Thursday, January 15, 2009

How will the economy affect genealogy?

I was asked this question three times while I was in Salt Lake City - "how do you think genealogy will be affected by a downturn in the economy?"

My response was basically "it really depends on the situation - is it a full depression, a long recession, a mild recession? Deflation or inflation?" Each of those will affect consumers, institutions and businesses in different ways.

The considerations as I see them:

* Genealogy businesses, like commercial software (Legacy, RootsMagic, TMG, etc.), database companies (e.g., TGN, WVR, Footnote, GenealogyBank, FindMyPast, etc.) and publications (e.g. Everton's GenHelper, Family Tree Magazine, etc.), may suffer a reduction in new and current customers, which will reduce income and slow or eliminate technology improvements and content acquisition. A company with a positive balance sheet throughout should survive, but a company with a negative balance sheet may need more investment, may be acquired or may close completely. With high inflation, prices may be raised for database and magazine subscriptions.

* Genealogy institutions, like the Family History Library, NEHGS, Allen County Public Library, etc. may see a reduction in fly-in patrons, but may see more drive-in patrons. Staff and hours may be reduced if institution income declines significantly.

* Government offices, like the National Archives, State Archives and local or regional libraries, may reduce hours, eliminate services and/or raise prices in response to budget reductions caused by the economy and government decisions.

* Genealogy societies may see a reduction in memberships, especially if a recession is long and/or deep, resulting in high unemployment. If there is a period of high inflation, members on fixed incomes may be squeezed. Large societies that sponsor seminars and conferences may see fewer fly-in customers and more drive-in customers. Societies may be able to reduce costs by publishing newsletters online rather than mailing.

* Individual genealogists may take fewer fly-out trips to conferences, vacations or research excursions if unemployment rises higher or prices rise significantly. However, genealogists may make more trips to local or semi-local repositories. The price of gas will be important here.

If a recession is long, or the country suffers a depression with deflation, then the genealogy industry is going to suffer because credit will be tight and unemployment will be high.

If the economy has a high inflation rate, then older genealogists living on a fixed income will really suffer due to higher prices and stagnant income. The result will be fewer long trips and vacations, fewer books and magazines purchased, fewer software and database purchases, and perhaps more visits to close repositories along with more use of the Internet (assuming it is not priced much higher).

Nobody has a crystal ball about the current and future economy, or the impact on a group of people. My hope is that the recession is short and the country has a short recovery to steady growth (I'm an optimist!). Obviously, the tax, spending and monetary policies of the new administration will affect the economy, and by extension the genealogy industry.

I am not an economist, just a concerned investor and old guy. I posted this in order to define my thoughts and concerns.

It's an interesting question, and I want to ask your opinion too. Please comment if you care to.

UPDATE 1/16: I edited the original text a bit. Leland Meitzler posted a summary of his persaonal view here.


Bill West said...

I think it will have an effect on the sites such as TGN's.Folks will have to make a tough decision on which sites they can afford.

I am also sure that public libraries are going to be among the local government services to be slashed which will have an effect on folks who use them for their research.The staff and hours most likely will be cut.

Mark Tucker said...

Since November, I have already heard about layoffs at 2 genealogy companies in Utah.

Jennifer said...

I personally have already dropped a few society memberships, and have waited on ordering both records and books. In ordinary times, I would take these as acceptable expenses, but with a one-income household dependent upon construction... well, I'm keeping the checkbook buried in the office, and the credit card is on ice for now.