Gawker media owner Nick Denton, whose statements and actions get disproportionate coverage on fellow blogs because we are all friends with his employees, released a media manifesto this morning. The nutgraf is here:
From conglomerates to internet ventures, executives should be planning now on a decline of up to 40% in advertising spending during this cycle. Instead they're sleepwalking into economic extinction — even those lean online ventures which were supposed to take up the mantle and preserve New York's position as a media capital.
Denton's new-media intuition has proven prescient in the past (the success of his empire, and his spinning off of valuable properties — and perfunctory elimination of unsuccessful ones — at key moments, are testament), so people will probably listen to his dire forecast. He predicts steeper declines in Internet advertising and the ad industry as a whole than other forecasters have seen. And soon enough, he says, it's going to be survival of the quickest, not the fittest.
Denton advised six strategies for Internet media companies: Get out of categories such as politics, to which advertisers are averse (and abandon the noble cause of "public interest" for a while), renegotiate vendor contracts, consolidate titles, use offshore labor and development, create variable compensation (reducing base pay for all highly paid executives in exchange for a share in a profit-share pool, creating four-day workweeks), and give more value to marketers with more space and options.
Denton dismisses media conglomerates as incapable of these changes, which is true in a way — Time Inc. can't very well fold Time, even though political coverage isn't juicy for advertisers, just as they can't just summarily fire half of their 10,000-person workforce. But it's also true that companies like Condé Nast and Time Inc. have been consolidating titles with surprising speed and nimbleness, and increasing marketing value with cross-title offerings in the process. Sure, big companies will never be able to do this with the speed of smaller, more flexible ones, and yes, their steps will always be too little, too late, because of shareholder obligations. Still, salvation is not impossible.
Denton admits to a little bit of fearmongering here ("My motives are indeed not entirely pure"), which sounds right to us. Obviously, the economy's effects are going to be worse than analysts predict at the moment, based on old models. But if we worked at Gawker, we'd be worried that this essay was just laying the groundwork to excuse the reduction of work hours for writers and the future lowering of base compensation for sales and marketing teams. (Denton confirms this to us today but says profit-sharing is aimed to help soften cuts.) And if we were readers (which we are), we'd prepare to cope with less content across his blogs in the coming months.
Nick Denton's Forecast of Media Doom [Gawker]