I wrote a story about Disney Parks that ran on Ragan.com today, and I included in that story a sidebar about a provocative video that details the theoretical decline of 20th century media organizations.
The video is significant to this audience for several reasons, perhaps most notably that Disney Park’s vice president of global PR, Duncan Wardle, agrees with the video’s assertion. The video claims 20th century media, namely The New York Times, will either fold or, in the Times’ case, become a print newsletter for “elitists and senior citizens” by 2014.
Wardle, the keynote speaker at Ragan’s August social media conference at eBay’s corporate headquarters, said he believes the ultimate demise will happen sooner than 2014. Many social media experts and bloggers agree that traditional media organizations, like newspapers and network news, have reached their terminal stage. That is, it’s only a matter of time before they’re dead.
Wardle and others insist communicators must adjust their practices to fit this quickly evolving media landscape, an apocalyptic landscape for traditional media companies.
But if we “follow the money,” instead of just looking at reader habits, there’s a different, more optimistic story unfolding and the media landscape doesn’t appear as bleak for newspapers.
Here’s what I mean.
Newspaper revenues have declined over the last several years. The cause of this decline is primarily increased Web readership, although the rise of cable news plays a part, because online ad revenue can’t support newspaper budgets the way print revenue did.
To sustain themselves without massive layoffs and thinner and more vapid articles, newspapers must build a new revenue model. After all the audience is there; visits to newspaper Web sites continue to increase. But as the sustainable revenue model eludes newspapers, it seems the good bet is against these so-called 20th century media organizations.
However, recent moves on and away from Wall Street paint a different picture. If communicators are told to pay attention to the theoretical future of media, then it is also advisable they pay close attention to what’s happening in the real world.
Last week, the world’s second richest man, Mexican billionaire Carlos Slim, bought a 6.4 percent stake in The New York Times Company. On that news, the company’s share price jumped nearly 9 percent.
Slim, a telecommunications tycoon, told media outlets he purchased the shares for financial reasons, not as a strategic move into U.S. media. Although Wall Street investing, especially at Slim's level, is complex, this move implies a very rich and successful man is betting on the company’s rebound.
New York-based investment firm Harbinger Capital Partners is the largest investor in the Times. In January, the investment firm vied for greater control over the company’s Board of Directors. While this attempt mostly failed (depends on whether you’re a glass half-empty or half-full person), it ultimately hurt the paper’s reputation on Wall Street and over the course of the year its stock price has plummeted. Slim cited this low price as one reason why he bought so many shares in the Times.
However, Harbinger changed its outlook on the Times last month when it upped its investment in the company by $1.7 million; seems Harbinger, which has made some very lucrative bets on Wall Street this year, believes Times stock will bounce back.
Perhaps Slim and Harbinger’s recent optimism for Times’ stock is sinister and there’s a plot hatching in the high rises of Mexico City and Manhattan. Taken at face value, however, these are good tidings for the embattled Times and even the newspaper industry at large.
Meanwhile, away from Wall Street Sam Zell, the foul-mouthed owner of the Tribune Company, continues the uphill battle to turn a profit on his newly-acquired media holdings, which include The Chicago Tribune and The Los Angeles Times. Zell bought the company last year, steering it away from public ownership.
Right now it appears Zell and his cronies are floundering: axing employees, chopping pages in their newspapers and leaving a lingering resentment among current employees. But Zell has a record of business success, albeit it real estate; he isn't the world's 52nd richest man due to sheer luck.
Zell apparently thinks he can make a buck in newspapers. He’s said he bought the Tribune Company to make money, not as a pet project. While many people will disagree—myself included sometimes—I think Zell may have a few tricks up his sleeve with the Tribune papers. For instance, redesigns for all Tribune-owned papers will reportedly premiere this fall; that will be interesting.
So it seems some very rich and successful people are betting on the renewed vitality of the 20th century media organizations; that news is as compelling as any YouTube video.