The fascination with Rupert Murdoch was center stage during a discussion on old media vs. new media at the SIIA Information Industry Summit. When Tribune CEO and chairman Sam Zell’s name came up — he was initially scheduled to represent newspapers – during a discussion about the death of newspapers, Alan Patricof, founder and managing director of Greycroft Partners, pointed to News Corp.’s $5.6 billion buyout of Dow Jones (NYSE: NWS). (Disclaimer: Greycroft is an investor in our parent company ContentNext Media.) The New Yorker‘s Ken Auletta nearly jumped out of his seat: “You’re not bullish on newspapers, are you?” Not exactly, but Patricof seemed to be having enough of “the death of old media” theme. Clearly, newspaper properties must have some way of transitioning to the digital age to warrant two such large investments as Tribune Co. and Dow Jones. Some other points raised during the panel:
— Magazines still viable: Jim Kelly, managing editor of Time Inc.: Major magazine titles are still viable and able to take advantage of interactive media. For example, about 1.5 million people are willing to pay $109 annual for People magazine. But when it comes to maintain that viability, digital elements as absolutely essential — and managing those elements are crucial. “Each magazine have been trying to find its own digital future. The top-down approach when AOL (NYSE: TWX) and Time Warner merged didn’t work.” But the challenges are different and coming from unanticipated areas, such as phones and advertisers themselves. Johnson & Johnson set up BabyCenter; it was a direct reason Time Inc. sold its Parenting magazine last March.
— Murdoch’s secret: Michael Barrett, EVP and chief revenue officer for Fox Interactive Media: Streaming episodes can net $80,000 versus the millions for TV revenue. “So it’s a disruptive, not destructive model. It is destructive to the music industry. But for us, we are seeing some returns.” When the panel debated what makes Murdoch so special, Barrett boiled it down to having the capital and confidence of the board that allows the company to move quickly and determinedly, whether its acquiring Dow Jones or adding American Idol to its tv network. “Other companies get bogged down for a long time, having to appease their boards. Rupert can act fast without being held back.”
— Terror: Ken Auletta, The New Yorker media columnist: While the rest of the panel expressed confidence on old media being able to navigate the new media landscape, Auletta offered another view. “My colleagues are a little too sanguine. I never met anyone at any media company who isn’t terrified. Newspapers — FT and WSJ excepted — are all terrified. Advertisers are also terrified that Google’s (NSDQ: GOOG) data might erase their value. Go down the list: music and movie executives are terrified of piracy… The critical question for media companies: are they willing to try something new and perhaps jettison some old businesses? Most companies are wedded to the old ways and are gingerly trying new things.”
— Engineering, not a media culture: Old media’s problems stem from a lack of real understanding by those in charge, Auletta said: “We’re in an engineering culture. You couldn’t put a Murdoch or an Eisner in charge of a company like that. It’s been tried. Terry Semel led Yahoo (NSDQ: YHOO). I just spent some time with Google engineers. I couldn’t understand a thing they were saying. I don’t think [Semel] understood the engineers’ language, so he couldn’t challenge them. I suspect that’s one reason he didn’t last.”