As if you didn’t know things are bad, here are some numbers to prove it. In the first three months of the year, profit warnings from FTSE-listed media companies were up 60 percent from last year to 13, Ernst & Young says. In fact, media companies were second only to support service companies, on 22, for issuing profit warnings in the period.
E&Y blamed what have become the usual suspects – migration of ad spend to online, and the accompanying shrinkage of ad outlay generally. Falling ad spend prompted eight warnings, discretionary spending cuts claimed two, production cuts claimed another two and falling consumer spending was given as the reason for one media profit warning. Publishers and media agencies issued four warnings each, broadcasters and entertainment outfits gave five.
And E&Y’s media team of Michael Rudberg and Luca Mastrodonato suggest it will get worse – they dwell on GroupM’s survey last week which forecast a near-doubling in the annual decline of UK ad spend, down to 11.2 percent for 2009.
But all is not lost for all – “professional publishers with a strong subscriber base are proving the most resilient among B2B companies”, science and medical journals still have strong renewals, while pay-TV operators have positive outlooks. Mastrodonato: