Happy New Year Is A Wish, And Not A Guarantee

January may not, officially, be the cruellest month, but it could turn out that way for the media business. It is only as the mince pies turn to fat that it will become clear whether another year of crisis looms — once the first weeks of advertising bookings and CD sales come through, and once the Christmas DVD and console sales have been counted.

Only then will it become clear whether the gloom of the past six weeks can be dissipated —- or whether it is time for another downturn, which nicely follows on almost immediately from the previous one. Those under 35 who aspire to finish their careers in the media might want to think about another profession if the doommongers view turns out to be correct.

The misery from outside, reflected in the wretched share prices of every media asset you can buy a bit of, is ironically, far removed from the current situation. Broadcasters and newspapers are reporting the best trading for more than two years — even The Times, which has endured many years of losses, has recently become profitable. Television may have had a wretched year with all the phone-in scandals, but still 12.7million watched the X-Factor final on ITV, 6.5 million people voted, and all of Wales is outraged, rightly, that Rhydian did not win. Naturally, with 2,400 complaints from people who could not get through, an Ofcom inquiry looms. And, say what you like about music, but the right act, with the right promotion, can still break through (think Leona Lewis).

It would be easy to go on, and yet, for the moment none of it matters. Worries about a housing price crash may be a staple for a page lead in the Daily Mail (certainly thats what Private Eye would have you believe), but when its parent company gave the faintest hint of a slowdown in property advertising, outsiders assumed the worst. Nor are thin wallets good for entertainment companies, particularly as the pressure on the consumer is worldwide. DVD sales have already stopped growing; this Christmass wave of iPod-buying will lead to another terrible January. Last year, CD volumes were down by a fifth in the first few weeks of the year, in the critical US market — that figure remained broadly the same throughout the rest of 2007, although Radiohead persisted in demanding at least £3million out of EMI as if nothing much had changed.

None of this means it is the right time to despair. Sony might cut the price of the PlayStation3 at some time after Christmas so that people can actually afford it (the over-engineered device is way too expensive for Sony to make as well), and more to the point there are opportunities for good ideas to come through. ITV, say, has a real opportunity to re-invent itself in January, with a new schedule at a time when Channel 4 has to muddle along without Celebrity Big Brother. And there will continue to be surprises: watch out for Jagex, the privately held Cambridge computer games company behind RuneScape, which has quietly built up six million subscribers in its simple-to-use answer to the outrageously profitable World of Warcraft. Mind you, if the advertising and entertainment markets turn south next year, it might be worth joining the dwarfs as a way of getting away from it all.

So, Channel 4 is fined £500,000 for operating “staggered selection” in a Deal or No Deal phone-in, a method in which later calls had a slightly smaller chance of winning. Interestingly, for two months, Channel 4s bosses, Andy Duncan and all, knew there might be problem with the technique, but in a display of “Nobody knows what they are doing” didnt do anything about it. Why? Because neither Channel 4s bosses, its lawyers, nor crucially the hapless regulator, ICSTIS, was sure it was illegitimate. If people cant work out that it is wrong when some callers have less of a chance of winning than others, it is not surprising that there were so many phone-in scandals.

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