(Note: I’m going to link to the Financial Times three times in this post. You’re allowed two views a month at FT.com before being forced to register. If you’re conserving, I suggest you read the second two FT links.)
The Financial Times’ John Gapper gave my book a bad review because he refused to go along with its organizing premise and principal: that our economy and society are undergoing fundamental shifts as we move past the industrial age and that Google is a worthy totem to use to understand that change. Gapper instead treated the premise with surprising literalness (for a Brit) and decreed that Google is not a good example for business; Apple is.
I got some insight into Gapper’s worldview in a good piece he wrote last week on the death of Bertelsmann mogul Reinhard Mohn and, with him, the media moguls of his generation. Gapper does acknowledge fundamental change but he still explains it in the old, expired terms of the old economy, in terms of control.
The challenge of the internet is that it blows up the control of distribution, ensuring that all content owners – from Rupert Murdoch to the lowliest blogger – compete on equal terms. Moguls can no longer exploit its scarcity by buying television spectrum or by owning printing presses.
That is why media moguls have been pushed on to the defensive by a new breed of technology moguls such as Steve Jobs of Apple and Sergey Brin and Larry Page, co-founders of Google. Control of distribution has passed to people who make the software through which content passes.
He’s half right. Control of distribution was how the old moguls prevailed. But that is not replaced, one-to-one, with new control of distribution. The internet makes us all distributors. That is why you want to be open and part of the conversation so the people formerly known as the audience distribute you.
Google is not a distributor. Indeed, its greatest misstep to date, the book settlement, came in part because it uncharacteristically was going to control and distribute content (that it didn’t own). Google doesn’t distribute. It organizes. It links. Google is not in the software business. It is in the platform business (advertising being its primary platform). Apple, too, isn’t in the software business. It’s in the hardware business and that is what gives it control of distribution: we, the cult, buy its great products and take Apple’s control as the price. That, I realized, is why Gapper admires it, because it still has control, like the old media moguls. He defines and measures value in their old media terms.
Gapper is hardly alone. I’m using him as a convenient totem for media’s insistence on viewing the world through old media lenses. Both media and the world around it have changed in many more ways that I tried to outline in WWGD? That’s what I wrote in this post the other day about media’s blind spots to the realities of the new-media economy:
…the imperatives of the link economy, the need and benefit of giving up control, the advantages of creating open platforms over closed systems, the value of networks, the post-scarcity economy and the art of exploiting abundance, the need to be searchable to be found, the deflation innovation brings, the value of free, the triumph of process over product….
Now here’s the bigger question: How does this willful worldview affect the business analysis performed by business journalists? Gapper’s boss, FT editor Lionel Barber, predicted that “almost all” news organizations will charge for content within a year. That was in July. The clock’s ticking. I snarked at the time that if this same analysis were applied to GM, Barber would predict that the car company would simply raise its prices just because its cars cost more to make. There are no simple solutions to such fundamental change. Every industry has to remake itself under the new realities of the new economy. That is the story business media should be covering. But if media people refuse to – if, like the moguls Gapper eulogizes, they insist on holding onto their old ways – how good will they be at analyzing and predicting the future?
That speaks to the key recommendation in the good Luke Johnson FT column Gapper quotes in his Mohn piece. Johnson argues that lamenting change in media is futile and that media companies need to hire the digital natives who understand the new age.
The only answer is to hire as many bright young things as you can afford and hope their dynamism will counteract the inevitable conservatism of an existing institution. The media trade could learn from the technology industry, which is subject to wrenching structural upheaval at regular intervals.
Right. And Johnson also says that’s why the legacy companies are the least likely to see and build for the new world.
Unfortunately, a chief executive only a few years from retirement is hardly motivated to sack loyal colleagues to bring on board lots of teenagers to turn their company upside down. Psychologically, we are congenitally opposed to tearing down what we have helped create in order to build anew. Hence the status quo prevails, even if it is the demoralising task of managing decline with no salvation in sight. And so all efforts are applied to preservation in spite of a realisation that the economic model is broken – because no one is forcing the company in a new direction.
Right again. On this week’s On the Media, Ava Seave, coauthor of The Curse of the Mogul, told Bob Garfield that the media businesses that media reporters love to cover are and long have been bad businesses. But we don’t hear that – because, one assumes, they don’t want to hear that.
So how well equipped are reporters in legacy media companies to analyze the upheaval in the industries they cover? Where are their bright young things who see the world in new ways? Who is the Google of financial reporting?
: Later: Gapper responds.
