Dearth foresees further contraction

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DO: Continue to diversify revenue streams beyond advertising. DON'T: Count on ad revenue coming back strong in every industry. There are just too many alternative media options available to reach end-users. Jeffrey Dearth Partner, DeSilva & Phillips Jeffrey Dearth sees a shakeout coming among b-to-b magazines as the recession seems to be gaining strength. Dearth, a partner at media investment bank DeSilva & Phillips, said the current economic crisis is different from the comparatively tame down-turns of 1991 and 2001. “I've never seen anything like this,” he said. “I don't know anybody who has seen anything like this. We don't know when it will bounce back.” Dearth said many b-to-b publications are already feeling the impact. “In a macro sense, the current economic crisis has accelerated the paradigm shift that was taking place with advertising moving online,” he said. “Clearly, the b-to-b publications that can survive the current falloff in advertising will come out stronger because this particular downturn will kill off the weak, in my opinion.” A number of technology publications, such as VARBusiness and both of TechTarget's print titles, have closed in recent months. “Tech made the first move to online in the early-to-mid-'90s,” Dearth said. “Tech publishers were some of the first to embrace online and to develop search engines—think of ZDNet and some of the other early Ziff Davis things that were quite successful. These [magazine closures] may be indeed a harbinger for some other industries.” —S.C.
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