Just two years ago, the world was still thinking ad revenue. As Rebecca Buckman reports in the May 11, 2009 edition of FORBES, tech entrepreneur Glenn Kelman "got the cold shoulder from many Silicon Valley venture capitalists." That's because his model did not include earning revenues through advertising. A well-meaning soul even took him aside and essentially told him, buddy you gotta think ads.
That was then. Today, the smart money wants to see revenue coming in from just about anything but ads. Buckman quotes Palo Alto, California venture capital firm Allegis Capital representative Robert Ackerman as observing, "Nobody wants to hear about ad-supported models."
The implications of that are chilling for most of old media. Already we're seeing the collapse of ad-supported traditional media in the magazine category. PORTFOLIO just folded. And the future of many other Conde Nast glossies - which require plenty of ads to support - is very iffy. THE NEW YORK POST reports that July could tell the tale on that. July is when the books close on the September issue. That issue is the equivalent in publishing of retail's Black Friday. If there are too few ads there could be few issues remaining for the glossies.
So far things aren't looking too hot. THE NEW YORK POST provides these numbers on the decline of ads in individual publications:
- ARCHITECTURAL DIGEST - Down 49%
- WIRED - Down 50%
- VANITY FAIR - Down 37% [will there be the gala Oscar party in 2010?]
- VOGUE - Down 31%.
Do those with decision-making power in old media have the courage and strength to change? Or will they allow their once thriving empires to become the GMs of media?