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Pay-TV broadcasters such as BSkyB and business-to-business magazines will weather the downturn well while the cost cutting measures of advertiser-funded newspapers, radio and TV networks may not be enough to ensure survival, according to a new report by Ernst & Young.

In the downturn of 1991, quality newspapers proportionally increased their prices by more than the red-top sector but still managed to perform better in terms of circulation, the company added.

Ernst & Young believes that 2009 will see a similar trend with all quality daily papers forecast to increase cover prices by at least 10%.

"The threat of readers moving to free titles, or online, will limit populars' [red top papers'] ability to increase prices with some titles going the opposite direction to maintain circulation," the report said.

Ernst & Young argued that for those businesses seriously affected by both cyclical and structural challenges "cutting costs may not suffice". The answer, says the report, lies in re-inventing media business models to deliver services in a "different and cheaper way".

The downturn will also hit online display and online classified advertising, although growth in digital search ad spend will mostly offset this, the company said.

The report, published today and called Media & Entertainment … By Numbers, concludes that the advertiser-funded commercial television and radio sectors are "highly exposed", while the newspaper industry is "performing worse than in previous recessions".

However, cable and pay-TV services and business-to-business publishers will be the "best recessionary performers" thanks to a relatively lower exposure to advertising and large subscriber bases. Large media buying agencies and the market research industry are also expected to weather the downturn better, according to Ernst & Young.

Ernst & Young said the "multiplier effect" of the additional structural challenges facing advertising-reliant media companies, such as the flow of consumers to the internet, is pushing some business models to breaking point.

"These trends were not as prevalent in previous recessions and will be amplified in the current downturn," said Michael Rudberg, the head of media and entertainment at Ernst & Young.

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