Monday, October 12, 2009

"Sell-side" vs. "Buy-Side Media business models; look who'se winning.

A recent article in Ad Age by Bradley Johnson gives a good perspective on the ongoing upheavals taking place in the media industry but what caught my eye was one of his charts - shown at right - which shows that two (2) of the top three media categories that grew in 2008 vs. '07 - and which also grew in the first half of '09 - were from business models that monetize the "buy-side" via subscriptions. There are many factors impacting traditional ad supported media not the least of which is the shrinking ad budgets due to the down turn in the economy but what is most interesting to note is that consumers (e.g. professionals, homeowners, etc.) remain willing and able to pay for good, useful high quality content and will continue to do so. The Ad supported business model is not dead, far from it but it will remain under extreme pressure for years to come thanks to the more measurable, ever improving and less costly digital media. However, in the years to come I believe that there will continue to remain an opportunity for profitable, long-term growth for those media firms that can transition (no easy task) from a strictly ad supported business model to some combination of both ad and subscription or perhaps even a pure subscription-based business model. This transition won't be easy for many who have grown up and existed solely via an ad supported business model but those who can and will change will survive and grow.

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