Question: Which media companies will win over the next decade?
Tom Glocer: I’ve probably tipped my answer a little bit. I think it’s always the companies that have a certain lightness of technological feet. People who are not so bought into one particular era’s Technology that they can’t look at their business, abstract a layer up as to where their real value lies, and transfer it one generation from the next, literally curve jump from one technology to the next.
There are countless examples of companies that either buy up satellites, or lay telegraph wires, or like Wang and Videk and dedicated word processors, couldn’t make that transition.
I think the media companies of the future are the ones that say, “Yes, we were something called the newspaper, and yes we did publish on trees, and no we didn’t have video because you couldn’t show a video on a piece of paper. But now, actually you can and we are a content company. We’re about telling compelling stories whether they are totally non-fiction excellent journalism, or whether they’re fictional, including what we call the movies.”
I think it’s those companies that are self-aware and understand their value and their audience, they’ll make the leap. And obviously I believe that they’re electronic. If you look at where people are still making money in media writ large, it tends to be on the electronic side.
Question: What are your thoughts on paid content?
Tom Glocer: I think people are willing to pay for quality content. I still read a couple of newsletters which are quite, expensive and are now sent via PDF, but they’re fundamentally very old fashioned. I do, because I still value the content they provide.
I think newspaper and media companies, in general, got very over-leveraged on one particular modernization model, which was advertising, and in particular the most vulnerable part of advertising, which was classified. Everyone is now used to the reason why Craigslist or Monster.com is a far more efficient version of classified. You can’t search a newspaper and who wants to spend a whole day reading little bitty ads?
I think the other shock to this system was what Google and others have done to more conventional advertising, which is the old adage in the ad world was, or at least for the clients of the ad agencies, “I know I’m wasting 50% of my advertising. I just don’t know which 50%.”
Well guess what? Now you know.
By targeting and linking the ads serve up to the action that you wanted to instill, folks like Google have greatly increased the potential efficiency of online advertising. To me that means that you no longer have to waste that other 50%, and we’re seeing a tremendous compression. Were seeing a recession as well as a structural change in the advertising market. It’s only logical that if people really do value the content, and I think there are people who do, newspapers and others are going to start charging for it and if you look at what folks like the FT [“Financial Times”] and the Journal [“Wall Street Journal”] are doing, they’ve been pushing up the price of newspapers, and I think that’s entirely justified.
Recorded on: May 29 2009.