I've previously blogged that recession is traditionally a good time for the entertainment industry, but there is a problem with this thesis - namely that most content is now advertising driven and advertising is going to be badly hit. However, the relative impact will be less than in other industries such as pubs and restaurants, retail, property and, inevitably, financial services.
But, the markets have been vicious with public Internet TV companies this year; these are the year highs and the current market prices of various stocks on the US markets:
On2 1.56 - .25
Akamai 40.38 - 13.93
Limelight 13.49 - 2.19
Onstream 1.55 - 0.30
Narrowstep 0.54 - 0.02
Kit 1.15 - 0.22
There seems little relationship between the business fundamentals of these stocks and their share values. Certainly, confidence is a factor, but the message is clear. The public markets are no place for anyone involved in Internet TV.
For traditional TV the news is even worse. In the UK, OFCOM reckons that £100 - 250m is going to leave the UK production industry in the coming year. In an industry where around £4.5bn is spent on programming this is significant but not terminal. However, as this continues year on year as more and more channels appear, the result on the landscape of the UK TV industry is going to be profound (and other markets around the world will actually be more susceptible due to the dominance of PBS in the UK).
So, is the TV industry going to contract? Probably not. The advertising industry is increasingly looking for new vehicles with which to build brands and this is where the future growth of TV is likely to come from.
Over the past fifty years brands have paid the way of TV, but with little accountability. Now, it's time for the 'Google effect' (i.e. the accountability of advertising spend) to start having an impact on TV.
Broadcasters' obsession with volume, as opposed to quality, of audience will hurt them badly if they do not change their ways. Brave production companies should be building for this eventuality in an age where the ubiquity of television changes the rules - and a recession accelerates the change.