Stephen Roach, chairman of Morgan Stanley’s Asian arm says the US economy is headed towards recession – and Asia should be concerned.
“What is interesting, and potentially disturbing, is that the rest of the world doesn’t seem to think this is a big deal any more. There is a view that that the world is somehow decoupled from the American growth engine. I think that view will turn out to be dead wrong, and this is a global event with consequences for Asia and Australia,” he said.
Roach said the US was the world’s biggest consumer economy at US$9.5 trillion, compared to China at US$1 trillion and India at US$650 billion.
He said the key issue for economies outside the US was to determine how much internal demand of their own did they have to offset any shortfall from US consumers.
“My conclusion is: not nearly as much as you would like.” He said growth in Asia was vigorous but was export-led, and the end game of the Asian growth machine was directed at US consumers.
The new consumers in China and India would not be able to offset falls in US consumption.
The Federal Reserve is widely expected to cut interest rates again this week.
Free and Uneasy by the New York Times describes the uneasy year in the life of Jeffrey Deskovic after he was exonerated for a crime that put him behind bars for 16 years.
The Globe and Mail’s Ian Brown shares the pain and joy of bringing up a severely handicapped child:
“I hurry after him. For all this nightly nightmare — eight years of desperate worry and illness and chronic sleep deprivation, the havoc he has caused in our lives, threatening our marriage and our finances and our sanity — I long for the moment when he lets his crazy formless body fall asleep against me. For a short while, I feel like a regular little boy’s father. Sometimes I think this is his gift to me — but parcelled out, to show me how rare and valuable the gift is. Walker, my teacher, my sweet, sweet, lost and broken boy.”
In the Washington Post Magazine’s Pearls before breakfast, a world-renowned violinist busks as a social experiment playing complex classical pieces on his Stradivarius. Will anyone notice?
The predictions for 2008 are starting to come in.
China’s online advertising market is projected to exceed 10 billion yuan (US$1.3 billion) in 2007, a 114.6 per cent rise over last year, according to Nielsen.
Online advertising revenues touched 870 million yuan, expanding the market size to 7.5 billion yuan in the first 10 months and is expected to accelerate in the coming months as the 2008 Beijing Olympics nears.
China’s online advertising is said to have grown “higher than that of broadcasting advertising and magazine advertising.”
- Sina, Netease, QQ, and Sohu, China’s four largest Internet portals, were big gainers with their total advertising incomes exceeding US$100 million for the first time in the third quarter of the year.
- Entertainment and fast consumable products makers overtook financial and property firms as the largest spenders on web advertising.
- Apart from brand logo advertising and pay-per-click search engine, new ways being explored are video ads, game ads and blog ads, among others.
– US online ad spend in 2007 is expected to reach US$20 billion, up 26 per cent in the first three quarters, according to an Interactive Advertising Bureau (IAB) report.
In an earlier prediction (Aug, 2005), WPP’s Martin Sorrell told the Times, that China China will overtake all advertising markets save the US within three years.
He said the rise of the Chinese market reflects the “two-paced”nature of the advertising industry, with slower growth in mature markets and rapid expansion in the Far East, Central Europe and Latin America. At the time, China was ranked the sixth, after the US, Japan, Britain, Germany and France.
On the news front, Followmedia.com’s Philip Stone sums it up:
“The basic view for the newspaper industry in 2008 (as given at UBS Media week presentations Tuesday) is that newspaper print advertising revenue will continue to fall, that newspaper internet revenue will continue to climb, that combined the total revenue will still continue to decrease, and the only real question is by how much?
“Even the Newspaper Association of America (NAA), the trade group for US newspapers, admitted in its presentation that 2008 will continue to be a down print year. It conservatively forecasted that total US newspaper revenues would drop 1.2% next year, but it got to that figure by estimating that print revenues would fall by 2.9% while digital revenues would increase by 22% giving the net effect of down 1.2%.
“Trouble with that, of course, is that based on what has happened so far this year, and the NAA’s own outlook for the economy for next year, that print down of just 2.9% does not really seem to be in the ball park, let alone off a bit.”
Stone cited Belo’s chairman Robert W. Deckherd who stated that although TV revs were up (2.2%) for the first nine months of 2007, news revs were down 9%. But the two divisions did have one thing in common – very strong and increasing digital revenues.
“At television the Internet revenues were up 40% over a year before and now represent 3.5% of television’s total revenue compared to the 2.6% a year before. And at the newspaper division, Internet revenue was up 21% over the year before and made up 8.9% of total newspaper revenue through the nine months compared to 6.6% for last year. And digital seems to be on a roll making up 9.4% of Q3 revenue.”
“And what’s driving digital? Deckherd said that in the first nine months of 2006, there were 145,000 video streaming requests versus 2.2 million video requests for the same period this year.”
Other woes for 2008: Even assuming no recession, consumers will continue to be challenged by housing, the credit crunch and energy prices which will translate to poorer ad numbers.
Gannett, McClatchy and Washington Post all reported a poor 2007, with some hope in broadcast revs from the 2008 elections. The Post has gone so far as to re-define itself as an education company first rather than a media company, due to its higher revs from its Kaplan unit.
MultimediaShooter points out two multimedia packages that combines data with visuals, audio and text.
1. “Exonerated, Freed, and What Happened Then”
The New York Times interviews 137 prisoners of 200 exonerated by DNA evidence since 1989 and compiles a mix of very compelling audio interviews, stats and traditional narrative.
2. The Minneapolis Star Tribune’s 13 seconds in August package on the 35W bridge collapse is a “living document” with details on 76 of the 84 vehicles involved, their occupants and interviews with victims.
An European Interactive Advertising Association (EIAA) survey of 7,008 people from Belgium, France, Germany, UK, Spain, Italy, the Netherlands and the Scandinavian nations reconfirms the exodus.
Almost 2/3 of Internet users in Europe prefer online media to traditional media. In particular, 62% of the respondents prefer logging on to the web, terming it as a key information source.
Sixty-five percent visit news web pages at least once a month, whereas 28% admits that they read newspapers less and less.
Forty percent claimed they have stopped switching on their TV sets as much as they used to, while 22% said they do not listen to the radio.
Logging on to the Internet to listen to radio programmes or watch television ranks on the top ten of the most popular online activities among the Europeans, with 31% of the respondents listening to radio online and 30% watching online television and videos.
The European Interactive Advertising Association has predicted that more and more will swift away from TV to Internet.
On the US front, a new In-Stat survey predicts that more than 16 million US households may be using their broadband service more than they use their TV sets within the next three years.
The fight between traditional TV broadcasters and ISPs is already on.
“Today’s stable and profitable subscription TV services are facing new competition from online and mobile entertainment services, and from new high-quality packaged goods such as HD-DVD and Blu-ray discs,” said In-Stat analyst Gerry Kaufhold.
“The very nature of ‘entertainment’ is undergoing a profound change in which the ability to instantly share content with friends, family and those connected on social networks or buddy lists is creating micro-user communities that replace traditional entertainment sources such as TV programmes.
“As more high-quality content becomes available online, savvy consumers are considering ways to reduce their monthly bills by getting everything from the Internet.”
In-Stat’s survey revealed that up to 30 per cent of respondents would drop subscription services and use the Internet for TV.
Some 42 per cent of respondents indicated that they are not getting enough international news and information from their current TV delivery services, even though there are hundreds of channels available.
The respondents to the survey had a broadband connection, a TV set, and were 18 years of age or older.
Some specs: Holds about 200 ebooks,no cables, no synching, 292 gm, 6-inch E-Ink screen, no backlight, EVDO connectivity for wireless downloads (over Sprint in the US), 30 hours of battery life with a full recharge taking just 120 minutes. Can email your Word documents and pictures to Kindle for viewing. Price: US$399.
88,000 compatible Amazon ebooks on sale at the Kindle Store at US$9.99 for bestsellers and as low as US$1.99 for classics, while newspapers and blogs will be available via subscription. See Newsweek story.
The three sites aggregate other community sites, set a platform for diverse voices to be heard, and become greater than the sum of its parts.
She warns however that news organizations need to be wary of thinking they can draw a community under their fold and brand without renumeration:
“Remember, though, there is no free lunch. News organizations that think citizens will freely contribute to their citizen journalism pages need to think again.
“While citizen journalism may well be a new form of volunteerism – something baby boomers do when the finish coaching their kids’ baseball teams – it’s a fragile dynamic.
“There must be a high degree of equilibrium, a balance between the giving and the getting, in these initiatives. Money is not the only motivator. People contribute for a reason – either because of a personal passion, to effect change, to learn something, or even to get smarter about technology.
“Be clever in juicing that equilibrium. If you have to pay the high school that uploads the most robust content on your hyperlocal sports site, like the Orlando Sentinel does, consider it an investment in your info-structure.
“Use your Big-J journalists where they can really add value. Professional journalists should focus their expertise and skills on doing investigations, identifying trends, building databases, holding public officials accountable and articulating the master narratives in their communities.
“Ultimately, the marketplace will decide what is news. News will be whatever adds value in a noisy information landscape, whatever helps people get their jobs done, whatever imparts wisdom, and whatever elicits gratitude.
“To figure this out you also need some new players in your info-structure. They include:
1.“Can do-ers” instead of those who whine about what they can’t do.
2.Computer programmers who will be the architects of searchable databases or news games in your info-structure.
3.Collaborators, people who have the sensibility to see the possibilities of working together instead of moving into kneejerk competitor mode.
4.News analysts who will trawl incoming information looking for Big-J opportunities. Minnesota Public Radio uses these para-journalists to analyze information coming in through its Public Insight Journalism network.
5.Tribe expanders. Journalism in the future will come from many places. We should contribute to the momentum of the best and most responsible efforts and recruit them for the info-structure.
For those who embrace these challenges, there is cause for a great deal of optimism.”
The credit squeeze has begun to slice off earlier projections, but Internet ad spending continues to rise.
eMarketer projects online ad spending to reach US$42 billion by 2011, more than doubling from the estimated US$21.4 billion this year.
Those numbers are slightly down from eMarketer’s previous estimates of US$21.7 billion in spending for 2007 and US$44 billion for 2011.
Under the revised projections, online ad spending for 2007 is expected to increase 26.7 percent from the US$16.9 billion spent last year.
By contrast, advertising spending on all media is only expected to increase 2.1 percent.
“Don’t expect any large growth in total media,” eMarketer’s David Hallerman told InternetNews.com. “The shift away from traditional media is accelerating.”
Hallerman cautions that percentage growth changes can be deceptive, as they are bound to taper off as an industry builds mass.
While “Internet’s total growth is going to be decelerating,” he said, the digital share of the advertising pie will continue to grow for the foreseeable future. Hallerman offered no predictions on how large that share will become down the road.
The study found that search advertising will remain the strongest of digital ad spending through 2011, holding steady around 40 percent. Spending on display ads also is projected to remain at around 20 percent, followed by online classified spending at about 17 percent.
The biggest proportional gainer will be rich media, driven by video ads, which is expected to jump from 8 percent this year to 13 percent in 2011.
Hallerman admitted that eMarketer’s estimates may be conservative in areas where businesses models are still developing, and said he expects to revise his projections in rapidly developing sectors like video.
“I think we’re going to see some of the largest growth in video ads on televisions stations’ Web sites,” he said.
When Times Online Editor Anne Spackman got the job last year, her teenage son retorted: “You? You don’t even know when to double click.”
Jemima Kiss reports on Spackman’s recent comments:
1.Google is the No 1 topic of conversation at News Corp.”One tiny tweak to their algorithm and we all have to re-calibrate our pages. And we can’t afford not to be brilliant on Google News.”
2.News International is hoping for closer integration of the Times website and its newspaper.
3.Smaller screens should be the focus for online news as the development of iPods and mobile speeds up.
4. Journalists now need commercial awareness. “Online demands at least an awareness of skills that were never part of the journalistic parameters,” she said. Knowing who the audience is and working out how to get the news to them used to be handled by marketing and distribution, and that’s a new kind of commercial awareness that journalists have never had to have before.
5. “We are all operating to a certain extent without a business model, and in a world like that you do take risks but with a really strong awareness of what commercial back up there is.”
6.Local news sites have an advantage over national properties because they have less competition. National sites end up competing with international sites.
7.The news industry will become more male. Online news demands a combination of editorial and technical skills that is, she said, more commonly seen in men. “I’ve recruited a lot in the past 12 months,” she said.
(NOTE: I don’t find this an issue in Asia. More women have the skills than ever before, and even if they don’t they’ll pick it up faster.)
Martin Slade reports on Spackman:
1. Google is now ‘hugely dangerous’. When Google tweaked its search algorithm last month, WashingtonPost.com was one of several major sites whose PageRank temporarily dropped. Google also controls a large amount of advertising online, particularly since its acquisition this year of online advertising firm DoubleClick.
2. Local newspapers would be the next to face the effects of the search giant as its Google Maps service transforms the market for local listings and advertising.
Joe Murphy points out reporters quickly lose faith in blogging, and video when the process isn’t in place to keep it going.
I would add that newsrooms have to wake up to the fact they are in the 21st century. Nothing works without constant validation and encouragement – especially for the millennial generation that thrives on instant gratification and feedback, without which they get easily bored.
Six ways to engage them:
Get online breaking news stories
Build photo galleries
Make interactive graphics
I would add:
1.Set up a clear process by which they can submit these and make sure it appears online fast.
2.Set up small project teams to build mini-sites of their own.
3.Get a blogging study circle going — where reporters who blog meet up and encourage each other — and set up meet-the-blogger sessions with readers.
Murphy suggests the Denver Post’s finger puppets as a great idea in the vein of encouraging a new kind of interaction with readers.