In today’s (Sunday’s) New York Times, Richard Siklos has this good round-up of traditional media companies that are making headway in establishing web-based businesses. He cites News Corp. (especially News Corp.), Disney, Time Warner, Viacom, the Washington Post Company, Dow Jones Company and The New York Times as stand-outs in making the migration work.
But he also raises questions about how little money these giants are wringing out of the web.
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.
We’re still in the early innings, but given how much the Internet has already transformed the media and society, it’s surprising how little money traditional media companies make directly from it.
Don’t take my word for it. Flip through the financial statements of some of the biggest names to see what they say about their Web sales and profits. You won’t find separately broken-out figures at Disney, Viacom, or Time Warner (aside from AOL).
Siklos concludes that the Internet is still little more than a cross-marketing prop, a mandatory promotional vehicle for these companies’ more established businesses. But, that’s the nature of any growth business — it doesn’t spring out fully formed and at all at once.
In the mid-1980s, cable networks were rapidly emerging as rivals to the dominant broadcast television networks. Back then, and for some years to follow, conventional wisdom held that the cable network business was a long-term money-loser — no one, not even Ted Turner, was making money with cable networks. Cable programmers actually paid cable operators for carriage, and then had to drum up ad revenue to cover their costs.
Then, the tide turned, cable operators started paying cable networks, and even small channels turned out to be big assets (Fox sold the Family Channel to ABC in 2001 for $3.7 billion.)
The Internet is different, of course, a far more volatile and unchartered marketplace. Still, like the nascent cable programming business in the mid-1980s, the Internet world is new. It might take years for the big bucks to roll in.
Posted by Cynthia Brumfield at 10:44 PM | Print | Comments (0)
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