Wall Street isn't so far from Madison Avenue or Hollywood Blvd. and the upheaval in the financial markets will have aftershocks reaching far into the media industry.
It's sure to effect the already-suffering advertising industry as well as the film financing markets. But how bad will it be, and who will emerge on top? The near term impact is unlikely to be too bad, but over the next six months or so, it could start taking a real toll.
The advertising industry is already in a lull. Now Lehman Brothersand Merrill Lynch will no longer be buying ads, and it's too soon to say what will happen with AIG'sAd Spend. The good news is that Lehman's ad spending slowed to just half a million dollars in the first half of the year, and Merrill isn't an enormous advertiser either, spending just $37 million in 2007. So their absence won't be too painful. But Bank of America IS a big player, spending $407 million in 2007 up from $237 in 2006 (according to TNS) and by buying Merrill it may end up spending even more.
The bad news for the advertising industry: the economy crisis could depress advertising budgets across the board, causing marketers to withdraw from already-weak sectors like newspapers. Now advertisers will be even more focused on their return on investment. So we can expect Internet ads, which have a quantifiable return, to continue to be the fastest-growing part of the business.