Structural or cyclical?

As the chairman of the Specialised Information Publishers Association (SIPA) in the UK I recently had to write my introduction for the member’s newsletter. Seeing as the contents don’t make it online currently (all will be rectified on a new site soon) I thought I would reproduce it here & also give a plug for a morning event I will be hosting next Tuesday 25th November in London on search marketing (with eminent speakers from Incisive Media, Euromoney Institutional Investor,  the Telegraph Group & Jobsite). 

Chairman’s introduction, November 2008

Structural or cyclical?

Over the past few weeks there have been seemingly endless stories in the UK & US press covering closing titles, layoffs and advertising downturns in the media sector. No-one can doubt that we are entering a fairly severe global recession (and very few remain unaffected) but the question I think we need to ask is how much of what is going on in our industry is cyclical and how much is due to our media world fundamentally changing?

I would argue that, for a lot of publishers, the current economic downturn can provide a convenient excuse to either ignore completely or not put the right level of emphasis into what we do about our changing world. I cannot believe the number of times I have heard otherwise sensible senior executives talk about having seen this all before recently. You youngsters haven’t lived through a recession. I was there in the late ’80’s etc… The cry goes out to batten down the hatches, keep a close eye on costs and wait for a recovery.

But what if they haven’t seen this all before? What if this time it is different? Did those executives in the music distribution industry look back on the advent of MP3s as being just the same as the previous evolutions of delivery – vinyl to cassette; cassette to CD? If so, what has happened to their businesses now? They’ve been disintermediated & lost a lot of power *cough* revenue.

The truth is that periods of economic difficulty often accelerate the pace of change in evolving industry sectors. I believe that the publishing industry, with the ongoing shift from print to digital, is right in the eye of this storm. While everyone is excited by the move online there remains a big challenge to create the right business models and really answer the questions “How do I make the same levels of money from my online activities that I did from print?” 

This is again where associations like SIPA come to the fore. One of the things I have always valued from SIPA is the ability to talk about real issues without a need for corporate posturing. We need to face up to and embrace change. We need to share stories from the trenches of how our companies have adapted & the new models we have created. We need to spend even more time learning, networking and talking to our peers. Ultimately we need to know that our businesses will rebound from recession, but probably in a very different shape from that which they went in.

I look forward to seeing you at a SIPA event soon.

Rory.

Your comments and thoughts are welcome. How much of what is happening to the media industry currently is cyclical and how much is structural and, more to the point, what shape will our industry come out of recession in? I’d be interested to hear your views, please leave any in the comment section below.

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