My perspective on most issues is biased from forty years in the communications business, with twenty of those years being focused on investor relations issues, and all but ten years involved in my own entrepreneurial communications firms (the company I co-founded in 2000 has consistently been ranked among the nation’s fastest growing for each of the past several years).  Over the course of this career, I have seen the communications business change in major ways.  But right now, the industry is in the midst of a truly fundamental revolution.  The investment community clearly recognizes that there has been a major change in the business and also accepts that more change is on the horizon.  But is that view robust enough?

Some of the fundamental changes that are occurring in communications may be obscure to the investor.  Below, I offer just four of them with some comments on how each may translate into stock market consequences.

1.  Journalism Is Dying Along With Newspapers.

When you pick-up a newspaper and you see a reporter’s byline, you know the reporter has some credentials to have earned being hired in the first place.  You know that what they wrote was edited both as to proper style and credibility.  The reporting might have some political tinge, but you know it is basically accurate.  In essence, the publisher gives an imprimatur to the reporters.

But newspapers are collapsing one-by-one and if they aren’t shutting down they are down-sizing dramatically.  So where will that imprimatur come from in the future when newspapers are less visible and exert less influence?  What will that mean in a world of increasing political turmoil, with massive strikes and economy-inspired protests?  How will rumors and falsehoods that can dramatically impact the market be corrected and contained?

Investors should consider how the decline of journalism may be relevant to the future of the market, especially during a time of hyper-volatility as characterizes the world today.

2.  As Journalism Is Dying, Neo-Journalism Is Growing At A Dramatic Rate.

There is a dramatic increase in the number of neo-journalists who are grabbing space on the Internet in many forms to opine, “report” and assert whatever they want 24/7/365.  Their “facts” are not always true and their agendas may be hidden, but that doesn’t necessarily mitigate the size of their audience.  They can communicate globally with virtually no start-up costs via blogs, and social media such as Twitter and Facebook.

I know my own firm can build communities of thousands of supporters for consumer products within a very brief period of time; neo-journalists can similarly build, coalesce and mobilize large communities of people with shared beliefs — quickly.  Investors might want to consider how that can exert an impact on the ways things get done in both the business and political arenas, and thereby how that can change the underlying dynamics that drive the market.

3.  Content Is More Important Than Distribution Channel.

I’ve been engaged in this business long enough to know one thing:  content is king.  Compelling presentation is important, as is selection of the right distribution channel, but if the audience doesn’t immediately sense value in the content they are seeing, they will move on to the next site.  That means a provider of high quality content can virtually come from nowhere to capture the attention of an audience and dethrone an industry leader.  Bloomberg versus Dow Jones is an early example.  More recently, the simple graphic presentation of Google is more than trumped by the value of the content it provides, and because of that, Google changed the way people use the Internet.

It makes sense therefore for investors to consider which entrenched leaders might not be as entrenched as once thought, especially when smaller, hungrier, more innovative and more aggressive competitors develop new ways of providing high value content.

4.  Messages Are Changing From Consumer-Driven To Advocacy-Driven.

Here are two critical questions:  1) When the consumer has no money or when their wallets are closed because of a reluctance to spend, what happens to advertising messages?  2) When a new administration moves into the White House, with control of the Hill, strong support from the electorate, and an outstanding communications infrastructure to speak to his constituency to support his agenda, what happens to advertising messages?  The answer to both questions:  the message changes from “buy” to “support” – from consumer-driven to advocacy-driven.

It may not be immediately identifiable, but if you are sensitive to it, you will clearly see the trend.  Have you ever seen so much advertising about the energy smart grid and other public issues?  Notice how IBM is running spots about how mathematics can help save the world?  Have you read the PNC bank ad that boasts “we believe a more vibrant economy tomorrow depends on taking the long view regarding the decisions we make today.”  Who’s selling what?  It’s simple: when the consumer is inert, advertisers don’t spend as much trying to convince them to buy their product, and when the government is at an activist zenith, industries and corporations confront a mission critical need to defend their status quo and/or promote those actions that would benefit their business.

Up until the current economic crisis, since the post WW II expansion, messages that hit the typical American were urging them to buy, resulting in a society where some 70 percent of the economy was based on consumer activity.  There will most certainly be a cultural change if the messaging shift from consumer to advocacy issues grows in frequency and continues over time.  Investors might want to consider whether their assumptions for an economic “recovery” include a restoration of such a vigorous consumer – and if it does, is that realistic even with an improved economy?  Or, will the disposition of the public change as the messages that reach them change?  Will the mantra of “buy; buy new; buy bigger; buy more tech; buy even if you don’t have the money to afford it” ever come back in vogue, and if so how long will it take?  Investors might want to assume a longer and less than total “recovery.”

But most important for investors to understand is that the communications industry isn’t making some modest shifts in processes, but undergoing a true revolution of its fundamentals.  That is going to have major cultural and economic consequences – and that means there will be market consequences as well.