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October 23, 2006
Hastening the end of traditional media ownership
The Tribune Company is putting itself up for auction... auction! Like it's a Xanadu mansion repossessed from a bankrupt business baron. (Story, requires subscription.)
Well, that's not too far from the truth. For years, Tribune gobbled huge meals of large city newspapers like the L.A. Times even when it was clear that the big-city newspaper business wasn't a growth industry. Tribune's appetite made it so obese that now the company can hardly support its own weight. Besides a bad marriage with the Times' Chandler family in L.A., social media has hastened the end for Tribune. Nearly all of the company's traditional media properties are suffering the effects of audience fragmentation caused by MySpace, YouTube, and a million video games. The era of traditional media conglomerate ownership is over.
Besides the Chicago Tribune and the L.A. Times, the Tribune Company owns large papers like the Hartford Courant and the Baltimore Sun plus the Chicago Cubs, a bunch of TV stations, WGN radio and Tribune Entertainment, which distributes all sorts of TV shows. Tribune is a be-all-media company, but it hasn't adapted well to the disruptive arrival of digital media. (Just try finding the Trib's blogs from the paper's byzantine online navigation.) Tradition-bound conglomerate media companies like the one I worked for in Texas, Belo, refused to cannibalize their core products while upstarts did. Those upstarts have been poaching readers, viewers and listeners a few thousand at a time for at least 10 years. Circulation is down at every big newspaper and advertising revenues are flat or declining at papers and TV stations. Tribune has interests in some Internet properties, but conflicting corporate interests within the corporate media family have prevented true disruption and the kind of breakout growth that would help reposition Tribune as a company that gets it.
And now Tribune is on the auction block, its properties likely to be sold to private-equity firms that'll either squeeze them dry for cash or prop them up and sell them piecemeal to local investors. In the end, that's probably the ideal outcome -- for the Times, the Sun, the Sentinel and the Cubs to be sold to local buyers who'll lavish the time, attention and investment they deserve. Certainly that's what those communities deserve.
Knight Ridder is already gone. Tribune is queued up. On deck are Gannett, Sun-Times Media Group and Belo. Maybe even the New York Times. It seems 2006 will be known as the year when the world crumbled for traditional media conglomerates.
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It's more than a little disheartening to see the Trib, which despite always living in the suburbs I considered to be a hometown newspaper, go through this. The best analysis I heard regarding Trib Co. was that it should sell all non-Chicago assets and get back to its roots. You're spot on in saying it got to bloated. It's like Mr. Creosote in Monty Python's Meaning of Life after he's just eaten that one last wafer-thin mint.
And what is with the Trib all but actively discouraging people from finding its blogs? That never made sense to me.
LOL -- Mr. Creosote was exactly who I was imagining while writing. That movie scene is forever burned into my head.
The people at Tribune are good people. I think, though, they are overwhelmed by serving too many chiefs and their conflicting agendas.
It was July of 1997 when I started my first job in Chicago at the Trib. Back then, the company made some smart and agressive investments in new media, particularly in partnerships with AOL which made the company lots of money. I worked on the online edition where we were early innovators in digital content. Looking back, I came in at their media peak I think. But now this all seems so sad and unfortunate given the potential they once had. These are amazing times we live in. We are faced with the this question every day "am I going to learn something new today"? If we don't adapt daily, we will have only ourselves to blame for the consequences.
David, many of us in Dallas back in the mid-1990s were impressed with and jealous of the work y'all were doing with online media then.
I can't help but think of a song lyric from Queen:
"Another one bites the dust."
Newspaper readership keeps plummeting, causing ad dollars to shrivel up. Their only loyal readers and subscribers are Baby Boomers and the older Silent Generation.
I've seen it happen at The Seattle Times, a client of mine. Print journalism is a tough gig these days.
Let's recognize that not only traditional media suffers from growing by merger and acquisition.
“Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger. Moreover, comparison companies—those that failed to make a leap or, if they did, failed to sustain it—often tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness.”—Jim Collins
“Acquisitions are about buying market share. Our challenge is to create markets. There is a big difference.”—Peter Job, CEO, Reuters
In my opinion, growth through merger and acquisition is a failed policy, whether we look at tradition media or other verticals. It can and should be part of our growth strategies, but not the primary one.
Lewis
