It All Ads Up: Alas, We Own Media Matters

"People perpetuate themselves through the images they create."

Errol Sitahal, Tony Hall from And the Dish Ran Away With the Spoon

With the recent closure of Gayelle TV’s News Department one wonders if there is any more fallout to come with respect to local media. This conjecture is by no means to cast any mal yeux (pronounced locally as: mal-jo) i.e. bad or evil eye, upon the local media fraternity but is simply made within the context of the current global economic downturn, which, of course, is having an impact on the local economy. Across the globe, the economic squeeze is being felt in varying sectors and the media industry has not escaped the constricting economic embrace.

Although, at least in the U.S., there has been some recent lightening of the dour recessionary rhetoric from the U.S. President himself, when he was widely quoted in the media on Tuesday April 14, as seeing “glimmers of hope” for the U.S. economy. Mr. Obama’s statements were later on the same day followed by similar sentiments from the U.S. Fed Chairman, Ben Bernanke, who was reported as stating that “recently we have seen tentative signs that the sharp economic decline in economic activity may be slowing.”

But the U.S. media, particularly newspapers, have not been faring well: a negative consequential continuation of the growth of online media and cable, and which is now seeing a further dampening of the outlook for the industry with the current economic climate. In the U.S. from the State of the Media 2009 Web page, produced annually by the renowned Pew Research Center, the report starts with a succinct and telling statement, “Some of the numbers are chilling.” It goes on further to state in the introduction that: “This is the sixth edition of our annual report on the State of the News Media in the United States. It is also the bleakest.”

It reports a 23% fall in newspaper ad revenues in the last two years, along with the bankruptcy and loss in stock value of newspaper companies. With respect to the Internet the report states:

“The number of Americans who regularly go online for news, by one survey, jumped 19% in the last two years; in 2008 alone traffic to the top 50 news sites rose 27%. Yet it is now all but settled that advertising revenue—the model that financed journalism for the last century—will be inadequate to do so in this one. Growing by a third annually just two years ago, online ad revenue to news websites now appears to be flattening; in newspapers it is declining.”

In the U.K. a December 2008 article "Writing on the Wall for Newspapers" (you can register for free to read the article) in the Financial Times relating its findings from Deloitte and GroupM (a media and marketing forecasting company) industry reports, mentioned predictions of a fall in ad revenues for the newspaper and magazine industry by as much as 20% in 2009. In U.S television the situation of industry decline seems the same, at least for traditional broadcast stations. In "The Not-so-Big Four," an article in the April 8 edition of the Economist it states that:

“Local television stations, many of them owned by or affiliated with national broadcasters, have seen advertising revenue fall by as much as 40%... It is not that people are watching less television. In the last quarter of 2008 the average American took in 151 hours per month, an all-time record, according to Nielsen, a market-research firm. The trouble is the growth of choice. More than 80% of American households now get their television via satellite or cable. To them, the broadcast channels are just items on a menu containing hundreds of dishes.”

From the evidence it is clear that consumers are moving from old media to new media, from print and broadcast to the Internet and cable. Back in May 2008, Advertising Age, the barometric publication of the U.S. and global advertising industry reported -"Revenue Grows by 8.6% Propelled by Digital" - that the acknowledged big four of global advertising, Omnicon, WPP, Interpublic, and Publicis generated 12.3% of worldwide revenue from digital services.

One way in which print is seeking to remain relevant is by bridging onto the digital world via QR (quick response) codes. This is a patterned image that contains a URL code or internet address. These codes are placed together with their print ads in magazines (they have been and are used in billboard and bus advertising as well) and allow the reader with a cell phone camera to photograph the image and then 'dial' or link to the company’s web site via the stored code to make further enquiries of the product or service being advertised. QR codes have been in use in Japan, where they were developed, since the mid 90s. They are now gaining greater attention in Western media markets. (See the QR Image code created for this blog in the right menu: visit qrcodekaywa.com to do the same or any other QR code generator web sites.)

Our local media environment has grown tremendously in the last two decades. From the listing provided on the TTPBA (Trinidad and Tobago Publishers and Broadcasters Association) Web site, there are some 37 FM radio stations and 10 television stations. There are three television subscription companies. Along with these we have three dailies, about a half dozen weekly newspapers and just over a dozen local magazines. With a population of only just under 1.25 million (according to the CIA Factbook Web site) it certainly does seem like a challenge for all these media entities to survive. However, according the Trinidad and Tobago Business Guide 2008/2009 (a 'Business Guide 2009/10 is already available), unlike other markets, local “newspaper circulation continues to grow compared to circulation decline of newspapers globally.”

Whether this remains the case as we attain greater online penetration remains to be seen. All three dailies provide significant free online content and if advertising revenues do become tight perhaps there might be some changes to this in the future. In terms of circulation figures, again according to the local business guide, the Express leads with 75,000, Newsday 65,000, and the Guardian 45,000. And perhaps as some tell-tale sign of desiring increased revenue, all three dailies have recently increased their cover price from $1 to $2. The overall local advertising spend however continues to grow from TT$253M in 2005 to TT$330M 2006. For 2007, the Who’s Who in Trinidad and Tobago Business Web site estimated the local advertising spend at TT$636M. Despite such figures, Gayelle however was forced to close its news department as the station’s ad revenues were down 50% as stated by its Executive Director, Errol Fabien.

In a related issue of Caribbean media, from several media reports earlier this month, Michael Lee-Chin, the billionaire Jamaican–Canadian investor, announced that a deal was close at hand for the total or partial sale of Columbus Communications Inc, his cable television Internet service provider and digital telephony company (which operates in 21 countries throughout the Caribbean (including Trinidad and Tobago where it trades as Flow) and Latin America. The deal according to a Gleaner report is to help AIC Barbados (the holding company for Mr. Lee-Chin’s Caribbean businesses) pay off US$170M in principal and interest on maturing promissory notes held by Jamaican investors.

According the the Gleaner (Lee-Chin to Announce AIC Asset Sale - Flow could provide J$15B financier needs to pay debts), Lee-Chin bought Columbus from a consortium of telecom firms in 2004 for US$80M and at present the company is said to be worth between US$200M to US$300M. The lead rumored buyer in the Columbus deal is Carlos Slim Helu (one of the world’s top three richest men) who owns América Móvil, the holding company of Claro, the latest entrant in the Jamaican wireless telephone market. América Móvil operates in 17 countries across the hemisphere.

From all this, it is typically clear that those with ample funds are more likely to weather and adjust accordingly when bad economic storms form. With the government bailout of the CL Financial Group, it seems that its subsidiary CL Communications, with its three radio stations (90.5, Music Radio 97, and Ebony 104), have been spared any woes. However, not too far afield in the region, it still remains unknown if the Antigua Sun, or the Sun St. Kitts/Nevis newspapers, both subsidiaries of Sun Printing & Publishing Ltd, owned by Texas billionaire Allen Stanford, now under investigation by the US Securities and Exchange Commission, will suffer any consequences as a result of their flamboyant owner’s current troubles.

Gayelle is not as well heeled as these other media entities. Hopefully, for their sake, they just had a slip and lost their rhythm with the lam-weh in the gayelle that is the business world and has not suffered a serious blow from the bois of a beleaguered economy. Advertising is the fuel and food of media…and so Gayelle may well question, alas yet again, whether the dish (or the cable) has run away with its spoon.