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Traditional Media On Thin Ice

Traditional media is under assault from its consumers. They don't want to pay for content, they're going to different sources (including blogs) to find information, they're leaving television for online video, and their behavior is throwing the future economics of media into question.

Here are some examples: Time Warner's 2006 ad revenue fell 23.8% from 2000 according to the Publishers Information Bureau. The New York Times Company's stock trades at $25--half its 2002 share price. And the music industry's business model is completely caving in: CD sales fell 20% in the first three quarters of the year, while illegal file sharing is estimated at 1 billion, according to the research group BigChampagne.

Media companies are certainly responding to these changes--but there's still no proof that they've figured it out. Each week it seems, a new startup or technology comes to the fore, placing big media further behind the curve. Meanwhile, most of their new media purchases have yet to bare fruit.

Read the whole story at Marketwatch »

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