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.