ON WAITING FOR MORE THAN DOUGH ON THE WEB

CALL TO ARMS

The New York Times has a timely article this weekend in their "Money" section, titled "Waiting for the Dough on the Web". 

The piece mainly looks at all the internet initiatives and acquisitions by media incumbents of late, and asking the implied question, "Where is the BIG money?" 

As author Richard Siklos explains:

"...lately, I've been getting a few versions of this: "You talk to a lot of the traditional media companies. Who do you think has got this Internet thing figured out?"      

That is a tough but very pertinent question, given all the digital hurly-burly of the past decade or so.

Rupert Murdoch and the News Corporation, for instance, get points for their speed and resolve to gain traction online. The company's moves have included the purchase last year of the teenage hangout MySpace.

Robert A. Iger at the Walt Disney Company is notable for being the first to put television shows, his from ABC, on iTunes and then to try streaming them on the Web, supported solely by sponsors.

Time Warner has the AOL paradox on its hands: it owns one of the top Internet destinations but is clouded by the service's daunting business challenges.

Viacom has made some small but clever acquisitions — Neopets and iFilm, for instance — and has a proven record for knowing what young people want and giving it to them on MTV and Nickelodeon.

Among newspaper companies, I'd posit that the Washington Post Company and Dow Jones — and, yes, The New York Times Company — stand out for their online strategies.

And, for cable television channels, CNN and MSNBC seem to have staked out prime real estate online.

But one could make a case that the amount of focus on — and hype about — Internet activities at media companies has some kind of inverse relationship to the amount of near-term revenue they represent for these companies."

Reading through this semi-comprehensive list provoked ANOTHER question in my mind. 

Never mind the revenues and profits, which as a shareholder in some of these companies, I would also like an answer to as well...but WHERE IS THE INNOVATION to date by the incumbent media companies?

Admittedly, some of them deserve some credit for having the gumption to scoop up some promising, innovative companies like MySpace, Neopets, and the like, with alacrity unusual for their size and stature. 

But to paraphrase Cuba Gooding and Tom Cruise in Jerry Maguire (picture via Google Images):

"Show me the Innovation!"

I mean the web and it's constantly evolving technologies, along with it's broad implications for media and other industries have now been with us for over a decade.

The incumbents have studied and re-studied, bought and sold, poked and prodded these various technologies to death, over the past decade.

While many of these technologies are threatening to their incumbent business models, many are also well-suited to augment and expand their market-leading, huge cash-flow generating, off-line businesses.

Now we've seen the incumbent media companies' peers and competitors at the big, incumbent internet companies (aka the GYMAAAE gang), do their share of internet acquisitions.

But we've also seen the GYMAAAE companies trying to do some innovative stuff as well.

And as we've seen so many times in the past, successful innovation does bring financial success, as do successful acquisitions.

So while the laundry-list of the companies cited above are doing more than their fair share of the latter, it'd be nice to see them do some of their share of the former.

Comments

[Jim Norton]

It's not unusual for large companies to buy their innovation rather than grow it. Buying market tested new ideas is a wonderful idea for companies that aren't really capable of handling the experimental model like newspapers. If you manage a large company you should be looking for small firms who have found something that you can grow. Nobody has corner on the market for good ideas.

Innovation comes easier to small organizations because good ideas rise quickly while junk falls by the wayside. GE buys up small companies at an incredible rate. There are people who have made entire careers of innovative companies that they have sold to larger companies.

[Christian carter]

While many of these technologies are threatening to their incumbent business models, many are also well-suited to augment and expand their market-leading, huge cash-flow generating, off-line businesses.