Microsoft (Nasdaq:MSFT) CEO Steve Ballmer talked with editors at the Washington Post recently on a number of topics, including the future of Internet advertising and content, technology, media, Google's move toward the mobile-phone market and Yahoo. I want to focus on his ideas concerning where content is headed in the future, and advertising along with it.
When asked about the future of media, Ballmer responded, saying that he believes in about a 10-year period, there will no longer be newspapers or magazines available in a physical format. Everything will be digital by that time, he says.
He added that the projection within 10 years could be either long or short, but overall he feels in the not too distant future this will become a reality.
While the trend will continue to grow that way, I'm not sure the overall premise will be accurate.
The reason why is it has to be taken into account how people will consume media and content as they grow older. Will people aged 45 today want to consume media the same way as they do when they're 55? Will their lifestyles be more sedentary, and spend a lot more time at home, making other means of entertainment desirable?
Another question concerns magazines, which while many are decreasing in circulation, a number still launch successfully, and some are growing in circulation, seeming to imply there's some staying power there.
One other thing that needs to be considered is the cost of fuel, and how that will impact things over the next 20 years or so. Again, that could change lifestyles to be more centered around homes and local areas, which could impact the way media is consumed. I'm thinking in terms of being much less on the go here, and people spending more time at home.
Ballmer's overall assertion will be true, but there will probably be a small number of survivors in newspapers and magazines, while the majority fall by the wayside.
Monetization
Concerning monetization and which format it'll take, Ballmer thinks it'll largely be ad-based, although there will definitely be some exceptions to that.
Rupert Murdoch recently said something similar, as all the commodity news on the Internet will be offered for free, but there will always be a demand for content that goes beyond the usual fare. That's where fees, sponsorships and supscriptions will come in.
Even with the annoyance of ads, which Ballmer says is true with his digital content consumption, he said he would still rather watch them, than pay for the content.
Figures show that while the overall advertising space has slowed down, especially in the usual large mortgage, personal finance and auto sectors, it continues to grow strongly on the Web.
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