Old Media is Dead; Long Live Old Media
Anita Sharpe on Business
What would you rather spend two hours watching -- a Hollywood movie like Walk the Line or an Internet video of an elementary-school orchestra concert (assuming your little progeny isn't one of the players)? Much is being made over the notion that blogs, podcasts etc. have leveled the media landscape, but I have to wonder if customers -- who determine whether something is a business or a hobby -- will decide that amateur hour isn't something they actually want to pay for.
The Economist magazine has an interesting take this week on old media vs. new:
'...old media will command audiences for many years yet. New media understand this: Google has just bought dMarc, which sells old-fashioned radio advertising. Websites, such as BabyCenter.com and AlwaysOn, have recently launched print-magazine versions of themselves, to capture advertising that was out of their reach online. As the best remaining source of a mass audience, TV and film are the best places to create and promote the next Simpsons or Narnia.
Some people worry that new media companies may over time shunt old ones aside as producers of content. Certainly, digital media will create new stars and new businesses, but making high-quality video content will always be a daunting and expensive task. Music or a blog can be composed from a bedroom, but not an episode of Friends. Just last month DreamWorks, Hollywood's youngest studio, sold itself to Viacom, despite its strong financial backing and the talent of Hollywood luminaries. It made some money, but could not afford a billion-dollar investment in films year-in, year-out. Yahoo! has a media unit, but so far it hasn't had any hits. Responding to the news this week that Yahoo! intends to spend up to $10m on a reality-TV concept called The Runner, analysts complained that the investment would damage its margins.
By contrast with Yahoo!'s dabbling, old media is now investing in digital media in earnest. It all went terribly wrong before 2000 when bewitched executives squandered money on the internet and Time Warner sold itself to AOL in one of history's worst-ever deals. But now they are back.'
What do you think?