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10 Industries Facing Extinction

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DEATH WATCH
DailyFeed
Because we're in a morbid mood today, let's review some industries in danger of extinction courtesy of Entrepreneur magazine.  Here's a list of businesses that Entrepreneur suggested all the way back in 2007 may in their death throes:

Record stores: Record stores are closing in, well, record numbers. One of the most prominent music retailers, Tower Records, shut down all 89 stores last year after concluding it couldn’t withstand the onslaught of online music stores and chains like Wal-Mart, which can offer lower prices and sell other items to offset the smaller number of CDs being sold.
Odds of survival in 10 years: Great, if you consider Wal-Mart a record store.

Camera film manufacturing: This probably isn’t the best business to get into right now. According to the Chicago Tribune, from May 2006 to May 2007, the volume of prints made from digital cameras grew by 34 percent. Film camera sales, meanwhile, fell by 49 percent, while digital cameras sales continued to grow—by 5 percent. Of American internet users, 70 percent own a digital camera; another survey shows that 70 percent of Canadians now use a digital camera.
Odds of survival in 10 years: Some entrepreneurs who specialize in making camera film for amateur photographers could possibly make a living.

Crop dusters: They’ll be around in 10 years, but likely not in their present form. The average age of the typical crop duster is 60, the number of crop dusters is dwindling, and the profession can be dangerous. Just several weeks ago, an Arkansas crop dusting company was ordered to stop flying in Iowa after spraying farm workers with a fungicide; 36 farm hands in a cornfield had to be decontaminated by a hazardous materials crew.
Odds of survival in 10 years: The type of crop dusting plane that chased after Cary Grant in North by Northwest will have almost certainly gone south. Farmers say that they’ll always need crop dusters, even though new technologies have made them less important than in the past. But commercial airlines are increasingly taking business away from the small, independent crop dusters.

Gay bars: As the Orlando Sentinel noted in a recent article, around the country gay bars have been going out of business as gay men and women have been gaining greater acceptance in society. What used to be a hangout for people who felt unwelcome elsewhere is becoming less necessary.
Odds of survival in 10 years: As with many industries, the very best of them will endure; the rest won’t.

Newspapers: Some people thought they were through when radio and TV news came about. Even after the fax machine revolutionized offices, some people predicted that everyone would have their news faxed in, since that would be quicker than relying on a newspaper. But the numbers have been falling precipitously since the 1990s when the internet came on the scene. In the past year, the Audit Bureau of Circulations twice has posted drops averaging 2.1 and 2.8 percent over six-month periods. Newsrooms across the country have been hemorrhaging staff.
Odds of survival in 10 years: They won’t disappear; they’ll be on the internet. We don’t recommend startups investing a lot of money into a printing press plant.

Pay phones: In 1997, there were more than 2 million pay phones in the US; now there are approximately half as many. There are probably always going to be certain places like airports and hotels that offer pay phones, as long as there are people who don’t own or can’t afford cell phones. Because phone kiosks on the streets are a favorite for drug dealers, who don’t want to have their own numbers tapped and tracked, cities are shedding them.
Odds of survival in 10 years: They’ll be around, but won’t be anything to call home about.

Used bookstores: They’ve been closing fast, and those that are still open are relying on what’s making them obsolete: the internet. A used bookstore used to be the place to find that beloved, out-of-print children’s book you used to read 17 times a day until your little sister flushed it down the toilet. Now you just type that title in a search engine and order it within minutes.
Odds of survival in 10 years: Some of them will still be eking out an existence, but the handwriting is on the wall.

Piggy banks: You may chuckle, but as we continue gravitating toward a paperless society, it’s not difficult to imagine a day when piggy banks no longer exist.
Odds of survival in 10 years: Sure, they’ll probably still be a few around—in antique shops.

Telemarketing: The good news for people who hate telemarketing calls is that the industry may finally be dying; the bad news is that it may take a while. Telemarketing has been hit hard by the national Do-Not-Call list that was established five years ago, and sales have been stagnant, but the industry still managed to bring in $393 billion in revenue last year. Some of this is due to clever marketing. This includes holding raffles at shopping malls; when you sign your information, you agree to accept calls from the company running the contest and its partners. Cell phones are exempt from automated telemarketing calls, but not from individuals calling. Then there are occasional windows of opportunity: The national Do-Not-Call list is set to expire in 2008, unless you remember to register again.
Odds of survival in 10 years: They’ll be here. Humbled, more impotent, but probably still here.

Coin-operated arcades: With Nintendo Wii, casual gaming online and the Xbox 360, the video game arcade industry is thriving, but not the standalone brick-and-mortar arcades. For those of you who thought arcades were already dead, they still exist—at movie theaters, miniature golf courses and other touristy spots—but it seems only a matter of time before they vanish from the landscape. Ten years ago, there were 10,000 arcades in the nation, and now the number is close to 3,000, according to the American Amusement Machine Association. Revenue from arcade game units brought in $866 million last year, which sounds good until you consider that in 1994, the industry was pocketing $2.3 billion and that the profits are only still high because it costs so much to play a game.
Odds of survival in 10 years: Game over.
That was four years ago, and the predictions weren't bad. More recently Huffington Post put together another list of endangered US industries in the ever-annoying but lucrative slideshow format. It has a few duplicates, of course (some industries die slow), but observes that some industries are not so much facing extinction as upheaval. Some of the questionable entries include video production services, where a digital overhaul of the field has rendered a lot of pros' expensive gear worthless and made it much easier for amateurs and prosumers to get into the game.

To be sure, as HuffPo notes, 43 percent of the field has gone out of business in less than a decade. But at the same time, the digital video editing revolution makes it much easier for newcomers to jump into the editing business, and there's no reason cheaper tools and better finished products can't mean a larger industry, although perhaps one saturated by freelancers since it's getting easier to make pro-quality video every year.

Also on HuffPo's list is manufactured housing, which has been hit particularly hard by the housing crash. (Foreclosed houses are now so cheap that if you want a house, you can probably afford a real one somewhere.) But that's clearly an industry at a cyclical low point, and it could very well recover with the rest of the market.

Other industries on the list, like DVD, game and video rental, simply have been upended by new technology and business models. Thriving upstart Netflix and several copycat game rental services, as well as Apple and Amazon with their streaming rental services, would argue with the premise that there's no money in it anymore. Older players like Blockbuster might be staggering, but there's no reason to think rental is going away.

As far as industries that aren't on either list, it's easy to imagine technology making more and more skills unnecessary. Court reporters and other fields that use shorthand and specialized machines to record transcripts of the spoken word in real time could be threatened by improving speech-to-text software. Even interpreters one day could see much of their work taken over by computers.

Other industries could be upended by possibly foreseeable government intervention in problems they cause. Certain types of commercial fishing, for example, would be threatened by new global rules against overfishing that many are urging. (Of course, proponents would argue those fishing outfits are about to fish themselves out of business anyway.) Some energy companies are sure to get the short end of the stick in a new carbon regulatory scheme as well. Some types of freelance workers, like self-styled search-engine optimization and social media experts, may find themselves in far lower demand once people at large realize what they do is hokum with little expertise involved.

Some argue that copy editors will give way to better auto-proofreading software, Wiki-style corrections from readers and a general online culture of linguistic lassitude. If the War on Drugs continues to lose steam and some drug decriminalization takes hold, many public workers who make a living fighting those drugs could be shed. (Although given the union contracts that protect them, they'd likely just be reassigned.) It will be surprising if business-to-business publishing doesn't fade away into websites and email newsletters.

Of course, new technology also creates a bunch of new opportunities that could outweigh these losses. But in a lot of cases the new jobs being created require advanced skills, and the losers in dying industries might need some government help to get the training they need to participate in the new economy.

Feel free to leave your own analysis of industries on the brink in the comments or email them to dailyfeed@minyanville.com and we'll post a roundup of the best ones if they're worthwhile.
POSITION:  No positions in stocks mentioned.

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