Television Is the New Television by Michael Wolff

Author:Michael Wolff
Language: eng
Format: epub
Publisher: Penguin Publishing Group
Published: 2015-05-25T16:00:00+00:00

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CONSOLIDATING CONSOLIVISION

It was a curiously winding road for the television business to actually understand it was in the television business.

Starting in the 1980s, the idea of the “media business” became something like a unified field theory. Except, in fact, there was little unified about this business. There were publishing businesses and there were entertainment businesses. There were movies, supported by ticket sales; there was television, supported by advertising. There were large consumer magazines supported by national advertising; there were newspapers supported by local retailers and classified listings. There was a production business, and then a mostly separate distribution arm. There were books, a unit sale business. There was radio. There were billboards. Even a classical theory of horizontal integration wasn’t going to bring many of these disparate disciplines into alignment or a logical relationship.

It wasn’t so much a theory or a plan as it was the ability to finance acquisitions that brought the whole lot together. It was a grand scheme of opportunity and dominance, most of all envisioned by Rupert Murdoch, who, in addition to having the appetite and imagination, had, with his base in Australia, and his ambitions around the world, an accounting trick to finance it all. Under Australian accounting rules, aspects of what would otherwise be regarded as debt were regarded as equity—hence you could continue to borrow against it—and the value of “goodwill” remained on your balance sheet and was not, as it is under standard rules, depreciated.

In little more than a decade, he transformed his company from a newspaper publisher to an international magazine, television, movie, satellite, and book company, creating, from a hodgepodge of largely unrelated businesses, the media business.

A series of competitors followed suit, gathering virtually all movie studios; television networks and stations; major book, magazine, and newspaper publishers; cable programmers and cable and satellite systems; and, too, radio networks and billboards companies, comprising hundreds if not thousands of separate entities, under the effective control of a handful of companies: Time Warner, Disney, Viacom, News Corp, Comcast (magazines and newspapers were consolidated under Advance–Condé Nast, Hearst, Tribune, Gannett, and radio under Clear Channel).

There were a variety of screwball rationales to this. There was the one broadly known as synergy—companies that both performed different functions or that were competitive with each other would work together—that would quickly become a punch line. And then there was the visualization that saw audiences fracturing but being regathered by merely buying them back as they spread—an improbable notion, which, anyway, soon met the Web.

Digital competition, changes in the advertising market, the collapse of the music and print industries, and the fracturing of television had, over the last ten years, both a paralyzing and transformative effect on these big companies. They were paralyzed because vast parts of their empires were under siege—clear to all, these outposts would be lost. Beyond managing decline, and hoping for some fortuitous intersection with digital media (Time Warner lost five years in its merger with AOL; Viacom fired its CEO, Tom Freston, for

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