The New York Times’ Richard Siklos has this article today about how big media companies are turning to corporate strategies that were once unthinkable. AOL, News Corp. and Disney have all made “bold” moves that Siklos says are new tactics born out of the need to pump up lagging stock prices.
That’s true, but Time Warner’s plan to make AOL free, Murdoch’s goal of merging DirecTV and EchoStar and, to a lesser degree, Disney’s acquisition of Pixar — three examples Siklos cites as evidence of these brash new plans — were, directly or indirectly, spurred by the rise of broadband. AOL could no longer compete in the narrowband world it grew up in and the DBS companies can’t compete with the triple-play offerings of cable and phone companies.
Murdoch hopes that that regulators will see that the rise of broadband-delivered video will change the antitrust calculations when it comes to government review of a possible merger of the two DBS providers.
But Mr. Murdoch is now arguing that a merger is viable because the world has changed with the advent of Internet video and the nascent entry of telephone companies into the video business. “I think it would be much harder for the government to turn it down today,” he said.
Whether these strategies work, it’s clear that technology won’t let even giant media companies coast.
Everything turns in cycles, of course. The list of former chieftains and moguls now on the sidelines because of their flights of visionary thinking is a long one. Whatever its outcome, the new strategies unfolding at AOL, the News Corporation and Disney are shining examples that bold is back and staying the course is no longer an option. Hold on to your hats.Posted by Cynthia Brumfield at 9:08 AM | Print | Comments (0)
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