The Windmills of My Immediate Mind
Media Business Strategies – David Polakoff
“The Tail That Wags The (Well) Dog(gie)”
Investment in New Media, Alone, Won’t Rejuvenate Traditional Media
Jed Clampett disclaimed, “Well doggie,” to things amazing, remarkable, or enlightening,” in The Beverly Hillbillies. It is not that amazing that traditional media companies have invested in digital media, as there are many reasons for mature companies to purchase/invest in new companies causing tremors in their sector’s space. But if the cable, programming, and broadcast channel companies think that buying the digital companies, that are grabbing the eyeballs and ad/subscription dollars, will be the tail that wags the (well) dog(gie), then I’ll again invoke Jed Clampett, that’s “Like trying to poke a cat out from under a porch with a wet rope.”
A&E invested in Vice. NBCU/Comcast invested in Buzzfeed and Vox, “The Daily Mail” invested in Elite Daily, 21st Century Fox invested in Vice, Disney bought Maker Studios, Dreamworks Animation and Hearst bought AwesomenessTV, The Chernin Group and AT&T own Fullscreen, and the list continues.
Investments and purchases, such as the aforementioned, can be for a host of reason(s): garnering a return on the investment; acquiring intellectual property; harnessing brainpower of founders, management, and staff; seeking operational synergies; expanding top-line revenue and bottom line profit; expanding or preserving market share; gaining marketplace negotiating leverage; preempting a competitor move; quashing a competitor; etc. It is by no means a guarantee that any of these goal(s) will be achieved, as history has shown. Many times, what looks good on paper does not materialize, again for many reasons, but one in particular, when the corporate machine injects itself into a completely different digital media culture, thus suffocating and stifling momentum, drive, morale, and innovation. Founders and senior managers in nimble environments, who enjoyed relative autonomy, find themselves hamstrung and restricted. But, I digress.
In the current investment/purchase environment, big media companies are following their own current and lost, potential audiences to “where the fish are fishing,” on alternative platforms and in alternative forums. These investments are not bad ideas, unless the logic has to do with the thought of “osmosis” through acquisition. In other words, if big media thinks their “tried and true” content, distribution, marketing, and revenue model will be rejuvenated from inviting new media and traditional media to the same corporate conference room table, with cookies, fresh fruit, and coffee and tea selections, they’re dreaming of “shooting at some food” and hoping “up will come, bubblin’ crude (again, props to Jed Clampett).” What is needed is a revamping of the existing cable and network television business to adjust, modify, and transform to current consumer expectations and habits.
In about 1969-1970 and 1970-1971, rural shows ruled the three broadcast networks, especially CBS. With these shows (The Beverly Hillbillies, Mayberry RFD, Hee-Haw, Green Acres, etc.) at the top of the ratings, the networks purged them because the audience was skewing older than advertisers targeted and because those shows didn’t reflect current American society. So, the shows were axed and replaced by fare that included M*A*S*H, All in the Family, One Day at a Time, The Mary Tyler Moore Show, etc. And, with this leap of faith in cancelling top rated shows, the networks survived and thrived with the new fare. True, that quick change was less risky in a three network environment, but the point is that bold, courageous, and leading changes were made to keep the networks ahead of the curve.
The current audience is scattering through the ease of and satisfaction with alternative content, the successful acceptance of variations on business models, results of marketing innovations, and technology. Acquiring the hot, new content/tech companies requires risk taking and leadership. The same risk taking mentality needs to also be applied to existing cable and broadcast channel businesses in an expedient and calculated fashion. Proactive change has proven to be cutting edge and innovative in the television world. Those that have proven adept, in the past, remain the leaders of today. There is no time for industry wide malaise. Quick and nimble innovation is required from within; it won’t necessarily be achieved by acquiring entrepreneurial companies hoping to brain suck from them. It will require traditional companies moving and shaking. By moving the original Clampett, one room home from Bug Tussle and putting it on the Beverly Hills property of the Clampett mansion, you didn’t improve the value and appeal of the Bug Tussle home.
The slow pace of change we, as consumers, and we, as media industry participants, are seeing has me “More scared than a long tailed cat in a room full of rocking chairs (Jed Clampett).”
Media Business Strategies is the blog/website of David Polakoff, a New York based, Media & Entertainment Industry Financial Executive.
David Polakoff’s media/entertainment industry experience and expertise results from his tenures in senior financial and development roles with: Ernst & Young, HBO/Time Warner, Granada America/itv plc, independent consulting, and multi-channel network, Iconic Entertainment, Inc. Currently, David provides financial, operational, and strategic services to media/entertainment companies. Read more in About.