If the recession cast a heavy pall over last week’s UBS Global Media and Communications Conference in New York, it also cleared out some of the usual hot air that tends to fill the ballrooms of the Grand Hyatt during the annual confab.
Instead, amid news of plunging ad forecasts, auto companies begging for a bailout and debt-laden Tribune Co. filing for bankruptcy, executives from the major media companies offered honest talk about the grim realities before them and how they planned to navigate the rough terrain ahead.
“People complain about lack of visibility,” said WPP CEO Martin Sorrell of the uncertain outlook. “It is really just that we don’t like what we see...It’s more hell than heaven.”
Welcome to the new New Media age, where digital is no longer the miracle elixir that will transform sluggish old-liners into Googlesque gold mines.
“I don’t think we’ll be able to call digital a big growth engine,” said NBC Universal President and CEO Jeff Zucker. “We have to be honest about that.”
Time Warner President and CEO Jeff Bewkes echoed that sentiment, saying he was disappointed by the ad pullback affecting AOL’s sales and that he was working hard to figure out whether the company might be better off as part of another Internet player.
As Zucker said in a keynote that kicked off his own company’s efforts to rethink the broadcast-network model, the times called for him and his counterparts to make “steel stomach” decisions.
But while Zucker talked of changing the dynamics of network TV and Disney CFO Thomas Staggs admitted the business he worries about most is his own company’s broadcast network, ABC, CBS Corp. CEO Leslie Moonves played the network-TV cheerleader.
Providing some welcome relief from the drumbeat of negative news, Moonves trumpeted that his “old fuddy-duddy network” was now No. 1 in the 18-49 demo and had the first freshman No. 1 show since Desperate Housewives, with The Mentalist.
But even the sunny Mr. Moonves couldn’t deny things were generally gloomy. “If scatter pricing was normal, we’d be having a phenomenal year, but it’s not,” he said. “Autos, retail and financials are three of our most important categories and we need them to recover soon.”
All of which leads one to wonder: Can content still be king if there’s no one to buy it?
And after presentations from all of the big media players, many were wondering why News Corp. was a no-show. The company had been tentatively slated for Wednesday but was replaced by a presentation from WWE. Although a News Corp. spokesperson said scheduling issues prevented senior executives from participating, one could understand if they just didn’t want to join the pity party. Or as one attendee quipped, “Perhaps they just don’t want to be crucified.”
Still, some at the conference appeared to be in the market for a deal. A research associate at an investment firm said she was there to identify good companies that were simply having a hard time because of the economy. Wireless firms were on the wish list, but she was just window-shopping, of course.
Private equity players showed up Monday for a closed meeting in which they allegedly discussed what great bargains media stocks are right now: News Corp. at $9 and CBS at $8. No matter the price, the bears are still in charge.
One new breed of participant showed up at the UBS conference this year: The plucky, business-card-toting job seeker who dogged every employed panelist with a “Hi, I just got laid off and I’m looking for a job.”
If the confab crystallized anything beyond the conventional wisdom that it’s going to get worse before it gets better, it was the idea that radical change is happening at a time when everyone seems to be in a state of suspended animation while they wait—hope!—auto advertisers come back to life.
In that regard, Disney’s Staggs offered a suggestion for improving the auto-market outlook: “If all of you could buy a new car, that would help.”