Predictions 2010: Media
The big headline for the music industry this year wasn't a new business model, but that the concert business still reigns supreme as the most profitable outlet for artists, Note the proposed merger of Live Nation and Ticketmaster, which leaked out in February.
The combined company would be vertically integrated and powerful, which is why the merger is under review by antitrust regulators. The two companies will likely have to divest some of their overlapping divisions to get approval. Live Nation said in November it expects the deal to close in the first quarter of 2010.
7.The publishing industry will continue to suffer and will shift more online.
The newspaper industry continues to suffer. Ad revenue at US newspapers fell by nearly 28 percent in the third quarter, continuing a brutal slide. Average daily circulation for 379 daily newspapers was down 10.6 percent in the second and third quarter compared to a year ago.
Earlier this year, the century-old "Christian Science Monitor" stopped publishing a physical paper and switched to a web only model. Major daily news papers in major cities—Denver's "Rocky Mountain News" and the "Seattle Post-Intelligencer"—folded.
8. Social networks will start translating their members into advertising dollars.
Facebook has slowly but surely proven that it has a business model that works. Its annual revenue is estimated at more than $500 million, which may not be on the scale of its massive audience, but the company is cash-flow positive and growing.
The social media break out this year was Twitter, which went from niche to mainstream, as celebs like Ashton Kutcher and Oprah made 140-character messages compelling. Twitter hasn't prioritized profitability; it's been focused on growing its customer base and developing its applications. The company has talked about the potential in ads on Twitter and products to help companies communicate with their customers and gauge consumer sentiment, we're sure to see some revenue come from these businesses next year.
9.Video games and Hollywood will become more intertwined.
The twowere already pretty intertwined and I don't think they've become any more so. Video games suffered a decline this year as consumers watched their wallets. Music video games in particular saw a big slide in the first half of the year.
It was simply too easy to download new songs and there was little impetus to buy a new game. But there were some big new game releases. "Call of Duty: Modern Warfare 2", for example, generated more in sales in its first day than any movie ever has.
There are a handful of big video game titles that are being turned into movies for 2010 release, including "Prince of Persia: The Sands of Time" from Disney's Buena Vista label and "Resident Evil: Afterlife," from Sony's Screen Gems. If those films are hits we could see those two mega entertainment industries come closer together.