The Australian media industry relies primarily on advertising dollars to stay afloat. This is bad news for traditional/print media platforms, which have seen their ad spend plummet dramatically over the past few years — and it’s only going to get worse. This graph from investment banking firm Morgan Stanley paints an extremely grim forecast for print’s future.
Morgan Stanley is forecasting advertising declines of 7-8% annually for the coming five years in newspapers. For magazines, the forecast is even worse, at 8-9%. There has been a significant, sustained decline across both platforms since 1997. As Morgan Stanley explained in its report:
“TV, Newspaper and Radio companies are mature and in the declining phase of their life-cycle … on a 3-5 year horizon we forecast declining revenue, declining margins and falling ROEs.”
By contrast, online media has enjoyed a surge in ad spend, although much of this has actually been gobbled up by global tech companies playing in the local media space. According to Morgan Stanley’s data, these international players are expected to take out between 35% and 40% of this year’s total advertising pool. Nevertheless, if you work in media, newspapers and magazines are not somewhere you want to be.
[Via Business Insider]