The Future of Legacy Media: With 5 years of Digital Disruption Ahead, What Happens Next?

Apr 08, 2014, 11:27 ET from Reportlinker

NEW YORK, April 8, 2014 /PRNewswire/ -- announces that a new market research report is available in its catalogue:

The Future of Legacy Media: With 5 years of Digital Disruption Ahead, What Happens Next?

The Future Ain't What It Used to Be

Not long ago it was easy to predict the future of media. As each new medium came along, the old ones just kept slogging along. But, the media world changed about five years ago.
To understand the future, we need to go back to the 1980s, when the nation's media universe was well defined. Advertisers were happy putting messages in newspapers, magazines, yellow pages, broadcast TV, cable, radio, direct mail, and out of home venues. Until the end of the 20th century, these were the totality of advertising media. Back then, many very bright and dedicated media people viewed the new upstart, electronic "new media," much the same way Bill Gates viewed the fledgling PC market of the 1970s – for hobbyists.

They were right, at least initially. PC-based media started out as bulletin boards in the late 1980s with the likes of CompuServe, Prodigy and America Online. Even in 1993 as the Internet became an open-access system, byzantine information channels with names like Gopher, Archie and Listserv made it all looked pretty esoteric. Then things changed. The web became graphical. Access speeds increased. Yahoo! organized everything. Google made things simple. Internet access hit critical mass, half of all U.S. households, in 2004. Everything went from dial-up to "always on" high-speed. Massive disruption that had been set in motion nearly two decades earlier accelerated around 2008. Over the past five years, daily usage of traditional media has fallen by one-fourth or more. Five more years of disruption is likely ahead of us. A reduction of another one-fourth or more in audience usage for old-time media is likely to occur by the end of 2018.

Two pre-Internet media choices have avoided declines: cable and out of home. They are the only two that show prospects for robust long-term growth. All "Internet" media have shown healthy growth in daily use during the past five years.
With digital-media usage growing faster than advertising share, media gurus have touted the disparity as a predictor of growth. While interesting, it misses the point. Ad value is commensurate with audience value, not with the length of time an audience stares in its direction. For instance, miniscule amounts of media time is spent with print yellow pages, yet advertisers still placed nearly $8 billion worth of advertising in the books last year, equating to $18.9 million per minute of consumer usage, versus $1 million per minute of TV usage.

There are indeed more dimensions to the equation. Readers of People magazine aren't as valuable as readers of a local dining guide – at least to restaurants. And visitors to aren't as valuable as visitors to – at least to car dealers.
Future value, we believe, rests in media that have the potential to grow audience while delivering specific targets. Two come immediately to mind: cable and online. In 2013 "addressable cable," or the ability to deliver a specific commercial to a specific neighborhood or household, became a reality for several cable companies. In the coming years they will be able to drive far higher CPMs on TV spots by delivering, for instance, spots for the local Lexus dealership only to high-income households within a 10-mile radius of the dealership. Online media holds the same potential, which we're seeing in display and video advertising targeted to specific users based on sites visited, location, search terms entered, or other personal data.

Will digital media completely replace analog media? Not in the lifetime of anyone reading this report (though we have doubts about the long-term prospects of print yellow pages.) Legacy media continue to play an important role informing, entertaining, and selling products and ideas to the nation. While their clout may continue to diminish, it is unlikely that any will disappear. Indeed, no medium ever has. Instead, each morphs and adapts. Over the decades, newspapers transformed from gray, pictureless broadsheets of national news to vibrant, colorful and narrower papers that deliver more local headlines than national. Radio has gone from an evening gather-round medium to a more personal daytime medium emanating from dashboards and earplugs. And outdoor advertising went from paintings on the sides of brick buildings and a few roadside signs to a plethora of digital screens that flash ads in taxicabs, sports stadiums, elevators, gas pumps, interstates, grocery store aisles and even bathroom stalls.

This 42-page industry paper represents a deep dive into how legacy media's audience and revenues are trending. A full chapter is devoted to each medium, examining what's likely to happen by 2018 to radio, broadcast TV, direct mail, cable, newspapers, yellow pages, and "other print" (magazines, etc.). Will newspapers die out to tablet usage? Do yellow page books disappear? Can cable advertising continue its growth jag?

This report contains four dozen charts and graphics and delivers analysis on the changing role of digital media as these "old-time" companies struggle to recreate themselves. Conclusions foresee three distinctly different types of companies foraging for ad dollars on the local media landscape. Sources include Scarborough, Nielsen, the Newspaper Association of America, Veronis Suhler, Consumer Electronic Association, Arbitron, the U.S. Postal Service, Market Authority and Borrell.
Introduction 5
Fig. 1 Shifts in Average Daily Time Spent by Media Choice, in Minutes 5
Fig. 2 The Media Value Myth: 'Intent' Trumps Time Spent 6
Fig. 3 The Value of "Time Spent" With Media 7
Fig. 4 Time Spent With Old Media vs. New Media 8
Fig. 5 Winners and Losers in 'Time Spent' 8
Chapter I: Newspapers: Stabilizing 9
Fig. 1.1 2013 Daily Newspaper Readership Percentages by Age Cohort (Year of Birth) 9
Fig. 1.2 Total Newspaper Spending by Ad Category – 2000 through 2013, in $ Billions 10
Fig. 1.3 Total Newspaper Spending Forecast by Ad Category – 2013-2018 11
Chapter II: Broadcast Television: Big Changes in the Wind 12
Fig. 2.1 Weekly Time Spent, Traditional TV Viewing, by Age Cohort – in Minutes 12
Fig. 2.2 Broadcast TV Ad Spending, 2000 through 2013 13
Fig. 2.3 Broadcast TV Ad Spending Forecast, 2013 through 2018 14
Fig. 2.4 How Households View Broadcast TV 14

Chapter III: Cable: What Comes Around, Goes Around 16
Fig. 3.1 2013 Cable TV MSO Share, in Millions of Households 16
Fig. 3.2 Cable TV Ad Spending: 2000-2013 17
Fig. 3.3 Cable TV Ad Forecast: 2013-2018 17
Chapter IV: Radio: Treading Water 19
Fig. 4.1 Where People Listen to Radio 19
Fig. 4.2 Radio Ad Spending 2000-2013 19
Fig. 4.3 Forecast Radio Ad Spending, 2013-2018 – in $ Billions 20
Fig. 4.4 Online Radio Listeners by Age Cohort 20
Fig. 4.5 The Radio Listener Market 21
Chapter V: Directories: Old Habits Are Hard Break 22
Fig. 5.1 Rural America Prefers the Book Over Google 22
Fig. 5.2 Adult Use of Yellow Pages 23
Fig. 5.3 Percent of Adults Who Use Printed Directory More than Once a Month, By Age Cohort (Year of Birth) 24
Fig. 5.4 Total Directory Ad Sales 2000-2018, in $ Billions 24
Chapter VI: Direct Mail: The Biggest Cliff Drop of All 25
Fig. 6.1 USPS First-Class Mail Volume, 1990-2012 – in Billions 26
Fig. 6.2 Total Direct Mail Ad Spending 2000-2018, in $ Billions 26

Fig. 7.1 Mid-Year U.S. Magazine Starts and Stops, 2011-2013 27
Fig. 7.2 "Other Print" – Adult Readership During Past 6 Months 28
Fig. 7.3 Total Other Print Ad Sales 2000-2018, in $ Billions 29
Chapter VIII: Legacy Media's Spindly Digital Legs 30
Fig. 8.1 Legacy Media's Share of Online Ad Spending, in $ Billions 30
Fig. 8.2 TOTAL Online vs. Offline Advertising: Lines Meet in 2018 ($ In Billions) 31
Fig. 8.3 LOCAL Online vs. Offline Advertising: Lines Cross in 2017 ($ In Billions) 31
Fig. 8.4 The Pac-Man Cometh: Pureplays Control 88% by 2018 32
Fig. 8.5 Digital Forecast for Legacy Media: Revenue Grows, Share Shrinks 33
Fig. 8.6 Trending for Newspaper Digital Revenues to 2018, in $ Billions 34
Fig. 8.7 Trending for Broadcast TV Digital Revenues to 2018, in $ Billions 34
Fig. 8.8 Trending for Cable Digital Revenues to 2018, in $ Billions 35
Fig. 8.9 Trending for Radio Digital Revenues to 2018, in $ Billions 35
Fig. 8.10 Trending for Directories' Digital Revenues to 2018, in $ Billions 36
Fig. 8.11 Trending for 'Other Print' Digital Revenues to 2018, in $ Billions 36
Conclusions 37
Appendix 38
Company Profile 40

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