Optimism is AWOL at media biz confab
EmptyMedia and entertainment insiders struck somber notes Tuesday, predicting an extended U.S. economic downturn and growing challenges to the advertising market.
"We expect this to be a long and deep recession," one that is more drawn-out than generally seen since World War II, Merrill Lynch's Jessica Reif Cohen said at the second annual Media and Money conference organized by Dow Jones and the Nielsen Co., parent of The Hollywood Reporter.
After several quarters of weakening trends in local advertising markets, national advertising is also in danger, she said. "We've definitely started to see national get hit now," said Reif Cohen, Merrill's managing director and entertainment industry analyst.
Fellow panelist Wenda Harris Millard, co-CEO of Martha Stewart Living Omnimedia, also noted "a lot of unrest" among consumers and marketers and last-minute ad buying in recent months.
John Squires, executive vp at Time Inc., argued that consumers will continue to buy magazines in an economic slump, but overall the media environment will be under pressure.
In a keynote interview, Scott Sperling, co-president of the private equity group Thomas H. Lee Partners, discussed his limited appetite for mergers and acquisitions right now.
He said his team has long factored in a recession, but "the depth of the advertising recession is greater than we projected," he said.
Thomas H. Lee's portfolio includes Nielsen, Univision, Clear Channel and Warner Music Group.
Sperling said he sees no appealing buyout targets in media and entertainment, arguing that prices are still too high — despite battered stocks — given the credit crunch, the recession and a reduced growth outlook.
Digital media and emerging markets were mentioned as markets that should weather the downturn better than the rest.
David Eun, vp content partnerships at Google and YouTube,suggested that "places like YouTube may find they are beneficiaries" of tough times. He cited the video site's focus on being measurable and performance-oriented. (partialdiff)