Where Is Old Media’s Perfect Storm Survival Plan?

Maybe now that Federal Communications Commission Chairman Julius Genachowski has acknowledged traditional  media is adrift in “a perfect storm,” the industry will seriously begin crafting a survival plan.

”Broadcasters today are confronted with a difficult economy, a plummeting advertising market, and rapid technological change buffeting traditional business plans,” he told the National Association of Black Owned Broadcasters conference  in Washington Sept. 25

Unfortunately Genachowski’s economy-related remarks didn’t go far enough and were overshadowed by proposal earlier last week for broad new rules prohibiting all Internet providers from selectively blocking or slowing Internet traffic.

Such weighty distractions and overwhelming uncertainty are reasons why there still is no road map for how “old” media gets to be “new” media while enduring  the worst economic crisis in a generation. It’s not going to get any easier if they wait.

While the general economy has tanked, consumer and advertiser spending continues to shift from “old” platforms such as  network and stations television and newspapers to “new” media platforms including the Internet and mobile devices. At the same time, more cost-efficient digital technology is supplanting legacy processes and infrastructure. The result is the “perfect storm” Genachowski referred  to that has conventional media in a financial tailspin.

Media giants, Nielsen Co. and even the FCC are exploring the creation of more accurate and accountable user metrics (which dictate value) now that digital consumers can be authenticated and we no longer have to guess who is sitting in front of TV screens or reading newspapers. While ubiquitous broadband makes content widely available, it leaves creators fumbling for ways to be paid for their work. Advertisers who now can connect with individual target consumers are rethinking the value of a mass audience – or what’s left of it.

While technology-empowered consumers become accustomed to get what they want, when they want it, morning newspapers continue to be delivered to home doorsteps and television networks continue to launch new prime time programs  by weekly appointment. It makes media an anomaly as the digital transformation rolls on.

While old habits die hard, the newspaper and television businesses are slowly dying. A close examination of any media conglomerate’s  balance sheet reveals  alarming declines in old-line television and publishing related revenues and profits, reflecting much more than a recessionary wallop. Wall Street analyst forecasts call for negligible gains and continued market share loss to the Internet and interactive platforms.

Although there is no going back, it is unclear how traditional media will move forward in a way that preserves and pays for its core competencies. Newspapers and television have lost their journalism ethos to unfettered bloggers and citizen reporters on the wild Web. The fixed print ad and 30-second TV spot have morphed  into online display ads and interactive text links and buttons.

How to measure, what to charge, how to monetize? That’s the rub.

As the economy begins to rebound, and consumer and advertiser spending continue shifting traditional to digital, the permanent financial damage will become more apparent. New digital revenues will continue to fall short of  traditional revenues losses. Legacy  infrastructure —  from physical printing presses and TV stations to formulas for pricing newspapers and TV advertising – has become an albatross.

This year’s endless stream of industry conference panels and speakers, as well as a Web’s worth of pontificating, generally have rehashed the dilemmas and raised more questions than answers. No one, not even the FCC, has inkling of how traditional media saves itself.  And that’s the biggest problem of all.