SIIA Information Industry Summit 2008: CEOs Outlook - The Tipping Point for Old and New Media
Moderator: Jim G. Kollegger, CEO, Genesys Partners, Inc.
Panelists:
Ken Auletta, Author and Annals of Communications Columnist, The New Yorker
Michael Barrett, EVP and Chief Revenue Officer, Fox Interactive Media
Jim Kelly, Managing Editor, Time Inc.
Alan Patricof, Founder and Managing Director, Greycroft LLC
Jim: This is the seventh summit of the merged Software and Informaiton Industry Association, it's like surfing, the industry has to catch the wave, need to skate to where the puck is going to be. Last summer watched YouTube presidential debate, on Meet the Press Ariana Huffington is there as an equal because of Huffington Post. A tipping point is developing, there's a slow building up and then a dramatic increase. Newspapers are in free fall, magazines are getting thinner, new media doesn't kill old media but repositions things. [To Kelley] How do you position yourself in this era?
Kelly: Has 125 media properties, most are in Britain as a part of IPC, much different model over there, here it's the familiar brands, some of those titles make a considerable amount of money from print advertisers and subscribers. People magazine has 2 million people who are willing to subscribe for USD 109 per year. Another 1.5 million will buy it as the newsstand. Makes hundreds of millions a year. Each magazine has been tasked to find their own digital future, some have a bigger opportunity than others, Sports Illustrated doing well, acquired FanNation, Face of the Crowd (Greycroft company). People has StyleWatch online, we're an increasingly mobile society, using devices that are not friendly to a 2,000 word narrative. Advertisers are finding more effective ways to reach consumers, Johnson & Johnson's Baby Center is making parenting magazines ask what they can do to counter. The younger you are, the more likely you're likely to see everything on the Web as content, whether YouTube, an alert from WaPo, to define models around topics is harder as communities create their own power.
Barrett: Every challenge creates a business opportunity, allowing time-shifting, old distribution under assault, look at MySpace, 70,000 vidos posted every day, all this consumption and creation, none of this takes away the value of major TV shows. MySpace communities can create a place for media brands to build audience rather than erode it. If you stream video content you erode TV but if they're people who don't want to miss an episode you can keep them captured, will be a constructve model, not destructive. Haven't closed the gap in economics, but getting there.
Jim: Would you invest in a magazine property today?
Patricof: If just print, no, but now there are new channels from old media. Video to magazine Web sites, Tackle sports network for football, synergistic aspects of print publication that can help to power online content. Every has adapted to new media, we're in venture capital business, corporate investors come and go, now major media brands are the major investors, now right on the front line of making investments.
Jim: Why the investment in HuffPost, Ariana?
Patricof: Started as political blog, now entertainment, finance, unique visitors are climbing dramatically, have invested in blog site - paidContent.org, lot lower investment to get into that than to get into magazine industry. Huffington left a fund-raiser to be at blog conference.
Kelly: When willl HuffPost make money?
Patricof: Let me ask you about some of your publications. Took years to build many print titles.
Kelly: Sports Illustrated took at least a decade.
Jim: Are newspapers in free-fall?
Auletta: If you interview people who are in news you meet people who are terrified. Online newspapers are exciting, but how do you monetize is not the same as paper, haven't figured it out. FT is profitable, WSJ, but they are closed universe, limited shelf space for advertisers. Are they open to new media, are the open to breaking out of old patterns?
Jim: Tribune sold for about half a million, how do you make a small fortune in the news business? Start with a large fortune. Murdoch bought MySpace when daughter brought it to his attention.
Barrett: News Corp driven from the top, not a lot of analysis, not sophmoric but where other companies can spend months in analysis for boards, private companies can react quickly, deals done in 24-hour windows. They can afford to wait years to make investments pay off.
Jim: WSJ over-weekend advertiser, but makes sense.
Patricof: Flies in the face of terrified print.
Auletta:Synergy is an overused word, but Murdoch can move fast and create synergies.
Kelly: Murdoch making paper broader.
Patricof: What about books, Eisner putting out webisodes, book based on webisodes being released in their wake.
Jim: Behind every great media company is a mogul [comment: Brin and Paige as moguls? Close enough.].
Kelly: Luce sold Time mag twice over at first, was able to turn it into a real investment eventally.
Auletta: Old and new media, new media dominated by engineers, Google's had palpable success, engineering culture is driving these companies, represent different value systems, different cultures. If you said the engineer is no longer king at Google it wouldn't work, Terry Semel took over Yahoo, didn't work, don't understand half of the words that engineers were saying. John Scully didn't understand Apple.
Jim: What are your driver, what do you lose sleep over?
Kelly: Spend a lot of time with video, monetization is still a work in progress. Look at reviews on Amazon.com, look at all those reviews, why not sell them to NYTimes.com?
Auletta: It's a way of looking at things.
Barrett: Everything's going digital, mobile, whatever, we have a stake in all, what concerns us is the race to who has the most data on people. Google will be 10x as they learn more about end users. Advertisers are going to demand that information, won't settle for household demographics. Don't get disintermediated with your own consumers.
Jim: Yahoo in China?
Barrett: Have to play by the rules, privacy is a huge concern, however people get the fact that they're not paying for a social network, why send me ads for singles when you know that I am married? Have to stop somewhere, but would you rather have an ad that means something to yo or not?
Patricof: Relevance is part of it, localization is a bigger part. Down to zip codes, neighborhoods, addresses, television is moving in that direction.
Auletta: 4 billion cell phones, but do I want to be interrupted on the phone with an ad? Facebook related ads had to be pulled, users didn't want them.
QUICK TAKE: A really good panel, senior media players but people who really understand the issues. Long story short, old media is hosed in terms of the old platforms with old models but new platforms and old platforms with new models are going to do quite well. I think the largest issue that's lurking at the edges is the rise of video as a factor in devaluing the written word as monetizable content whilst at the same time we have a hard time monetizing video online. There are huge gaps in revenue development that aren't easy to address in the short term. But the good news is that major media companies are indeed begining to learn how to invest in new plays, hopefully with the patience that old "moguls" had. They are becoming the exit strategy for many plays, but there's only so many immature media plays that you can absorb before owners and shareholders get itchy. We're going to see an impatience gap soon enough: angel-level investors who are more content for the long haul hanging on, higher levels of equity providing mostly an acceleration path for spinoff to media holding companies. You can't innovate in media as a fully public company effectively - Google was wise to move cautiously into public shares. The economic models are not mature, but economies follow value. The economies may not look like old models, but they will come indeed.
Labels: CEOs, media, SIIA Information Industry Summit 2008
