Last week, traditional media execs got another digital wake call with the demotion of a well respected Newspaper editor in Philadelphia; award-winning Bill Marimow was re-assigned as an investigative reporter. Philadelphia Media Network CEO; Greg Osberg, publicly stated that he ‘did not have the background in digital media necessary to lead the paper going forward.’ This announcement was a biggie. If you listen very close, you can hear the sound of old school media execs scrambling to finally start their linked-in profiles and Facebook pages.
In other ‘That Won’t Ever Happen Here’ news….Deseret Media in Salt Lake City, lead by innovation pioneer Clark Gilbert, purged 43% of his print staff in order to grow the ‘digital first’ team. While painful to execute, DESERET smartly merged the remaining print staff with their staff at KSL-TV. This resulted in a 200 person newsroom, the largest in the state. With Deseret’s plan to tap the indie blogger/web journo space, this may be the finest, working model of local media disruptive innovation in action, as described in the business best seller; The Innovators Dilemma.
Hey look, I’m digital..…NOT. It’s easy to see why a Newspaper technophobe could get the boot. You could also make the case that a sales manager who hits his broadcast budget, but lets a client place their web budget elsewhere…could also be shown the door. But there’s also another way to win some walking papers, while ‘looking’ like you’re digital. In this smooth move, the media exec outsources key sales activity to 3rd party vendor. It shows corporate a quick boost to the interactive bottom line, with little or no investment. In reality, this faux-digital exec just let the wolves into the hen house.
The Yahoo Consortium; and other deals with the devil. This might be one of the most visible examples of traditional execs letting those wolves in, and keeping them warm and well fed too. In order to shore up their weakening web efforts, Newspaper execs trained their own reps to pitch the virtues of Yahoo, in exchange for getting access to the national web giant’s cool new ad serving software and audience. The revenue split did bring in some new cash, but at the huge cost of letting Yahoo build a relationship with print’s advertisers. On the flip side, this might be Newspaper capitulating to the fact that they their strongest asset is their local sales force, so why not leverage it?
DataSphere–smart, local TV? Not so much. This tech company from Bellevue, Washington has been a Godsend for some digitally stressed TV execs. In this deal, DataSphere provides the station with a quick roll-out of trendy hyper local sites, complete with outsourced cold-calling of local business owners. Sure, it looks brilliant: nothing but profit for the TV station, while keeping the traditional sales staff focused on selling on-air commercial time. But the creepy facts of DataSphere keeping over 50% of the revenue, pimping out the stations’ call letters, and having a primary relationship with the local business… is like killing your last chicken for the meat, at the loss of your egg supply. Providing access to local advertisers, and sharing revenue with those who want to eat your lunch, is not a digital revenue plan you want your name on. We suggest that this reveals limitations of digital business savvy at best and poor fiduciary oversight at worst.
Think it’s tough for Newspapers? It’s even tougher for local Radio as they hang their hat on being a media platform for content they don’t own: music & syndicated talk. At a recent gathering where execs convene to network and debate the future, many put blue-sky spins on their squishy web results. The most glaring was how they shared their digital results: revenue & web traffic increases described in terms of percentages. These numbers, coming off low comparables, won’t even impress a rookie Wall Street or private equity analyst. Recent research shows that Radio gets less than 2% of local online advertising spend.
The world of safe & old school media management is over. It’s now being replaced by execs with a DNA infused with entrepreneurial & turn-around expertise, combined with serious biz-dev skills. Much of this evolution will start at the top.
Local media can learn a lot from other mature industries. It took guts, humility and foresight for the great-grandson of Henry Ford to step aside, and let a Boeing guy; Alan Mulally take hold of the automaker’s reins. Bill Ford knew that current management and the insular culture had too much to protect. Similarly at General Motors, former AT&T CEO Ed Whitacre was hired to rip out the diseased and dying heart of GM. Whitacre, with no experience in cars other than to drive one, wasn’t looking to win any popularity contests. He had no motivation to protect the way it’s been, so he immediately dealt with the 800 lb. gorillas in the room. Big Ed helped turn around the company around in double time. An insider with too much legacy baggage could have never accomplished that.
Like the necessary & dramatic change at GM and Ford, local media will go thru this same, gut wrenching change as well. It’s already happening as the above examples in Philly & Salt Lake city can attest to. To be sure, we’ll hear NO WAY, THAT WILL NEVER HAPPEN HERE. The incumbents will take a stand and dig their heels in. They’ll tell you a million different reasons why there’s no need to change, and why those in charge have decades of superior results, and YES, they can be digital enough!
Creative destruction is accelerating in Detroit, Philly, and Salt Lake City and other cities yet to be announced. Proof that the most entrenched corporate cultures can, and will be blown up, with little regard for ‘the way it’s always been’.
— Mel Taylor, MelTaylorMedia.com