5/12/14 UPDATE: AT&T to acquire DirecTV! Lock the doors – it’s scary out there.
2/12/14 UPDATE: Holy Crap, 2014 just got a whole lot uglier (and it was already hideous) with the announcement of Comcast acquiring Time Warner Cable!
ORIGINAL POST:
It’s coming.
Holy shit is it coming.
Millions are getting pummeled with a horrible winter but brace yourselves further, because you are in for a shitstorm of job cuts in 2014.
It will not be pretty.
It seems that media company CEOs are hell bent on proving to Wall Street that their companies can be growth companies.
Unless they fire every employee and start a new company by themselves in a garage, they cannot be growth companies the way Wall Street would like.
20% margins just will never happen again in the movie, TV, print, or music industries – so deal with it.
But these CEOs are guys (all guys) who think they can do anything.
But they will fail.
And then they’ll CUT.
And… it will not be pretty.
Tribune got things started.
My company’s CEO has called 2014 “The Year of the Hammer.”
No one will make it through unscathed.
First to go will be the packaged media folks. Those who support the production and distribution of DVDs and CDs and magazines, etc.
Gone.
Next will be the slow growth businesses – like movies and Broadcast TV production (serious like a heart attack).
Slates will be slashed, storytelling risk-taking will cease to exist.
Since no one can seem to do comedy anymore on Broadcast, they will be relegated to the epic mini-series format like “Under The Dome” and live Sports to stay afloat.
Then, finally, the low margin businesses will be hit – like console games. With the exception of a few huge titles, it’s a tough business and it certainly doesn’t help these overly-ambitious / delusional CEOs hit their targets.
So what’s going to be left? TV production for cable and Over-The-Top (OTT).
Why TV gets ownership of Internet content production is baffling to me. But they do.
By the end of 2014, giant media companies with their film studios, broadcast networks and massive real estate leases will be much MUCH leaner and the quality of the product will be much MUCH worse.
Hey, but a point of margin here and a point of margin there adds up to… 2 points.
But lighten up, Spring is coming.
Jill Kennedy – OnMedea
Yes it sucks to be typewriter repair.
Imagine working in an industry with a lifespan of 10 years. Who thought the DVD would only last a little more than a decade. The CD made it 25 years. Evolve or die.
I agree re the bloodbath coming, but not re the forecast future scenario – it’s possible that TV companies might dominate, but in my experience with them, which has mostly been in the UK, they are very ‘legacy’ business models as much under threat as other past and present legacy businesses / sectors. UK’s BT (used to be British Telecom) has launched an audacious challenge to Sky and is already eating into Sky’s subscriber base as well as threatening ITV (UK’s major terrestrial soup-to-nuts TV company). Yet my extensive experience with Telcos here and around the world tells me they’re still legacy models, albeit somewhat trimmed down legacy models. I would thing it’s more likely that one of the ‘new’ rich techs such as Apple, Google could dominate, although it’s a ripe target area for a private equity ‘buy and build’ strat.
As long as there is an ‘off’ switch on your TV, there is hope.
Here in Canada, the federal government – and one with “Republican style” leanings – is seriously going after the cable companies. The mandate? To provide the public with an entirely ‘programming on demand’ model. Pfffft go the private broadcasters and the “57 channels with nothing on.” They are also deregulating wireless/broadband to allow foreign competition for bandwidth. It could get really, really ugly. The fact of the matter is that the middle class STILL doesn’t have any dough, nor do they have job security. Outsourcing and technological disruption rumble over the landscape. Baby boomers hang on to their jobs, digging in their fingernails until their 85. Wait until the coming food riots begin.
Oh wait… is Print finally dead for real?
You haven’t noticed? It’s one of the most unsung, ignored facts, especially by intellectual sites like this one. First, you start with the fact that only ten percent of the American population knows how to read. Not “wants to read” or “cares about reading.” They simply can’t read. Thank the last few generations of American teachers who simply don’t give a damn about teaching.
And if people aren’t reading, magazines shrink and disappear, and newspapers are sad jokes, there is no income in publishing. What little money is made from advertising (no longer local since Walmart has put small stores everywhere out of business) has to go to keep the presses operating and the internet servers running.
Therefore, writers are no longer paid. You weren’t paid to write your comment. I wasn’t for mine. Ms. Kennedy wasn’t paid to write the column. Writing is no longer a paid profession; as soon as King and Rowling die, no writers will ever be paid, anywhere, anything, for any writing they do.
Why do you think web sites like this have pictures? It’s for the vast number of Americans that are illiterate.
A fan of “Idiocracy”, huh?
I remember seeing the start of this in 2008. At the time i was working for a company doing video editing. One day we had 30 pending projects the next we had 2. That was the economy hitting then the genius that own the companies decided to use college kids to do the editing since Final Cut Pro was used so often. sadly they found out that was a mistake so Apple made Final Cut Pro X basically a idiot proof version. Still did not help. Moral of the story is the guys at the top are clueless all they care about is the size of their wallet. A thinning of the herd is needed very badly guys like Ari Emanuel who is the guy that Entourage based the Ari Gold character off need to get chopped. All of the consolidating and thinning of the worker bees is killing the industry.
Wouldnt bother me if they all went out of business.
“Why TV gets ownership over Internet content production is baffling to me. But they do.”
Actual payment to content creators is still greater in TV than the internet where nobody wants to pay content creators. Simple.
Jill, buying Internet content site means tapping into great content just with one-time payment. As LT (above) rightly commented, content over the Net is free.
Take my blog for example: http://vickie1.wordpress.com/
it has great content, but I seem to be unable to attract an investor. Am actually thinking of installing “donation box”.
So TV moguls instead of paying screen writers, can simply and cheaply delve into the open to all and free international pool of creativity and talent. Would’n’t you like to get Manolos for free (or flea market price)?
>it has great content, but I seem to be unable to attract an investor
I’m sorry, but it does not have great content.
It doesn’t matter if she writes like J.K. Rowling or like Sarah Palin. There is nobody investing, because nobody has money to invest. Walmart has put the entrepreneurs out of business; they’ve been absorbed into the stockboy and greeter posts at your local WallyWorld. If they don’t invest, and if only ten percent of the American people know how to read, what makes you think anybody will pay writers of blogs or anything?
Face it, people. Literacy is a dying ember. America is STOOPID and will stay STOOPID because the One Percent wants us STOOPID. Enjoy each other’s writing, because when we die, nobody here will read any more.
@Thomas – you are right!.
@observations:
Well, then clearly YOU don’t have to invest 🙂 But something tells me that even if you found the content you liked, you wouldn’t open the purse to support it.
Jill, buying Internet content site means tapping into great content just with one-time payment. As LT (above) rightly commented, content over the Net is free.
Take my blog for example: http://vickie1.wordpress.com/
it has great content, but I seem to be unable to attract an investor. Am actually thinking of installing “donation box”.
So TV moguls instead of paying screen writers and footing costly productions, can simply and cheaply delve into the open to all and free international pool of creativity and talent. Would’n’t you like to get Manolos for free (or flea market price)?
But you fail to mention that these companies are also the internet providers, so dumping my cable tv service for watching internet content ISN’T the answer, as they will soon charge by the amount of broadband I use. Additionally, cost for only internet service is only $15-20 less than bundled service, because they don’t want you to dump cable. When the government agreed to ditch analog, they joined cable providers in taking away free access to television for people, a play for government control of tv when the time comes. One national cable company is on the origin, so the government regulates the cost, giving us “better service, better choices, than we have now, but if you like your cable company you can keep your cable company.”
The best scenes are these from the films you mentioned.
“Unless they fire every employee and start a new company by themselves in a garage, they cannot be growth companies the way Wall Street would like.
20% margins just will never happen again in the movie, TV, print, or music industries – so deal with it.”
What “Wall Street will like” is the problem. Wall Street is the problem. 20% margins are the problem. Either a business’s profitability explodes like a supernova, or it’s a “failure.” Wall Street is our problem. Wall Street is everyone’s problem.
Luckily, the businesses that are “growth companies the way Wall Street would like” are poised to raise global sea levels a couple of feet over the next few years. Wall Street will be accessible only by submarine.
Enjoy it while you can, boys. Why not celebrate the flood with a trip to a strip club? Don’t worry, Lloyd says you can put it on the company’s dime.