Category Archives: General Chaos

General Chaos

Hope for small media (or why AOL-TimeWarner Sucks So Bad)

The merger of Internet-service-for-the-masses purveyor America Online and print/television/film media for the masses purveyor TimeWarner has, thus far, been a textbook M&A failure. The reason is simple–the company's been doubly slammed by the advertising drought over the last year because of its (a)attempt at mass appeal and (b)a bloated, corpulent heirarchy that, like a dieter being driven by hormones, just can't deal with this lean advertising market.

The ironic thing is that the cycles of capitalism may prevent what free speech advocates fear–the gobbling up of all media by giant conglomerates in search of synergy. The most profitable broadcast company right now is NBC, which -isn't- owned by a media conglomerate (though it is owned by GE). That's because it doesn't go after the broadest audiences with its programming, (as Joe Flint noted in his Wall Street Journal article this week).

Newsweek is another example–it's gaining on Time in revenue, and uses its smaller circulation as a weapon against the red-bordered big book of mediocrity. Online synergy? It hooked up with MSNBC.

Disney has similar problems to AOL-TImeWarner; its ABC is a money pit; it sucks as a whole, and Disney's heavy corporate hand has destroyed ABC's credibility as an independent media outlet (just look at the vacillations over Nightline). But it pulls its chestnuts out of the fire with its movies (as much as I hate Disney personally, I'm definitely going to see Lilo & Stitch” this summer). What's Warner got going for it? Scooby Doo?

You'd think AOL would bring in steady revenue with subscription fees, at least–right? Well, considering how much churn the company generates with all those free hours it gives out on all those CDs it sends out (I use mine for coasters), it probably spends most of what it makes on the subscribers it keeps on marketing costs. And while the service is still popular, it's most popular with people who don't have broadband–and thus with people not in the most profitable online demographic. The people who do use AOL on broadband do it mostly because they have been forced to, or they just don't know any better. The most successful AOL broadband service is instant messaging– which is free to users and depends on advertising for revenue (or at least chargebacks to the AOL-TimeWarner units that advertise on it).

Plus, AOL sucks. Thus the churn.

So there is some hope out there for small media. The lessons of the marketplace are pretty clear–find something you're good at and an audience you can easily define, and you will survive (and probably make money). Go for the lowest common denominator, and prepare to be a loss leader.

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Administrivia, General Chaos

The Shadow of the Valley of Tech

Reminders of just how not over this recession is–at least in the publishing business–keep turning up on a daily basis.

I was doing some browsing through my logs this morning and found a refer to my site from Drive-Thru.org, which turns out to be the weblog of an old CMP colleague, Mitch Wagner. Mitch is a tech-publishing veteran–he left InformationWeek about the time I joined it. Unfortunately, he went down with theInternetWeek ship, as did my friend Steve Zurier (who has done two exceptionally good deeds for me: he gave me the name of a divorce attorney, and then was my best man when I got married again).

Seeing Mitch's blog reminded me again how lucky I am to be gainfully employed. A lot of former colleagues in the magazine biz are still out there looking for work. All the members of my entire team from InformationWeek Labs (excepting myself) are, last I knew, between full-time gigs. Cynthia Morgan, once editor of Byte and late of Techies.com (another friend who, like Zurier, worked with me at GCN) has gone to the dark side and now works for Intel (though I guess that counts as gainful employment).

Right after I left Fawcette for my current gig, my first boss there, former FTP VP of Publishing Jeff Miller (another ex-CMP'r), was purged. Soon after, the publisher of my magazines at FTP, Jeannine Barnard was laid off, to make room for a more senior publisher whose book had been scrapped.

Of course, here at Ziff, there's been a whole bunch of people have been released into the wild over the past year, too.

This has been probably the worst body slashing I've seen the tech publishing business go through since 1991, if not ever. And I don't see there being a significant upside to this trench we've been in; I think tech publishing as we knew it in the mid- and late 90's is gone for good.

I don't see anything coming along to replace the networking books. Wireless looked like it could be the next big thing, but it's now looking like it will continue to be the next big thing for quite some time; sure, 802.1x is great, but there's not enough there to base a magazine on. And the beige box books are hurting, too–the merger of HP and Compaq has effectively halved the number of big advertisers in the corporate PC market. And with general biz publications like BusinessWeek and the Wall Street Journal providing more and more tech coverage,–and competing for the little big-market tech advertising that's left out there– the big IT newsweeklies are taking it in the shorts.

So what's the future?

Smaller magazines. More niche publications. More magazines with a limited life span. Fewer issues, with content online to keep readers hooked in between. More web, less frequent hardcopy.

The publication I'm with now, Baseline, is (currently) successful because it goes after a tight demographic market that has money, and presents information in a form that, in some ways, competes with folks like Gartner and Meta–and provides it free, with advertisements interspersed with the copy. Hardcore content, distilled and targeted, is what magazines do best. But the magazine is a monthly publication. We don't do “news”–we leave that to the weeklies (and the Web). We do drill-down, which doesn't work as well on the Web.

This isn't a good model for people who liked big magazine staffs and big freelance budgets. Advertising pages will only regain their value through scarcity, the publishing industry will find. That means a lot of people who've found themselves released into the wild over the last year won't be coming back to work in this business–just like most folks laid off in the Valley won't be going back to work at dot-com startups.

In the long run, that may be a good thing. In the short term, it sure doesn't imbue much of a feeling of job security. But. like Pat Green says, I'm still here. I plan on fighting it out where I am for as long as I can, because, honestly, there isn't much of a job market for technology journalists anywhere else, and my pottery isn't selling near well enough to make a living off of .

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