Insult to Injury

…is how the recession feels to many in media. The industry was hard hit even when the U.S. economy was booming, barely scraping together enough ads to keep the lights on, so the current collapse is a serious kick when we’re already down.

A telling sign: in trying to devise a forecast for media in 2009, I went out in search of the full range of experts, but there was no diversity in their views. The most bullish and bearish of analysts agreed that there’s aways to fall. Read the story here.

One interesting trend that emerged in those interviews is what Paul Krugman calls depression economics: there’s a moment (a tipping point, to borrow another economist’s phrase) on the way down where all the basic structures atrophy and what used to be prudent policy suddenly becomes dangerously stupid. ex: In boom times, saving is good, but in depression economics you want everyone to spend above their income to jumpstart growth.

In media, the conventional wisdom is that moving towards an advertising-based revenue structure from a subscription-based revenue structure represents progress. On the web, advertising is the only viable revenue structure, since consumers have demonstrated again and again that they aren’t willing to pay for content. But even in print, the explosion of media and the expansion of media companies happened when they were able to bring their newstand cost down to a mass-accessible price, and cover their own production costs through advertising. So this is longstanding conventional wisdom. In depression economics, however, when everyone else is so hard hit they stop buying ads, it’s the entities with subscription streams that do best. Fuddy-duddies like The Discovery Channel are apparently poised to make the big gains while big names like Disney will lose out.

It’s a compelling example of why we need more experimentation around media business models–the best practice is far from set in stone.