The Viacom split is finally offical. Faithful readers know that I have been sounding off about this (and other media divestitutes) for many months now and wondering why we haven’t heard a peep from the Chicken Little media critic crowd about it. After all, whenever there’s even a minor media merger or acquisition proposed, these critics rush out hysterical press releases predicting that the End Times will soon be upon us.
And so I went searching again today online to find see if these groups had posted something–ANYTHING!–about the Viacom crack-up. But I have found nothing. The silence is deafening. I guess that’s no surprise since these critics have made a career of spinning gloom-and-doom tales without providing a shred of evidence about how consumers have supposedly been been harmed. Worse yet, they run around saying that the Internet and new technologies and media outlets change nothing and that the old media companies are still programming our brains. Just silly.
Anyway, the Viacom saga is an interesting case study in just how dynamic and turbulent life in the media marketplace can be. Take a look at media guru Ben Compaine’s excellent synopsis of just what has taken place for Viacom over the past two decades. What a rollercoaster. It isn’t surprising that Redstone and the board wanted to get off that wild ride and try to force each division to get back to basics.
Will it work? Who knows. Old media outlets and companies are certainly in some trouble, but they also have a lot going for them too (great name recognition, consumer loyalty, cash in the bank, etc…) But new media players are kicking butt and taking names as of late. As I mentioned a few days ago, Google is now considerd the biggest media company in the world with its stock trading at a staggering $293 a share. In just 10 months of trading as a public company, it has surpassed Time Warner to take the honor of top dog in the media universe. Just stunning when you think about it.
Meanwhile, Google and Yahoo! are “sucking the financial air out of the room” in terms of stealing away valuable advertising dollars from newspapers. According to this story, when it comes to new revenue, Google and Yahoo! have generated $4 billion last year–the same amount as the 10 largest newspaper companies combined!
In other words, the media world is changing, and in amazing ways.
Anyway, this is the point in the blog where I put in another shameless plug of my new book, “Media Myths: Making Sense of the Debate over Media Ownership,” and say I told you so!
[UPDATE: I highly recommend this excellent Viacom postmortem by Daniel Gross of Slate. He takes a close look at what's driving the recent media DE-consolidation craze and examines why it will likely continue. As Viacom Chairman Sumner Redstone said when announcing the break-up, "The age of the conglomerate is over." I personally think that is a bit of a stretch, but there is little doubt that massive media downsizing and divestitures will continue.]