interesting read
=====
iwantmedia.com
Michael Wolff: 'The Internet As Media Has Failed'
New York Magazine's media columnist says the Internet works as
"facilitating technology," not as a venue for media business.
I Want Media, Thursday, 02/01/01
Michael Wolff is the media columnist for New York Magazine and author of the book
"Burn Rate," a candid account of his experiences in working on the Internet. He
appears regularly as a guest commentator on television news shows and as a host of
media forums. I Want Media asked Wolff for his thoughts on a variety of media
subjects.
I Want Media: You have said that you approach the subject of media in your
New York Magazine column as a "human comedy." Can you elaborate?
Michael Wolff: I think the media business is a funny business. It's filled with outsized
people doing more or less show-offy things. And we've found ourselves in this comic
situation in which the media business is the triumphant industry of our time.
IWM: We hear that you're writing a new book, "Autumn of the Moguls." What's
it about?
Wolff: It's actually about the comedy of the media business. And it's also about this
condition wherein we have tried to consolidate the media business just as it is in the
process of fracturing into a hundred million pieces. The book will be finished in about 18
months.
IWM: One of the biggest media stories of the past year was the AOL-Time
Warner merger. What will be the repercussions of this mammoth deal?
Wolff: It's just happening now. I don't think anybody has remotely any idea of what it
will be like. Will it be a success or a failure? I think it's all wait and see at this point.
IWM: Do you think other media companies feel a pressure to merge in order to
keep up?
Wolff: Possibly, yes. But I think just as possibly they feel a pressure to deconstruct.
We're at a point where media companies have grown so large that I'm not sure there is
a next step to "largeness." And right now the imperative for these companies is to
survive and increase profit margins. Ultimately, everybody is going to be open to all
manner of corporate manipulations to achieve that, whether that means buying
companies or breaking up existing companies. What we have seen concurrent with the
AOL Time Warner measure is the imminent breakup of AT&T, which in some manner,
shape or form is a media company.
IWM: What were the other important media stories of 2000?
Wolff: There were a lot of mergers last year. As I said, AT&T, which has become a
reverse merger, was a profound story. The collapse of the dot-com business was a
profound story, and actually probably a larger story than AOL Time Warner. The Vivendi
story I find monumental and very interesting, reflective of the comedy of this business --
[the ideal of] a water company taking over a Hollywood movie studio. It's a hilarious
story.
IWM: Several media companies have recently announced layoffs and hiring
freezes related to the advertising slowdown and difficulties at their Web sites.
Are we over the hump, or is the worst yet to come?
Wolff: We're just at the beginning of the hump. I think it's quite likely that if there is a
slowdown it will hit the media business very hard. A lot of the growth in the media
business over the past 24 months has been this dot-com stuff, and that has gone away.
It's like we're beginning from square one. I'm not saying there's going to be a disaster in
the media business. But I think very clearly there was a period of excess, and now a lot
of companies are going to have to deal with that in some way.
IWM: Recent studies say the long-term outlook for media is robust. So could
these cutbacks be short term -- or shortsighted?
Wolff: It depends. There will be more media, more people in the media business and
fewer industries that will not characterize themselves as in the media business. At the
same time, it's going to become a hard living. It is becoming increasingly less clear how
you make a substantial amount of money in the media business. There's significantly
more competition. Every day there are new forms of media, which are all competing
with the older forms. And there is enormous technological uncertainty. So it becomes
less and less clear how to make advertising work in an efficient way. And it has always
been hard to find and retain subscribers.
IWM: What do you think is the long-term prognosis for content sites like
iVillage, Salon and TheStreet.com?
Wolff: I think it's dead. I think it's over with; it's gone. There is no long-term prognosis.
The patient has died. There is no future.
IWM: So do you see these sites possibly shutting down some day?
Wolff: I do.
IWM: Is content no longer king?
Wolff: Well, I don't think content was ever king. I think it just didn't work. It's more
fundamental than whether it's content or distribution or whatever. The Internet as media
has failed. It wasn't interesting to any of the parties involved, essentially. People didn't
want to pay for content, and there was no way to generate money out of content. It
didn't work for advertisers, and it's not going to work. The Internet works as an
infrastructure that moves lots of different kinds of information. But in terms of being "the
media business" per se -- forget about it.
IWM: So for newspaper and TV station sites, for example, do you see the Web
as more of a promotional outlet than as a place to produce revenue?
Wolff: Conceivably, sure.
IWM: Inside.com, the widely publicized media news operation, has been up
and running for several months now. What's your opinion of it?
Wolff: I think they do an inestimable job. I think they're terrific.
IWM: But in light of what you just said, does their outlook appear cloudy?
Wolff: Well, the outlook isn't good for anybody who is trying to create media products
in this medium. Obviously, they know that and have taken steps to create a traditional
media product [a print magazine]. But it's a real competitive area. Even on the offline
side, there is not a monumental advertising base, certainly. And so you're into the
subscription business, and the subscription business is a hard business.
IWM: Are e-books ever going to take off?
Wolff: I think the e-book is a smart and attractive notion. And it does have some
inevitability to it. In other words, you can create cheaper books. Remember, the book
market is big. There are tons of reference stuff that would be significantly more useful if
it were in searchable form. If you can create a technology that allows you to transfer
information in a significantly more economical way, it's very powerful.
IWM: What do you think of NBC's plan of adding 10 minutes to "Friends" to fight
CBS's "Survivor"?
Wolff: I guess adding 10 minutes to an old hit show is easier than creating a new hit
show. But there's a broader question that has to do with the change of the television
market, especially prime time. We still have a three-network model. The assumption is
still that you have a 90-plus percent share of the market. And that is falling day by day.
So what do you do about that? Ultimately, you have to produce cheaper shows. The
true triumph of "Survivor" and "Millionaire" and this kind of stuff is that they're cheap to
make. And on top of that they're wildly popular. But even the most popular show at the
moment is just a pale reflection of what top-rated shows were in the heyday of the three
networks. ... And I'm not sure how popular this "reality" stuff is. It's a novelty at this
point. I think that part of why it's popular is just "give me something new."
IWM: Oprah and Martha Stewart have inspired very successful magazines.
Rosie's is coming soon. Why are celebrity-branded magazines appealing?
Wolff: When you create media products, one of the most difficult things is to rise above
the clutter. It's obviously easier if you start with a concept that a lot of people know.
Add to that, these people come with a built-in promotional mechanism. How did Howard
Stern and Rush Limbaugh become best-selling authors? Part of the reason is that they
had radio shows. But these things work once, then they work twice, then they don't
work anymore.
IWM: The Internet's golden days apparently are gone, at least for a while. What
do you think the future holds for the Net?
Wolff: I think it will be a powerful infrastructure that all businesses will take advantage
of. All businesses will in some sense build themselves around it. But the notion of the
Internet as a discrete business is gone. It is merely a facilitating technology. Think of it
as like the telephone. It does its job, but we don't credit it with special properties of its
own.
IWM: How can traditional media make the Web work for them?
Wolff: Number one: it's potentially a way to move your product faster and cheaper.
Number two: it's probably a relatively efficient way to create a closer relationship with
your audience. I think it will be an effective kind of collateral media.
IWM: But as a stand-alone media business, there's no future?
Wolff: None. Forget it.
IWM: So I suppose content sites need to have a print counterpart if they expect
to be around?
Wolff: Can they be around as a specialized product that's available in electronic form?
Yes, I think that they can. But we're talking about a very, very, very small operation. |
