[[cross-posted from PFF Blog]]
Last week, I blogged about how the media industry is in the midst of a major shakeup and de-consolidation craze, but few seem to notice or care. I noted how even a whisper about a potential media merger or joint alliance garners front-page headlines, replete with numerous quotes from the Chicken Little media critic crowd about how the whole world is going to hell. But when the opposite is occurring, and firms are getting smaller or selling off assets, you don’t see or hear a word about it.
Today, however, the Washington Post’s Frank Ahrens, one of the best media beat reporters out there, proved to me that at least one person in the press is taking notice. In a fine piece entitled, “Media Firms Piece Together New Strategies,” Ahrens notes that: “After a decade of growth by acquisition, media conglomerates such as Viacom, Sony Corp. and Time Warner Inc. are beginning to reconfigure, pushed by new technologies and changing consumer habits. At the same time, the 1990s cookie-cutter model of a media giant–take one television network, add a movie studio, theme parks, music company and maybe a pro sports team–is falling from favor, as companies settle on their core identity, analysts say.”
In addition to the examples I cited in my post last week, Ahrens provides many other examples of media providers scrambling to come up with new strategies to meet the growing competition from new technologies and media outlets. In many cases, these old giants are shedding properties and taking a “back-to-basics” approach to meeting this challenge.
Again, as I asked last week: Where are all the media critics now?
P.S> Chapter 3 of my forthcoming book “Media Myths” contains an extensive discussion of how the media industry often goes in waves or cycles like this, with: (1) consolidation being in vogue for a few years as firms seek out “synergies,” but then many of those investments don’t pan out or the synergies never materialize, and then (3) a wave of divestitures ensues as firms scramble to get back-to-basics and focus on their core competencies. This is called the marketplace, folks. Media critics think it’s all some sort of grand conspiracy to destroy democracy or competition, but in the end, we end up with a ever-expanding universe of media options at our disposal. In sum, despite what the Chicken Littles predict, the sky never falls.