Media Vampires and Zombies

Google are Vampires, notes an article in the WSJ:

In a keynote speech at the annual PricewaterhouseCoopers Entertainment and Media Outlook event Tuesday, Dow Jones Chief Executive Les Hinton raised the rhetoric a notch, calling the Internet search giant a vampire “sucking the blood” out of the newspaper business, and promised that new developments would level the playing field.

“There is a charitable view of the history of Google,” said Mr. Hinton, who is also publisher of The Wall Street Journal. “[It] didn’t actually begin life in a cave as a digital vampire per se. The charitable view of Google is that the news business itself fed Google’s taste for this kind of blood.”

By offering its content free on the Web, the newspaper industry “gave Google’s fangs a great place to bite,” he continued. “We will never know what might have happened had newspapers taken a different approach.”

While there is some truth in this, one must point out that these companies were paying massive salaries and bonuses to attract "the best" and buying the best Financial, Management Consultancy and Legal advice money can afford, so its not as if they did this in ignorance. In other words they have to an extent been architects of their own destruction.

(Though we would argue that using top blue chip "Mainstream" soothsayers won't give you good advice to deal with disruptive new players, as these people don't understand them - but we would say that )

The uncomfortable truth - blatantly obvious to anyone who understands the economic structures on new media - is that most Old Media is sitting on cost structures and working practices that the New Media can run rings around. If I may wax historical, this is not the first time a new, more efficient comms industry attacks an older one with new technology, and so the lessons are there to be learned - but the pain required to change is such that it is virtually impossible to contemplate internal reform, until eventually via bankruptcy they go to the knackers yard of history.

Now they can stave off the inevitable for a while by using incumbency power to change regulation etc - and I think they actually have a point re Google, in fact I think there is an anti Trust case to answer there - but these are short term fixes. If the economics are not on their side, they will eventually die. Its just that they die when the current crop of senior execs are retired, so this is just an "Apres Moi le Deluge" game that prevents the current CXO crop from facing the consequences of the actions of the last 10 years.

If they do not, reform to face the Vampires therefore, the risk they face themselves is that they become media Zombies - companies stumbling along, not really alive, but not quite dead yet.

(I will be talking about this in more detail at the Media Futures conference next Friday)