The media is facing a ‘profound structural revolution’

These were the words of Maurice Levy (pictured), chief executive and chairman of Publicis Groupe, one of the world’s biggest ad agencies. He was speaking to a glum audience of magazine types at the FIPP 2009 World Magazine Congress in London.

He also said, "Who can believe, honestly, that young people, who we call the digital natives, are going to ditch their computers, their iPods, their mobile phones, and go back to print?"

Well, nobody, which is why print is desperately trying to move its operations to the web. Unfortunately, they cannot find ways to charge for their content online. Oh, there were plenty of marginal or just plain bad ideas about how this might be attempted at FIPP. But don’t sweat it. because charging consumers for magazine and newspaper-style editorial content is over.

All that is required is for online advertising revenues to match cover-price and print advertising revenues, and the publishers can sail on into the future pretty much as-is. because, the web, it’s like a magazine but on a screen, right?

Unfortunately, again, this is never going to happen. Online advertising revenues are going to fall so far south of where they need to be, for most of these companies, that the most likely outcome is severe contraction or annihilation.

The magazine people are right about one thing. Content is king. And they are traditionally very strong at creating content. In order to build editorial brands online, you need content. However, content is expensive. And readers are fickle.

Readers will come read your lovely content, you’ll enjoy a rise in traffic, and then the readers will fuck off to whoever else is giving away great content today. The retention you get is not worth the expense of the content. Even those web editorial properties that are so good that they retain loyal readers will struggle, because they cannot match advertising revenues against costs.

In the past – in the relatively recent past – the retention was worth the expense. Investing in content was the road to growth. But now there is way more content available, and much of it costs almost nothing to produce. When the likes of IGN and Gamespot were being birthed, there was no Facebook, Google News, N4G, VG247, Digg, YouTube, Twitter, MySpace. There were no blogs. There were no podcasts.

Those were the days when companies with good sense were investing in online content. Those days are gone. Investing in content now, is mostly an uphill battle to protect against audience or market-share contraction.

If you were to launch a solid, decent online editorial property today, it would be extremely difficult for your editorial investment to bring in any ROI in advertising revenue. The money you need to spend on content will never attract enough of an audience which will never attract enough advertising revenue.

Most good, new online properties today are about user-content, or pulling someone else’s content, or is extremely cheap to produce, or is a personal blog.

Oh, and by the way, all this is happening against a backdrop of plunging marketing interest in interruptive display advertising – anywhere. Not just in print and on TV, but even online. Marketers want something new.

There are revenue alternatives for the old guard. As Levy says, "Each company, each title, each media will have to find its own model." But these alternatives are theoretical, or they just haven’t been dreamed up yet.

We are talking here about companies that have completely failed to provide a single brand worth dick in the Internet age. None of the big magazine or newspaper groups have launched a single web property that was something other than an online version of their print products. Levy wanted to know how this could be…the magazine people looked at their shoes.

Content is king. But the king is avaricious and cruel.

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