In Bob Garfield’s Chaos Scenario 2.0, from Advertising Age, Garfield summarizes in one place what I’ve been writing for several months about layoffs in traditional media and their plummeting stock prices and market valuations.
In December 2005, Viacom spun off CBS, the so-called Tiffany Network, lest the broadcast business impede growth and depress shareholder value.
Just before Christmas 2005, Time Inc. laid off 100 employees. Just after Christmas, in January 2006, Time Inc. laid off 100 more employees. In April 2006, Time Inc. laid off 250 more employees — the last round of job cuts, the company said. In January, Time Inc. laid off 300 more employees. No wonder. Since 2001, Time Warner’s market capitalization has shrunk to $82 billion from $193 billion.
Last fall, ostensibly to promote their new seasons, five broadcast networks bypassed their local affiliates and gave away new programs online.
In October 2006, NBC announced a $750 million cost cutback, including 700 jobs and a moratorium on scripted programs in the first hour of prime time.
In November 2006, Clear Channel — the boogeyman of media consolidation — sold to private-equity owners and declared that it wants to unload its TV and small-market radio stations. The sale fetched $38 a share. In 2000, the stock sold at $100 a share.
The Minneapolis Star Tribune, acquired by McClatchy in 1998 for $1.2 billion, was sold to private investors in December 2006 for $530 million.
In 2000, Chicago-based Tribune Co. was valued at $12 billion. It then bought Times-Mirror Co. for more than $8 billion. At this writing, with Tribune Co. for sale as a whole or in part, the value of the merged company is $7.34 billion.
YouTube. Two years ago, it — much less Joost and Revver and Brightcove and the online-video industry in general — did not exist.
And of course, the Tribune deal went down just last week, with a creatively financed $8 billion package, or roughly what Tribune paid for the Times-Mirror in 2000.
Shel Holtz is right when he says new media don’t make old media obsolete, but the old media adapt. The question Garfield raises is whether they will adapt quickly enough to remain economically viable in the long term, or whether they will put on a brave face as they steam toward the iceberg, not wanting to alarm the passengers/advertisers.