy Hill to record only ring tones or a clutch of singles, according to talent managers and lawyers.

At the same time, the industry is straining to shore up the album as long as possible, in part by prodding listeners who buy one song to purchase the rest of a collection. Apple, in consultation with several labels, has been planning to offer iTunes users credit for songs they have already purchased if they then choose to buy the associated album in a certain period of time, according to people involved in the negotiations. (Under Apple’s current practice, customers who buy a song and then the related album effectively pay for the song twice).

But some analysts say they doubt that such promotions can reverse the trend.

“I think the album is going to die,” said Aram Sinnreich, managing partner at Radar Research, a media consulting firm based in Los Angeles. “Consumers are listening to play lists,” or mixes of single songs from an assortment of different artists. “Consumers who have had iPods since they were in the single digits are going to increasingly gravitate toward artists who embrace that.”

All this comes as the industry’s long sales slide has been accelerating. Sales of albums, in either disc or digital form, have dropped more than 16 percent so far this year, a slide that executives attribute to an unusually weak release schedule and shrinking retail floor space for music. Even though sales of individual songs — sold principally through iTunes — are rising, it has not been nearly enough to compensate.

Speaking of the media landscape’s whiplash-inducing evolution, Time, Inc. just announced that it will be pulling Life magazine from the shelves in order to maintain the American staple an online publication.

According to Yahoo! News, which posted the story compliments of Reuters:

Time Inc. said… it would stop publishing Life, the iconic photography magazine that has been a weekly newspaper insert since 2004. Although April 20 will be Life’s last print issue, the brand name will survive on the Internet.

It is the latest magazine to shut down as more readers desert print publications for online news and photos.

“Growth requires taking risks, and the potential upside was huge, but unfortunately the timing worked against us,” Time Inc. Chief Executive Ann Moore said. “The market has moved dramatically since October 2004, and it is no longer appropriate to continue publication of Life as a newspaper supplement.”

Time is laying off 15 editorial workers and 27 in its business department in connection with the shutdown, said spokeswoman Dawn Bridges.

And now for the obvious rhetorical question du jour: If Life itself is dying offline, doesn’t that mean everyone who wants to be spared should be online?

(For more daily analysis on stories like this, be sure to listen to Blog Buzz on WebmasterRadio.fm.)

Add Your Comments

Comments (4)

  1. Robert, Thanks for the thoughtful comments on my blog. Let me return the favor.

    Declaring “newspapers are dead”, as Scoble did, makes for great headlines, but the truth is newspapers and all Intellectual Property is being disrupted by the Internet. Dead? no. Disrupted? yes.

    My point was to step back and look at the larger picture, not just focus on newspapers problems or magazines in the case of Infoworld, but to look at all forms of Intelectual Property that can be digitized and distributed on the Internet. Music, video, newspapers, magazines, and even software, is being disrupted.

    You are correct that distribution methods and costs are one of the problems. People still want music, video, and news, but they are getting it from different distribution channels (Internet) that have very different cost structures and business models.

    There is plenty of time for the big music labels, film studios, and newspaper chains to react and evolve. The smart ones have already started, the rest will cling to their standard business for as long as possible and slowly go down hill.

    The music industry has a long history of selling one or two good songs on a CD for $20. Consumers had no choice but to take the junk with the good songs. Now consumers can buy singles on the Internet and that has radically changed the economics of the music business. Now it is the record labels that have no choice but to adapt.

    As part of the Napster team back in 2000 I am proud to have played a small part in the transformation of the music business to provide choice for consumers.

    The same transformations are rippling across all IP businesses today…including software.

  2. They said we’d have a paperless office too.
    We don’t.

    As for circulation numbers dropping, that’s just because things have changed. And newspapers haven’t changed with the times. Sure they’ve gone online in their own clumsy way–but is that what the reader wants?

    When we got electricity, the candle industry went out of business. Or did they? When a new wave sweeps, they’re going to have to ride the wave for what it is. Newspapers, CD sales–they’ll all die when they keep doing what they’re doing.

    Our business was fully online.
    We’re moving in big chunks offline.
    You think offline is un-profitable? Nope it’s not. But you can’t use 1980′s thinking in 2007.

  3. Don, Thanks for clarifying even more. Yes, this is definitely an evolutionary thing.

    You’re right; it’s hard to compete with free, especially when they’re over-charging to begin with. With Napster–especially at that time–you were at the epicenter of the corporate backlash tsunami. Of course, Napster is disproportionately blamed/praised for the market disruption (Kazaa, LimeWire, and now any number of free file-sharing programs have done the job since), but my kingdom to have been a fly on the wall for some of those conversations! Still, I find it kind of funny/sad that so many consumers and so many music industry folk still think this is a war between business and consumer. THAT’s what I don’t buy…

    Once the distribution model works itself out a bit more, I like to think it will get better for the consumer (more choice), better for the industry (more in touch with what the customer wants and how/where to sell it), and… oh, yeah… better for the ARTISTS (more $$$).

  4. Sean, Your comment is spot-on. That last line should be on every online marketer’s desktop–the one that saves the computer from gravity, that is ;)

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