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Predictions: 9 For '09 In Media

Media faces a perfect storm in 2009—transitioning to a challenging new digital world and a very weak economy. Media giants will continue to move from traditional content distribution models to anytime, anywhere, content-on demand. While building new digital revenue streams they face a dramatic pullback in consumer spending, which means advertising threatens to fall off a cliff. Can entertainment prove recession resistant?

Here are my nine predictions for 2009:

1.The media landscape faces mega shifts.

The media conglomerates are on the brink of serious change. GeneralElectric , CNBC's parent company, says it's interested in purchasing media assets. News Corp points to its "war chest" of cash, hinting at the opportunities its five billion dollars could afford. Meanwhile CBS and Viacom Chairman Sumner Redstone is struggling with mounting debt which could very well force him to sell all or part of CBS.

2.Movie studios will focus and streamline to ride out the financial downturn.

Movies have traditionally been recession proof, but this time around the theatrical experience is competing with piracy and the comfort and ease of watching DVDs at home. Add the fact that movie studios' overhead is massive, and these giants will only feel more pressure to invest in sure bets like sequels and comic book franchises. Expect film financing from Wall Street to dry up, a void overseas investors will rush to fill. But because financing will be much tighter, there won't be the glut of independent films we've seen in recent years. Which means the independent films that do get made, are likely to perform better.

AP

3. Movie theaters will pull out the stops to keep you buying tickets.

Movie theaters are bearing the weight of higher ticket and concession prices, while home theaters just get better and better. What's the solution? Digital 3-D: it can't be pirated or recreated at home, and remarkably, consumers are willing to pay more for it. Digital 3-D technology will hit a tipping point in 2009. At least a dozen major 3-D films are slated to hit the thousands of new digital 3-D theaters scheduled to be implemented. This technology will become so pervasive that studios like DreamWorks Animation will release exclusively in 3-D in 2009.

4. TV networks will fight to maintain their dominance.

The 30-second spot is still considered the best way to reach a mass audience. But broadcast TV networks are going to have a tough fight ahead. Sure, Americans will always watch television, in fact, they'll probably watch even more in this economic environment as people hunker down at home. But that doesn't mean ad prices will go up—slower consumer spending means TV networks face declining revenues. With DVR technology marketers will have no choice but diversify beyond the 30-second spot to subtle and unskippable product placement and show sponsorship. And the broadcast nets will find viewers continue to flip past the four major channels to the increasingly high-quality niche programming in cable.

5. You'll treat the internet like another TV set.

Hulu.com (co-owned by NBC Universal and News Corp) is offering more professional content—all free and ad-supported. It's a go-to destination for everything from clips from Saturday Night Live to full-length shows from NBC and Fox. With YouTube rushing to catch up with Hulu's library of content from the TV networks and movie studios, consumers are going to have more free, on-demand entertainment choices than ever before. Forget about homemade videos of sleeping cats and skateboarding bulldogs. Your web browser will increasingly become your next on-demand TV set.

6. The music industry will find a new model, with concert tours and megastars at its core.

While CD sales continue to decline and online downloads and subscriptions fail to fill that gap, musicians and the industry behind them will focus more on a model with concerts at the core. Both Ticketmaster Entertainment and Live Nation have merged ticketing and talent management, setting the stage for high-stakes competition between the two companies: they'll wield exclusive talent deals as leverage to score venues and tour dates. Musicians' revenue streams—from album sales to concert tickets to merchandise—will be run as verticals by these two giants. And consumers may benefit from more competition in the arena of ticket sales, or at very least, clearer pricing.

7.The publishing industry will continue to suffer and will shift more online.

It's been a long hard road for newspaper and magazine publishers: advertising drying up and marketers shifting their dollars online. With the economy tanking, it's only going to get worse. Expect more publications to fold in 2009 as the dramatic drop in the likes of auto ads takes a real toll. There will be more consolidation as papers get snapped up at bargain-basement prices, and I wouldn't be surprised if more companies are taken private, as Sam Zell did with the Tribune Co. The solution will be online revenues, and parent companies will push to innovate and closely target ads to keep online ad dollars growing.

8. Social networks will start translating their members into advertising dollars

Social networks have yet to truly monetize their millions of loyal users, Facebook even saying its not focused on profitability. But expect the social networking giant to change its tune and give advertisers a new seat at the table. Facebook and News Corp's MySpace will continue to experiment and innovate on unobtrusive ways to reach users. These social networking giants face a careful balance. They must convince advertisers that they offer efficient, effective and targeted advertising. Yet they must avoid alienating users by mixing their personal information with marketing messages.

9.Video games and Hollywood will become more intertwined.

Video games are still a hot commodity despite the economic downturn—a growth opportunity media conglomerates are seizing. Viacom will continue to invest in its video game division which is responsible for the hugely successful "Rock Band" franchise. And Disneywill continue to develop its media properties into video games. Meanwhile video game makers are sure to take more of their sophisticated story lines to the big screen, shopping video game concepts to studios. As television becomes more interactive and video games become more cinematic, the line between the two is blurring.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.