When even Rupert Murdoch is singing dirges for print media, you know it's bad
I recently had a lengthy conversation with a fiftysomething executive who has spent most of his professional life running businesses that put ink on paper. He just conducted an experiment. He did not touch any print for a month. He read all news and articles online or on his handheld. He read books on his Kindle (AMZN). He concluded he didn't miss much, and told me that shunning physical media is a "sustainable" stance, if not necessarily "optimal." (This is a guy who's spent decades around physical media, after all.) But, he warned, "when you listen to people defend print media, the fundamental defense is portability. I'm here to tell you that's out the window." We took a moment to chuckle, mordantly, about what this meant for the entire economy of news and narrative, which won't be supported by online-only revenues anytime soon.
With this rattling around my mind, late last month I attended the All Things Digital conference. There many of the notable digerati (Jeff Bezos, Jerry Yang, Facebook's Mark Zuckerberg), not-so-digerati (Time Warner's (TWX) Jeff Bewkes, Sony's (SNE) Howard Stringer), and hybrids (ex-Hollywood icon and current IAC/InterActiveCorp (IACI) CEO Barry Diller) gathered to schmooze and chew over the state of things.
As you might expect of high-level conferences held in gorgeous Southern California resorts, the mood was mellow, even if many of the big players in attendance--hello, Messrs. Yang and Diller--have hit rough patches lately (although Yahoo!'s (YHOO) nonsale to Microsoft (MSFT) loomed much larger in hallway chatter than Diller's recent court battles). In terms of hearing great perspectives from some of the smartest, the gathering was great. In terms of a crystal ball on what will happen to some basic building blocks of the media world--news and narrative--in an ecosystem wrecking all past assumptions, well, not so much.
It is sobering when not even the smartest guys in the room have any plausible answers. But then, no one has the answers. At least some had wit. Tom Glocer, CEO of Thomson Reuters (TRI), said that as massive revenue declines at newspapers force cutbacks, companies like his pick up the slack. So his wire service is up "5% to 10% over the past several years." As for the business of newspapers, he said: "I just hope it hobbles along for a long time."
More surprisingly, Diller said that the rise of social networks--he won major points with me for dismissing that jargony term as "dumb-ass"--and the tools and ethos of sharing they propagate will change storytelling.
"I come from narrative," he said. "I thought nothing would interrupt the story, and people want to sit there and watch passively, and that is the storytelling experience." Now, he says, "I don't think passivity is going out the window," but it will shrink in significance, thanks to interactive tools that enable people to "manipulate" forms of content. Music geeks are fond of saying that the three-minute pop song came about because once you could only fit a few minutes of music on vinyl 45s, so it's hardly unheard of for technology to shape content. But it's still intriguing to hear someone like Diller cop to it. (Then again, as one conference wag noted, his is a company that has "interactive" in its name.)
A MOGUL UNNERVED
The other highlight of the conference was a lengthy and relaxed after-dinner onstage interview with Rupert Murdoch. He had kind words for Barack Obama and admitted playing a role when his New York Post endorsed the Illinois senator in the New York Democratic primary. Murdoch shrugged off AOL's (TWX) $850million deal for the social network Bebo, saying News Corp. (NWS) had previously passed on it at a valuation of around $100million. (Ooh, snap!)
I was still thinking news, though, so I asked Murdoch, the longtime newspaper guy, what he would do if he found himself owning a bunch of big-city newspapers. His first reaction: "I'd run." When pressed he said that papers had to adjust expectations--that 30% profit margins were shrinking to 10%, and some may not even survive. News Corp. withdrew a bid for Tribune's (TXA) Newsday, he said, because "I got scared." I was left thinking, good grief. If Rupert Murdoch is writing off a major segment of the American newspaper industry, it's truly time to shut off the lights.