Posts about Media

Mondo media

So two more mondo media deals are simmering: Reuters said it has had an offer; there’s speculation that Thomson is the suitor and even speculation about Google (but I don’t see them buying a content business). And Yahoo and Microsoft — whose media strategies have both tripped and stumbled in the race with Google — say they’re thinking about lashing up or possibly merging again.

Now’s the time to jump. Murdoch’s bid for Dow Jones raises depressed media prices and a bidding war for one company or another could raise them further. So if there’s a strategic prize to get, it’s time to go courting. I don’t think we’ll see any overall buying binge in media; too much of the sector is just too troubled. But I do think we’ll see smart strategic combinations. Dow Jones and Reuters both have competence and brands in data and this is the age of data. In the right combinations, they become more valuable.

As for the Yahoo/Microsoft combination, I see that as Yahoo trying to surrender and go hide under Gates’ skirt. In some ways, it’s like Time Warner being bought by AOL; I said at the time it was their admission they didn’t have an internet strategy so it went to buy — or be bought by — one. I don’t see what Microsoft bring to Yahoo or vice versa in strategic terms. Oh, there’ll be lots of chatter about synergy but I wouldn’t bet my lunch money on it.

It is not journalism’s job to be safe

It is not journalism’s job to be safe or to make the world safe for our consumption. It is journalism’s job to tell us uncomfortable truths.

So I’ve come to think that NBC made the wrong decision about the Virgina Tech shooter’s tapes: They should have released the worst of them. For that would force us as a society to grapple with the issues we’re still sidestepping: How can our laws and systems keep a clearly insane and dangerous man out of treatment and in the public? How can we justify laws that value his privacy — the most overexploited buzzword of the age, I say — over his safety and sanity and the safety of those around him? How can we have laws that prevent the school from telling his parents about his problems and telling the rest of us what happened in his case, even now? If NBC showed how utterly deranged this murderer was, then I hope we would have an outcry to change the One-Flew-Over-the-Cuckoo’s-Nest laws that purport to protect but only harm the insane and those around them. But NBC won’t do that because there reportedly is an outcry (though one should always be skeptical about what media labels an outcry) against their decision to release what they did.

Yet I’ll argue that by choosing to release only the safest elements of this sick collction, NBC made the killer look less dangerous, perhaps even sympathetic or cartoonish. Compare the image with the latest cover of Wired (and, no, of course, the parallel is not that they’re Asian; it’s the fictional nature of both I’m pointing to, each a character in a media narrative).

chonbc.gifcover_wired_190.gif

If, instead, NBC had shown the most vile of Cho’s rants, we would see just how dangerous he obviously was. We would ask the hard questions about why he was allowed to do what he did. And if you’re worried about copycats, I also think that the bilious Cho would be less likely to inspire aspiration than the cartoonish Cho we now see. To those who argue that NBC is only giving Cho his wish — fame — I say they are doing worse: They are cleaning up his image.

Now I’m not saying that NBC should show these images all the time, looping the horror, forcing it upon us. Thanks to the web, they don’t need to show them on the air at all: They could give us the option of seeing them online. Does that appeal to our worst nature? No, it shows our worst nature and the argument can be made that we must face that. By not facing that, we are raising, not lowering, the danger of copycats, of the next nut who’ll be allowed to slip through our laws and systems because we wouldn’t want to offend anyone.

It is not NBC’s job to be safe. But it is NBC’s job to be popular and in this case, that’s unfortunate. I normally reject the arguments of those who want news to be a not-for-profit enterprise. I say that the news must face its marketplace. But this is one instance in which the quest for ratings, popularity, and profit can affect journalistic judgment. Still, NBC did release some of the images and tapes. If they had wanted to be utterly safe, to offend absolutely no one, they might well not have put anything out, or they could have punted that decision to government. Some say they did this for ratings, but I have to believe they knew this would not be a popular decision in many quarters. So they did release some of the tapes. I say they released the wrong ones. If there were ever a story that required uncomfortable truths, this is one.

: See also Dave Winer on this in various posts. And see Michael Markman’s take (but also please see his apology for a tasteless allusion to my views in the comments on that post).

No more wire hangers

The Wall Street Journal reports that Time Warner is thinking of reducing its stake in cable because access will be commodified. Well, at long last, a good decision.

I’ve been arguing for a very long time that cable is not a business with a long and good future. Access to media is going to be a commodity, no longer a monopoly that makes money thanks to its exclusive control of content.

I argued this as long ago as 1990 — and argued it inside Time Warner itself. In my time as a Time Inc. executive, as creator of Entertainment Weekly, I went to my one and only corporate retreat in the Bahamas via the company Gulfstream. The then-executives of the company were bragging about having just gotten rid of their paper manufacturer, Temple Inland, which their predecessors had bought because they thought that as consumers of paper, it’d make sense to own the trees. The bosses now said it made no sense to own those trees.

But they went on and on about the wisdom of buying cable instead. I raised my hand at their dinner bragfest. (This will give you some understanding of why I did not last as an executive at that company.) I said that it seemed to me that owning cable was only the electronic equivalent of owning trees: You were owning a piece of the distribution instead of a piece of the real value.

After saying this, I was practically set adrift on the Atlantic in a rowboat. They scowled. They shook their heads. They moved on. They made plans to get rid of me. What a young fool I was.

Well, it may have taken 17 years, but I was proven right and all those scowlers and cable-buyers are gone: Cable is trees. Nobody wants to own trees. In the meantime, Time Warner has decided it wants to own content instead. But I’ve argued that owning content also has no real future. For that matter, owning isn’t a verb with value. Enabling is what you want to do. Google doesn’t own. It enables. MySpace enables — and its vulnerability is that it still owns and controls. Craigs List enables. YouTube, Flickr, FaceBook enable. Pure enablement is the model of the future, I think.

So what media should a media conglomerate own, if not cable? Newspapers? Ha! TV stations? You have to be kidding. Magazines? Stop, you’re killing me. Networks? Nope; they all accrued their value by controlling a scarcity that no longer exists.

So I’ll repeat the question: What should they own? AOL? Oh, that was below the belt. No, I wouldn’t want to own AOL or Yahoo or even MySpace. They try to control. And controlling will not work in an economy that is based on handing over control, of distributed control.

What enables instead? Hmmmm. Google. YouTube. DoubleClick. Blogger. What they have in common is as obvious as Google’s strategy: They enable. No more trees. No more wire hangers.

My Assignment Zero interview

I was interviewed via email for NewAssignment.net’s assignment zero on crowdsourcing by Neal G. Moore, director of community relations at Indiana University’s School of Informatics. I’ll put up the first exchange. If you have better answers — or better questions — please join in.

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Chaos 2.0

I’m late to this since my AdAge subscription lapsed, but Bob Garfield (of On the Media and Ad Age) has written an important followup to his seminal Chaos Scenario two years ago. In the original, he argued that advertisers saw the decline of old media but that new media weren’t ready for them (as we indeed are not — see my AdAge column on the topic) — and so the advertisers are left without the means to market. In Chaos Scenario 2.0, Garfield argues that marketers have new ways to do their business directly with customers that no longer require advertising. He warns of “the post-advertising age.”

This is fundamental and important. In media, we have long argued that a new medium does not replace the old one and that ad spending may shift around in new mixes but do not decrease. No more. Now marketers and customers can have their transactions and conversations directly. That is to say, we the customers can get the information we want about products straight from sellers and the more that happens, the less those sellers need to waste money on giving us messages we did not ask for and do not want (aka, advertising). The more that happens, the less money they will spend on ads. Total ad spending will, indeed, decline.

That horrible crashing sound you hear is a gravy train derailing.

Media — news and entertainment — have long been supported by advertising and by the faith that even though it may be a zero-sum game, at least there were billions of dollars of support there for the earning. And profitability for those who got those dollars was very high because of scarcity: scarce space, scarce time, and now scarce consumers. What if there is less? What happens in post-scarcity world? What happens to the media economy? What happens to us?

I’d say that depends on who the “us” is. If it’s big, expensive, monopolistic, overpriced media giants — TV networks, TV studios, radio companies, newspaper companies — they are guaranteed to shrink radically and rapidly. They are screwed. But if “us” is new, small guys who are not addicted to big production luxuries — for whom the definition of big enough is many, many times smaller — there is still plenty to go around — but only if, again, we have the infrastructure in place to make it make it easy for advertisers to support us. We little guys are stuck in Chaos 1.0; we’re not ready for the advertisers. The big guys are stuck in Chaos 2.0; they’re seeing advertisers find better alternatives. And if we’re all not careful, the pie will, in fact, shrink. That’s new.

Says Garfield:

It’s a world in which Canadian trees are left standing and broadcast towers aren’t. It’s a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalized and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing — and even branding — are conducted without much reliance on the 30-second spot or glossy spread.

Because nobody is much interested in seeing them, and because soon they will be largely unnecessary. . . .

He recites a requiem litany in the media business since his first chaos piece: MTV, Time Inc laying off. . . CBS spun off from Viacom “lest the broadcast business impede growth and depress shareholder value” . . . broadcast networks shutting out their distribution partners to give us shows directly online. . . NBC giving up on the 8 p.m. hour to give us dreck . . . big, bad Clear Channel doesn’t take over the world but is taken over by private equity. . . Knight Ridder and Tribune melt like witches on water and McClatchy doesn’t turn out to be in Oz. . . DVRs will reach half of U.S. households in three years and once we’re all skipping ads, advertisers say they’ll skip TV. . . TV upfront is down. . . Coke and J&J pull out of upfront. . .

Yup, screwed.

But marketers aren’t crying, or shouldn’t be. He continues:

What is certain is that the Brave New World, when it emerges, will be far better for marketers than the old one. What is nearly as certain is that many existing ad agencies and some media agencies will be left behind. And the reason they will be left behind is their stubborn notion that they can somehow smoothly transition to a digital landscape.

He argues that TV has been kept afloat artificially:

But TV isn’t really in the program-distribution business. It’s in the audience-selling business, and there the economics of scarcity still stubbornly reign. Because no other medium offers the reach of TV, advertisers have continued to pay more and more per thousand viewers — which is why Mr. Moonves is commanding higher CPMs; the upfront market has not yet plummeted; and video advertising on the internet, according to eMarketer, will amount to a paltry $775 million in 2007. On TV, it is $65 billion.

But economics will have its due. The law of diminishing returns will eventually prevail. Those who have perennially spent more and more for less and less will finally say, “No more,” and take their money online — whether there is sufficient ad inventory or not. . .

Mass advertising flourished in the world of mass media. Not because it was part of God’s Natural Order but because the two were mutually sustaining. . . . So why assume that either must transition to the new model? Not only is it economically nonsensical, it squanders the very nature of the digital universe, the ability to speak with — not to, but with — the narrowest communities and individuals themselves.

And they will use new methods that have nothing to do with advertising: Word-of-mouth, social, or just direct contact with customers who want information and can now get it from the marketer or — see my favorite example, my Treo — from fellow customers.

Garfield cites the story of an OgilvyInteractive creative director who didn’t buy ads to give away 45,000 tockets for Six Flags’ 45th anniversary; he posted on Craigs List and after five hours, the tickets were taken. But who gets paid for that? Not even Craig.

Garfield predicts some of the means of death of old media and agencies. I’m not sure he’s right about them all. He heralds — as I’ve heard heralded for more than a decade now — that we’ll watch a TV show and click on a car to buy it. I don’t buy that. He argues that we’ll end up paying for more content, supporting it with our money instead of advertisers’. Not sure I buy that, either. But I do agree with this arguments that we don’t like ads, we do want information, and we are in control.

And what he’s really saying behind all that is that the fundamental economics of media are, if not imploding, deflating. That is a big deal and has implications we can’t yet imagine in media and marketing as well as in the proliferation of small media that can afford to live without big marketing — if it’s ready. Hang on. It’s going to be a bumpy ride. Downhill.