NEW YORK (MainStreet) -- Industries usually provide a fair amount of warning before they head down the tubes.
It's rare that an entire segment of the marketplace goes down without someone at least yelling "timber," and recent collapses have been no exception. Retail booksellers were already getting squeezed into the bargain bin by
Kindle and other e-options before
closed its doors last year.
had already thinned the line at video store return counters by the time the
rolled credits and
As 2012 begins, there are a handful of industries that find themselves in similar positions. Whether they're imperiled by a host of online options, are playing chicken with a global financial crisis or just continuing a streak of bad luck, there are a handful of commercial mainstays out there that may not be serving their consumer base in the same fashion -- if at all -- by the time the year is over.
After taking a look at some of the indicators from 2011 and recapping our chats with industry analysts during that time, we've put together a list of industries that may be in for a struggle in 2012. From such essentials as cars and housing to more leisurely pursuits including video games and movies, there's going to be plenty of uncertainty to go around:
The one piece of new hardware released in 2011, the Nintendo 3DS handheld, got such a lukewarm reception and had so few sought-after
games that Nintendo dropped its price from $250 to $170 just a few months after its launch. Huge games such as
Batman: Arkham City
Elder Scrolls V: Skyrim
Call of Duty: Modern Warfare 3
were released this year, but NPD Group still expects year-to-date sales to be flat or down by as much as 3%.
It doesn't get easier from this point on.
The industry's struggling to find an identity at a point where it can least afford to do so.
Android products have cut the long-dominant Nintendo DS' share of the handheld game market from 70% in 2009 to 59% last year. This year, NPD Group says downloaded games for mobile devices represent just about half of all video game downloads, with 40% of all gamers with mobile devices saying they spend less on console games as a result.
That's not the greatest news for aging consoles or their producers.
dropped the price of its PlayStation 3 by $50 this summer and was already reeling from a hack of its PlayStation Network earlier in the year that exposed the personal information of millions of its members. Nintendo offered a sliver of hope at the Electronic Entertainment Expo this summer with the introduction of its high-definition Wii U console due to hit stores next year. Unfortunately, that made its already fading Wii console a lame duck for the remainder of 2011 and allowed
Xbox 360 to open up the largest lead in console sales since the Nintendo DS was the top-selling system in 2008.
While Sony tries to re-enter the handheld market with its Vita device and Nintendo's Wii U and its touchscreen controllers give the video game world its first new console in half a decade, neither represents a safe bet. In fact, the only growing segment of the traditional video game industry is the one that's driving the Xbox 360's success: downloadable content. According to Jesse Divnich, vice president of capital research and communications at video game market research firm Eedar, the percentage of HD console owners who buy songs, game maps and other downloadable content has risen from 34% in 2009 to 51% in this year. Eedar estimates that those downloads will add up to $875 million in North America by the end of the year and surpass $1 billion next year.
It's estimated that the 49% of people who don't buy downloadable content -- including 41% who are afraid of having what happened to PlayStation Network users' info happen to their own -- would generate another $600 million in revenue per year. Even if they don't, onlookers see these disconnected consumers as the key to increasing physical software sales.
"Many question the long-term viability of traditional physical media, but given the overwhelming anticipation for all the great AAA content in the pipeline, I believe the final results will indicate that there is still plenty of life and demand in the traditional physical media space," Divnich says.
It's not the cruise lines themselves that vacationers and industry experts are worried about. It's the destinations.
As of December, the most popular region for luxury cruise lines including
Royal Caribbean Cruises'
Azamara was Europe, according to CruiseCompete and Cayole.com's
report. Of the countries visited by those cruise lines, Greece ranked atop travelers' lists, with Italy and Spain nestled in the Top 10.
The debt crisis in each of those countries has rattled the European Union and forced austerity measures, confidence votes, spending inquiries and the resignation of Italian Prime Minister Silvio Berlusconi. The luxury liners are all too aware of the current political and economic climate and are trying to hedge by wooing as many passengers onto their cruises as possible.
"These guys have been a little more worried about stock market swings because they cater to people who are retired or close to retired, and what we see on those ships is that their prices have been coming down," CruiseCompete Chief Executive Bob Levinstein said in November. "I think there's a worry of worse economic times next year, so they're really pushing hard to get their ships filled for 2012."
If the worst does occur and Greece, Italy or Spain collapse and go off the euro next year, the luxury liners may still navigate their way through 2012. Luxury trips are booked an average of 220 days in advance, while prices for cruises can be set as much as 18 months ahead. That gives luxury cruise lines bookings well into next summer and an outlook into 2013.
That outlook includes some serious trepidation.
Chief Operating Officer Howard Frank admitted as much during a conference call last month when he mentioned that the company's Carnival, Princess and Holland America cruise lines were already seeing "less demand" and "softer pricing" for European destinations in 2012 amid economic uncertainty.
started easing its way out the door and a mess of superheroes including Thor, Captain America and the X-Men held the top spot at the box office this year. We even had a second honest-to-goodness
-style created-in-3D movie in Martin Scorcese's
None of it helped. The $10.6 billion total box office gross in 2010 was flat from 2009, while the number of tickets sold declined to 1.3 billion -- a low not seen since 1996. Last year was even worse, with the overall take down more than 4% from 2010's middling performance and the number of tickets bought plummeting to 1994-level attendance.
There are more than a few culprits to blame. The first is movie prices, which have jumped from an average of $5.65 in 2001 to nearly $8 in 2011, according to the National Association of Theater Owners. When you can have a cloud full of movies streamed to your living room via Netflix or Amazon for a whole month for the same price, it takes something pretty special to pry viewers and their families off the couch for a few hours of overpriced concessions, talking teens and texters searing their screens into your eyeballs.
Jack that price up to $18 for a 3-D film and the movie studios' margin for error disappears entirely. That's a shame, because the studios tried their best to shine up some real dog-run refuse with 3-D transfers this year. Disney thought the suckers would come in droves after it poured $150 million into
Mars Needs Moms
but took in only $21 million from underwhelmed audiences. Insults to intelligence such as
Glee: The 3D Concert Movie
Shark Night 3D
The Three Musketeers
bombed in similar fashion and only confirmed audiences' distrust of studios' use of the format, which is a shame for 3-D films including
and Stephen Spielberg and Peter Jackson's
that were actually worth seeing.
The good news for Hollywood is that there are more than a few films that could boost the box office back into
range in 2012. The
trilogy gets its first big-screen installment,
finally wraps up its whole shiny-skinned saga, Pixar releases
as its first original movie since
and Marvel finally gets to the point of its
films by releasing
. More importantly, Warner Brothers and D.C. Comics follow up 2008's billion-dollar blockbuster
The Dark Knight
with their final Batman epic (until they inevitably reboot the series),
The Dark Knight Rises.
The bad news? There are just as many sequels, prequels and spinoffs (27) on the slate for 2012 as there were for 2011. That's just fine when all five of the Top 5 movies of the year are sequels, as was the case in 2011 (
Transformers: Dark of the Moon
The Hangover II
Pirates of the Caribbean: On Stranger Tides
). Not so much, though, when that same "give 'em what they know" thinking results in more
-style 3-D rereleases. Audiences will be asked to sit through
Beauty and the Beast
Star Wars: Episode I -- The Phantom Menace
just as they did a decade or so ago -- only this time with uncomfortable glasses on their face and about $20 less in their wallets.
Studios may squeak by this year if they can squeeze a little more money out of each screening. If they don't figure out how to stop moviegoers from filing toward the exits in a steady stream, as they've done since peaking at 1.6 billion attendance in 2002, they're going to be reduced to content as old and unoriginal as that on any streaming service.
Japanese automakers in the U.S.
share of the U.S. auto market in 2009 was 17% and climbing, according to WardsAuto.com. It trailed only then-bankrupt
19.6% and seemed poised to take the overall U.S. sales lead.
An embarrassing series of recalls the next year changed all of that, but circumstances beyond any automakers' control compounded Toyota's woes and those of the Japanese auto industry it anchored. After last year's earthquake, tsunami and ensuing power crisis in Japan and flooding in Thailand, the nation's automakers found themselves short on supplies and focusing on survival. As a result, Toyota's market share dropped from 15% in post-recall 2010 to less than 13% in 2011, according to MotorIntelligence.
, meanwhile, saw its stake drop from nearly 10.5% at the end of 2010 to roughly 9% last year, while Subaru dropped from 2.3% to a flat 2%.
Unfortunately for the Japanese, this all occurred as American automakers stepped up their game and gained market share for the first time since 1988. WardsAuto.com puts
, GM and Chrysler's share of the U.S. market at 47.2%, up from 45.1% in 2010. It's not for lack of competition, either, as GM's new compact Chevrolet Cruze and subcombact Sonic, Ford's tiny Fiesta and revamped Fusion and Chrysler's re-released 200, Dodge Durango and Jeep Grand Cherokee all saw significant gains based largely on improved technology and efficiency.
They're not the only ones taking a big, unsympathetic bite of the Japanese carmakers' lunch. Korean automakers
made up a scant 4.4% of the market back in 2008. By the end of last year, Hyundai alone grabbed a 5.2% share behind improved products such as the Elantra and Sonata, new offerings including the Veloster and Genesis, low base prices and decade-long warranties. Kia's nearly 4% share now gives Hyundai/Kia more than 9% of the market and a presence on par with Honda's.
It's not all bad news for the Japanese automakers, though.
ability to crank out vehicles unaffected by Japan's disaster led to an 18% spike in Altima sales and an overall jump in market share from 7.8% in 2010 to roughly 8.2% in 2011. Toyota, meanwhile, has 11 revamped vehicles hitting lots this year -- including a tech-friendly Yaris to compete with the Sonic and Fiesta and a plug-in Prius to take on Chevy's Volt. Still, analysts say the Japanese automakers may not have the horsepower to regain their place of prominence.
"It becomes a sensitive issue when you are taking advantage of others during a tragedy, but the reality is, business is business," said Jesse Toprak, vice president of industry trends for TrueCar.com, earlier this year. "The Japanese will gain some share back in 2012, but not close to what they lost in 2011."
Forget about what happens if there's a double-dip recession. The housing market will be on edge even if it maintains the status quo.
Sales of newly built, single-family homes had three straight months of gains from September through December, while the surplus new housing has shriveled from a crisis-fueled 11.2-month's supply in 2008 to just six months' worth in November. The bad news is that the 315,000 new homes sold in November is still well off the 485,000 sold back in December 2008 and nowhere near the 1.1 million sold at the height of the boom in December 2006.
New housing starts rose 9.3% in November and are at their highest levels since 2008, and 30-year fixed mortgage rates have sunk to less that 4%, but that hasn't helped housing overcome its biggest obstacle: tightened lending restrictions.
"While the numbers are still quite low on a historic basis, this upward trend indicates that the market is slowly finding its footing and bodes well for the months ahead," says Bob Nielsen, chairman of the National Association of Home Builders. "Our concern is that overly restrictive lending conditions for both builders and buyers will constrain this growth and postpone the arrival of a recovery in housing and the overall economy."
There's ample reason for that concern, especially in the existing-home market. Existing-home sales are up 12.2% year-to-date, while supply is down 27%. That would be great if foreclosures and short sales didn't still make up nearly 30% of all home sold. It's not so great on the buyers' side either, where 33% of all home contracts failed as a result of declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price or other issues including lower loan limits, home inspections and employment losses. National unemployment is still hovering around 9%, lenders are still skittish and both homeowners and buyers aren't doing much to calm their fears.
Barring a remarkable economic turnaround, the housing market's slow recovery will maintain its sluggish pace as long as lenders remain defensively stingy with their loans. As long as Europe trembles and unemployment is nearly double what it was during the housing boom, U.S. housing and homebuilding will continue to sit on a shaky foundation.
"With consumer price inflation rising by more than 3% this year, consumers are looking to lock in steady payments by taking out long-term fixed-rate mortgages," says Moe Valessi, president of the National Association of Realtors. "However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today's market by the overly restrictive mortgage underwriting situation."
-- Written by Jason Notte in Boston.
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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.