A new media investment adds weight to the idea that an old medium’s extinction is rapidly approaching. Gannett has managed to get a majority stake in CareerBuilder, the online job hunting site. The media company, struggling with its print and broadcast media operations, bought an extra 10 percent of the Web operation from Tribune, giving it a 50.8 percent ownership (Tribune still has 30.8 percent, while McClatchy has 14.4 and Microsoft has 4 percent).
Up and Down
Gannett paid $135 million for the extra stake — a figure somewhat surprising to see that it even has in its coffers. The company just announced the cut of a full 1,000 jobs at its U.S. newspapers a few weeks ago (Gannett-owned USA Today won’t be affected). Gannett’s overall revenues were down more than 12 percent in July, and it’s a trend we’ve been seeing month after month. Though no official announcement has been made, I can also tell you that the company has been slowly cutting staff at its TV stations over the past several months as well, with two entire departments being eliminated at all of its local stations and other individual employees being laid off bit by bit at the properties.
Analyzing the Change
The Inquisitr’s Duncan Riley has written much about the inevitable eventual fall of broadcast television, and Gannett’s story sure seems to support his theory. The ownership group has recently thrown a lot money into online investments — this one, plus recent transactions with companies such as ShopLocal, Cozi, and Mogulus — and has concurrently slashed its traditional media spending. Combined with the ongoing revenue drops, it certainly gives the impression that Gannett is trying to move its assets away from the suffering traditional forms of media and into the areas that are actually growing.
Another trend you’ll notice is Gannett stations heavily promoting a new concept branded as the “Information Center,” which is basically just the idea of their local Web site combined with the broadcast news. It’s really the same stuff with a new name and new promotional push. Ironically enough, most of the stations are operating with far fewer people, so while the Web sites have a slightly updated look, their resources are not as robust as one might be led to believe. In actuality, most modern mainstream journalists just do double duty, splitting their time between broadcast and online work. Still, the notion highlights the industry’s attempt to at least outwardly rebrand itself away from its long-standing primary interest.
The major networks are showing the same trends, too: There’s news this week that NBC will offer some of its fall series premieres on the Web before they ever air on TV, indicating a sharp change in the “broadcast first” priority of the past — and with some of the networks’ biggest assets, too. The Internet is slowly becoming the top priority all around, as broadcast fades further back.
Survival of the Smartest
Television ads simply aren’t selling like they used to. Right now, we’re in the midst of a massively high-profile election season — the time when ad revenue should be skyrocketing. Gannett, however, lost just over 5 percent in TV ad income in July, even with the political boost. Things just aren’t adding up.
Ultimately, Gannett’s reallocation of its cash may demonstrate the traditional media company’s best hope for survival — but in general, broadcast stations’ reluctance to invest in people is what continues to hold them back. It’s great to put money into growing Web properties, but you also have to devote people to building them. Having one person do three jobs simply doesn’t result in the same quality of work as having dedicated employees with expertise in each area, and viewers are smart enough to see the difference. If these companies are to succeed in transitioning into the world of new media, their standard bare bones and spreading-out-thin approaches and will have to be reconsidered.
The end of broadcast television, as Duncan predicts, may be in the cards. Based on companies’ resource allocation patterns, as illustrated with this week’s news from Gannett and NBC, one wonders if the industry is knowingly preparing for the same evolution — and whether that evolution will involve TV properties shutting their doors sooner than we expect.