NEWSLETTER #91/ November 19, 2017
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ONLINE MEDIA MELTDOWN
The remarkable power and dominance of Google and Facebook are taking a heavy toll on the rest of the online media world.
As we wrote recently, Snap (Snapchat) took a huge hit a few weeks ago. This week there was more bad news for a group of struggling online media properties.
Oath (the absurdly named parent of Yahoo, AOL and HuffPost) announced it was laying off another 500+ people. They laid off over 2,000 people a few months ago after their acquisition by Verizon.
Buzzfeed announced that they were going to fall short on their revenue target by as much as 20%. They had projected revenues of $350, so this could be a $70 million miss.
Mashable, a property that was valued at $250 million last year, was reportedly about to be sold to Ziff Davis for $50 million.
Fusion Media Group (which is owned by Univision, and owns The Onlon and Gawker) is reportedly up for sale.
In all cases, the obvious problem is advertising revenue. The Goobook duopoly essentially owns the online advertising business. Everybody else is just a footnote. Below is a chart from The Wall Street Journal.
SOLVING A MYSTERY
One of the strange things about TV is that while viewing of live TV continues to erode, prices for TV advertising continue to rise. On the surface this would seem to be contradictory. But some recent research done by Ebiquity and Gain Theory in the UK might help explain this.
In this article in Mediatel, the claim is made that in the UK while advertisers spend about 54% of their advertising dollars on TV ads, TV is responsible for 71% of all ad-generated profit. In other words, TV remains by far their most effective profit generating medium.
HAPPY THANKSGIVING
The newsletter will be taking next Sunday off because we are astoundingly lazy and a holiday is a great excuse to do nothing. So have a wonderful holiday and remember when you're making out your Christmas list, give the gift of anger.
