Fragile recovery has publishers wary

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Most b-to-b media companies have bounced back this year after a dismal 2009. The consensus is that digital and event revenues are up, and the bleeding of print revenue has been staunched. But a number of media executives view the nascent recovery as extremely fragile, and they harbor concerns about the global economy: Open The New York Times and there's Paul Krugman warning about a potential depression. Look at the Dow Jones industrial average and see that it plunged more than 10% in the second quarter. And consider the Conference Board's Consumer Confidence Index, which tumbled almost 10 points in June. It's enough to make publishers worry about what a double-dip recession could do to the businesses they've worked hard to reconstruct. Scott McCafferty, founder of WTWH Media, which publishes Design World, cataloged some of the lingering economic difficulties: “Bank lending is too tight. Unemployment is still high. There's overall market volatility.” “It concerns me a great deal,” said Tim Fixmer, president of Stamats Business Media, which publishes Buildings, about the health of the broader economy. “It has a psychological impact on our advertisers, who are already edgy about their industry segments. The composite indices have been fluctuating in recent weeks, and any downward trend can cause businesspeople to freeze at the switch. This freezes the dollars needed to fund our ad-based media models.” “We're concerned about the manufacturing sector,” said Richard Reiff, CEO of Advantage Business Media, “but the people we deal with are right now spending and trying to stay in the game. If there's more trouble, I'm afraid they may back off again and go dark.” Don Pazour, CEO of Access Intelligence, is concerned that consumer sentiment might negatively affect the markets his company serves. “My worry and/or hope revolves around consumer spending and confidence—and when housing will pick up sufficiently and joblessness will drop sufficiently that the consumer again begins to put some oomph in the economy,” he said. “We are in various markets—print and cable media, satellite, aviation and defense, chemical, energy, etc.—all of which have somewhat different characteristics, but all of which benefit from a robust U.S. economy.” Even publishers in sectors considered somewhat sheltered from economic fluctuations are worried about another downturn. Charles McCurdy, CEO of Canon Communications, said: “Canon's core sector served is medical manufacturing, which continues to show less cyclicality than many sectors. That said, capacity expansion does drive marketing spend, and a dramatic retightening of credit in North America and Europe could slow down our business.” —S.C.
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