Publishers' Multiple Challenge; CREATIVE MEDIA Cable and Satellite Firms Can Weather the Recession

The Birmingham Post (England), February 16, 2009 | Go to article overview

Publishers' Multiple Challenge; CREATIVE MEDIA Cable and Satellite Firms Can Weather the Recession


Cable and pay television, business-to business publishers and diversified agencies are best placed to weather the current downturn, according to a new report Ernst & Young's "Media & Entertainment... by numbers" report highlighted that commercial television and radio are exposed, with newspapers performing worse than in previous recessions.

The report also found that the United Kingdom media industry is suffering from the "multiplier effect" - whereby media companies' structural challenges are being exacerbated by the onset of the recession.

Ernst & Young head of media and entertainment, Michael Rudberg, said: "The primary structural challenges faced by the media sector include the continued migration online and viewer-fragmentation.

"These trends were not as prevalent in previous recessions and will be amplified as consumers increasingly turn to the web for free content and advertisers increasingly demand measurable return on investment for their reduced advertising spend."

But cable, pay television andB2Bpublishers will be the best performers in the recession, thanks to their low exposure to advertising and large subscriber base.

Large media agencies will also be among those who will remain resilient as the consolidation process that has been going on for over 20 years has made the industry stronger, more diverse and geographically broader.

Emerging markets are still a growth opportunity and a strong international strategy is a must for media agencies if they are to offset the decline in UK advertising spend, Ernst & Young found.

Market research is another area where the recession is less likely to hit. Historically, the top research companies' organic growth has outperformed that of the major advertising agencies and forecasts suggest that this will continue, but the report's authors gave a glimmer of hope for industries dependent on advertising spend. …

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