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The Financial Times warns of "carnage" in digital media


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Jonathan R

The Financial Times newspaper of London has just run a piece warning of "carnage" for digital publishers. It notes that this year was a year in which many online outlets were expecting to make a profit for the first time, but are now facing huge losses (article is behind the paywall).

The biggest issue facing online publications is that advertising revenues are collapsing, and many digital outlets cannot fall back on the subscription revenues that are sustaining The New York Times or Financial Times.
Some key takeaways in the article are:

  1. Buzzfeed was expecting to make about $30m in profit this year. Now it may lose as much as $20m this year.
  2. Group Nine hoped to make its first-ever profit but now may not.
  3. Online advertising sales are expected to drop 19-23% this year

Perhaps the most damning quote in the article is this:

    

Quote

Every day that goes by it is just harder and harder to sustain this business. Everyone was pretty reliant on display advertising and they are just being squeezed out,” said an early executive in the sector. 


Many of these organisations are cutting staff.

Meanwhile in Africa print titles are struggling. 

Media24, Africa's biggest newspaper publisher (it is based in South Africa), is cutting about 500 jobs and closing newspapers and magazines including the Sunday Sun. Reuters reported that for some publications advertising has fallen by 40-100%. It said that:

Quote

“The writing’s been on the wall for the global print media industry for years,” said Dinesh Balliah, media studies lecturer at Wits University, adding that more closures locally would follow with newspapers struggling to monetise online content.

 

Broadcasters in Africa are also feeling the strain. Primedia, South Africa's main independent broadcaster (with several radio stations and a national television news programme) said it will have to cut staff.  In a note to staff it reportedly said:

Quote

"To secure a Primedia that is sustainable and resilient against future challenges, it is critical that we have the courage to take any tough decisions we may need to now.  Simply put, this means that as a responsible business, Primedia must investigate the possibility of a staff restructure."

 

Are you affected by these changes? What is happening in your newsroom or country? Please share in the comments below.

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