Disney decline at forefront
By PHYLLIS FURMAN
Sep 10 2002 6:42AM GMT
Sept. 11 continues to haunt Michael Eisner.
Just a month ago, the embattled Disney chief shocked investors when he told them that bookings for Disney's theme parks are down 10%.
The reason: jittery foreign travelers, fearful of another attack, continue to stay away from Disney World and Disneyland.
For the troubled media mogul, it was another piece of bad news. Disney's already sinking stock took another pounding, and the announcement set off renewed speculation that Eisner's days at Disney are numbered.
Among its media peers, Disney has been the most affected by last year's terrorist attacks, since its theme parks contribute about a quarter of its total sales.
But on top of that, since Sept. 11, advertisers have pulled back further from Disney's already troubled ABC Television network. "Disney took a double hit," said Credit Lyonnais media analyst Richard Read.
Disney may have faltered the most, but it's certainly not alone. From plummeting media stock prices, to shrunken magazines and newspapers, to the stark decline of the world's biggest media empire AOL Time Warner, the scars of Sept. 11 are evident across the media landscape as it suffers through the industry's worst recession in history. And there are few signs of recovery.
"9-11 accelerated a decline in the ad market which we certainly have yet to recover from," said Dan Brewster, president of Bertelsmann-owned magazine publisher Gruner + Jahr, which shuttered one title, "Homestyle." "We've all been forced to focus on costs and downsize our staffs."
"Sept. 11 was the tipping point for a lot of things that were already brewing," said Michael Wolf, who heads McKinsey's global media practice. "It gave advertisers an excuse to pull back."
The pullback has been harsh, with ad spending falling 6.5% last year as advertisers not only fretted about the economy but also questioned the wisdom of pushing their products to a shaken population. This year, ad growth is expected to be flat.
Joe Mandese, editor of trade newsletter Media Buyers Daily, estimates that $500 million to $1 billion was lost just in the days after the attacks, as broadcast and cable networks went commercial free and advertisers pulled their ads.
While some sectors, such as network television and radio, have rebounded strongly in recent months, a true advertising turnaround isn't expected for another year.
Among the media segments worst hit by Sept. 11 have been magazines and national newspapers because of their dependence on financial and travel advertisers, two groups that have significantly cut back.
"The country's top 10 newspapers are still in the toilet," Mandese said. "The Wall Street Journal has been particularly hit because of its dependence on financial advertising."
But Sept. 11 also spurred shifts in habits that have lifted some media companies, while hurting others. A year later, viewers continue to flock to 24-hour-news channels Fox News Channel and CNN, but have lost their appetite for business news networks like CNBC.
CNN president of sales Larry Goodman said the advertisers who fled the network after the attacks have come back. "This year is a somewhat better year," Goodman said. "The outlook is better, the psychology is better. We're back in positive territory."
Media execs are hoping that mood lasts. Media mogul Rupert Murdoch said that in recent weeks, he's seen "significant improvements" in ad sales for his News Corp. empire.
But Kaufman Brothers media analyst Paul Kim remains skeptical of any rebound. "Things are stabilizing, but the likelihood of a turnaround is very small."
By PHYLLIS FURMAN
Sep 10 2002 6:42AM GMT
Sept. 11 continues to haunt Michael Eisner.
Just a month ago, the embattled Disney chief shocked investors when he told them that bookings for Disney's theme parks are down 10%.
The reason: jittery foreign travelers, fearful of another attack, continue to stay away from Disney World and Disneyland.
For the troubled media mogul, it was another piece of bad news. Disney's already sinking stock took another pounding, and the announcement set off renewed speculation that Eisner's days at Disney are numbered.
Among its media peers, Disney has been the most affected by last year's terrorist attacks, since its theme parks contribute about a quarter of its total sales.
But on top of that, since Sept. 11, advertisers have pulled back further from Disney's already troubled ABC Television network. "Disney took a double hit," said Credit Lyonnais media analyst Richard Read.
Disney may have faltered the most, but it's certainly not alone. From plummeting media stock prices, to shrunken magazines and newspapers, to the stark decline of the world's biggest media empire AOL Time Warner, the scars of Sept. 11 are evident across the media landscape as it suffers through the industry's worst recession in history. And there are few signs of recovery.
"9-11 accelerated a decline in the ad market which we certainly have yet to recover from," said Dan Brewster, president of Bertelsmann-owned magazine publisher Gruner + Jahr, which shuttered one title, "Homestyle." "We've all been forced to focus on costs and downsize our staffs."
"Sept. 11 was the tipping point for a lot of things that were already brewing," said Michael Wolf, who heads McKinsey's global media practice. "It gave advertisers an excuse to pull back."
The pullback has been harsh, with ad spending falling 6.5% last year as advertisers not only fretted about the economy but also questioned the wisdom of pushing their products to a shaken population. This year, ad growth is expected to be flat.
Joe Mandese, editor of trade newsletter Media Buyers Daily, estimates that $500 million to $1 billion was lost just in the days after the attacks, as broadcast and cable networks went commercial free and advertisers pulled their ads.
While some sectors, such as network television and radio, have rebounded strongly in recent months, a true advertising turnaround isn't expected for another year.
Among the media segments worst hit by Sept. 11 have been magazines and national newspapers because of their dependence on financial and travel advertisers, two groups that have significantly cut back.
"The country's top 10 newspapers are still in the toilet," Mandese said. "The Wall Street Journal has been particularly hit because of its dependence on financial advertising."
But Sept. 11 also spurred shifts in habits that have lifted some media companies, while hurting others. A year later, viewers continue to flock to 24-hour-news channels Fox News Channel and CNN, but have lost their appetite for business news networks like CNBC.
CNN president of sales Larry Goodman said the advertisers who fled the network after the attacks have come back. "This year is a somewhat better year," Goodman said. "The outlook is better, the psychology is better. We're back in positive territory."
Media execs are hoping that mood lasts. Media mogul Rupert Murdoch said that in recent weeks, he's seen "significant improvements" in ad sales for his News Corp. empire.
But Kaufman Brothers media analyst Paul Kim remains skeptical of any rebound. "Things are stabilizing, but the likelihood of a turnaround is very small."
