In the magazine business which has been hard hit by printing costs and advertising dollars going elsewhere, there have been a lot of start-up magazines and the risk you take by being an exec, editor in chief, publisher at a magazine that's a start up, the risk is huge - 80% of startups fail.
So the next level of this is, there are a lot of people who spent many years, let's use magazines, who then get bounced and they find themselves they can't find a job at another magazine, and they're not qualified necessarily to go over to the Internet side where things are happening. Whether it's been magazines, film or television, your success in that field doesn't automatically qualify you for a spot in the new technology area. Generally it's a younger peoples business. So you put in 20 years for this company, they say it's Tuesday, you're gone. There's no out-placement for these people, there's nowhere for them to go. It's become troubling so you're finding a lot of talented people leaving the business.
I see the trends also that at the highest echelons of the media business you'll find lawyers and MBA's. The business of film and television is much more sophisticated to the point where people with MBA's and law degrees who had good amount of experience in the field are the only ones rising to the top because they become a very bottom line industry where you make you're analysis like an investment banker. These days the studios are making fewer films so that effects employment.
I'm seeing less job security, except at the highest levels. Look at television alone. You have so many game shows and reality shows and that puts a lot of people out of business, from the writers and producers of scripted shows and the people in those divisions of the television company or executive producers or executives at the companies overlooking dramatic series. Once you get past a certain level the compensation packages get out of sight. Well, when the companies stopped making the good money the first thing they do is get rid of some people, more importantly they start to scale down their new packages. The next guy who comes in, gets told, look I know we paid this other guy $2 million a year with the opportunity to make $50 million, plus bonuses, plus packages. We can't do that now. We're going to pay you $1 million and we're going to pay you bonuses only based on earnings and we'll protect you in the short term. We'll give you a two-year contract.
When it comes to the magazine publishing business, if you're not a publisher or editor in chief, you're probably not getting a contract. When you enter a job at a magazine or television, or radio in particular, if you can't see clear that you got 2 or 3 years ahead of you, then it sinks every decision you make because you're not being treated as someone who's part of the team.
You want some form of assurance or guarantee, no matter how the company as a whole is doing you'll be entitled to a bonus at some level and you have an upside. These companies are seeing their profits eroded by tremendous distribution costs or because of the advertisers who once put $6 million a year into a magazine, now $3 million and $2 million in different media. So the erosion of their profits are very real and they're scared. Too many executives are flying without a net. Too many people working for companies with a potential if things go well, don't have any guarantee they'll be there the following year with anything to show for it or something to show for it if they get let go. At many of these companies if you're not near the top you're not getting a contract anymore.
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