Media 2008

Today’s media landscape is far more crowded than it was as recently as 8 years ago, when George W. Bush was running for President with the promise that he was a “uniter, not a divider” and the Gore campaign was the first to be communicating via Blackberry. There are significantly more media choices today than ever before, both for the consumers of information and entertainment, and for the advertisers who want to reach them.

As new and developing technologies create opportunities for expansion and growth, the control (ownership) of the media, through mergers and acquisitions, consolidates into fewer and fewer media giants. A glance at five of the largest media companies in the United States can be found here. A pdf of what Advertising Age has named Media Family Tree 2007 can be downloaded by going here and then by downloading the Digital Family Trees 2008 poster (copyright protected; otherwise I would have tried to embed it). This provides a snapshot of the country’s largest media companies, based upon 2006 revenues.

2007 was a busy year for mergers and acquisitions across all media (from The State of the News Media 2008):

Two notable newspaper transactions: “Sam Zell took Tribune private in an $8.2 billion deal, and Rupert Murdoch’s News Corp successfully bid $5 billion for Dow Jones and its Wall Street Journal.”

Online media ownership changes: “The first three quarters saw more than 637 transactions, matching the number for all of 2006. What’s more, these deals totaled more than $95 billion in value, surpassing last year’s total of $61 billion by 56%.”

The Federal Communications Commission and its rules of ownership, which have gone through periods of tightening and relaxation, regulate the expansion of these media giants, and their fewer and fewer not-so-giant competitors, on a market-to-market basis. As stated under the heading of media ownership “The Nation’s media regulations must promote competition and diversity...” The risks are too great for the emergence of a monopoly in terms of their editorial product and the information they choose to deliver (or withhold), and the elimination of competition in the advertising marketplace.

While all forms of the news media are aggressively competing with one other to get the story out, they are also competing on the business side for the limited advertising budgets, that 1. Need to be spread over a more diverse media landscape and 2. Constrict every time our economy contracts. Ironically, the evolution of cable technologies and the 24-hour news cycle coupled with the technologies of digital media production have created the potential for a revenue vacuum, as the competition to deliver the news sometimes supplants the campaign’s need to buy air time. An excerpt from this article supports this point:

“VandeHei asked McKinnon how campaigns could “exploit the new habits of the media” (which brought a sly grin to the consultant’s face), where commercials as soon as they are released will get distributed, instantly, at no cost to the campaigns, via the twenty-four hour cable networks and Web sites like Politico.”

As the introduction of The State of the News Media 2008 clearly observes:

“… it appears the biggest problem facing traditional media has less to do with where people get information than how to pay for it — the emerging reality that advertising isn’t migrating online with the consumer. The crisis in journalism, in other words, may not strictly be loss of audience. It may, more fundamentally, be the decoupling of news and advertising.”

Along with the mergers and acquisitions, there has been a willingness to create partnerships or strategic alliances, that bring traditional print sources, such as the New York Times or Washington Post, together with cable broadcast partners to share resources (content) with a broader audience at a lower cost (it is more efficient to let the New York Times tell the story on MSNBC than for NBC to break the story).

“In broad terms, the fundamental trends transforming how people acquire news continued in the last year. More effort keeps shifting toward processing information and away from original reporting. Fewer people are being asked to do more, and the era of reporters operating in multimedia has finally arrived.”

The Major Trends in the media are identified as:

1. News is shifting from being a product - today’s newspaper, Web site or newscast - to becoming a service - how can you help me, even empower me?

2. A news organization and a news Web site are no longer final destinations.

3. The prospects for user-created content, once thought possibly central to the next era of journalism, for now appear more limited, even among “citizen” sites and blogs.

4. Increasingly, the newsroom is perceived as the more innovative and experimental part of the news industry.

5. The agenda of the American news media continues to narrow, not broaden.

The balancing act of packaging and delivering the news, while serving the public good and meeting ownership objectives for profitability is the fundamental challenge of the media, regardless of whether they are traditional or new.