If proof was needed that change is afoot in the worldwide media industry, it came in the form of late alterations to a panel on the subject at the HBS Global Alumni Conference.
CEOs Jean-Marie Messier of France's Vivendi and Thomas Middlehof of Germany's Bertelsmann bowed out of the panel, titled "Linking the Globe: The Role of Media and Communications," amid deals-in-the-making. (The most notable of these, Vivendi's acquisition of Canada-based Seagram, was officially announced just after the conference.)
But both media chiefs were ably seconded by top deputies who joined Reuters CEO Peter Job from the U.K. and the panel's moderator, HBS Professor Debora Spar, for a look at the critical role of the media industry in how today's global information revolution plays out.
"The media industry," said Spar in her introduction, "has been punctuated by a very small number of very sharp and very important junctures."
The first critical juncture was the invention of the printing press, which made it possible to have a media industry to begin with. The second major juncture occurred with the rapid development of new technologies between 1850 and 1920. First came the telegraph, which led to the development of the modern newspaper industry, and then radio and motion pictures, which together created the first real mass entertainment market.
There followed a period of evolution, said Spar, which included the development of television, critically important commercially, but even more so politically.
The third critical juncture, she said, is where we are right now with the information revolution, the impact of which will be particularly important in the media industry. "Media is about information," she said, "the control of information, the provision of information, the sale of information."
This juncture, added Spar, raises several key questions:
- Is selling information different from selling other kinds of goods and services and, if so, how?
- Is selling information different in the 21st century than it was in the 19th or 20th?
- How international can a global media company be? What are the boundaries?
- What are the political implications of global media and how will media play a political role?
The Reuters View
Reuters CEO Job said the Internet is changing everything, especially the global role of media companies. For years, he said, the media industry has operated in a very fragmented economic structure that gave an individual company "a perverse incentive to defend its territory instead of attacking globally."
That is coming to an end for the news business with the expansion of the Internet, he said, for a number of reasons.
First, the 'Net removes the "tyranny of distance." "Life is not limited by national boundaries on the Internet, nor is it limited by how far a van can travel in the night to deliver a newspaper."
Second, it removes the "tyranny of time." "Today, people are used to getting information when they are doing something else. Today, deadlines are just what they say—they're dead. Old wine matures and gets better, but old news is just late. We're into real-time information on demand any time you want it."
Third, said Job, "A whole new generation is being encouraged to think of news not as something which goes with toast and marmalade, but as something which is critical to performance."
The news and media leaders in this new environment, said Job, will have to meet three key requirements.
First, they will have to provide real-time information on demand, anywhere, anytime and in any form of multimedia.
Second, in addition to information, they will have to provide software capabilities, such as allowing a transaction, that make it possible to use that information to enhance performance. "I think what e-commerce is really about," said Job, "is reducing the gap between thought and action, between when you know something and when you do something about it."
Third, he said, is a relevant brand that gives people confidence in the information they get. "Since people are going to act on information, they are going to rely on the facts and the information they receive."
The most likely players to fill these needs, said Job, are combinations of old and new media franchises. This has already started to happen in the U.S, he said, but we shouldn't be surprised if it is taking a bit of time.
Content Out Of Control
Filling in for Bertelsmann CEO Middlehof, the company's Chief Creative Officer, Rolf Schmidt-Holtz offered his own view of how the Internet has changed the media business.
"Four hundred years ago, one individual could reach with his voice some 100 people, not more," he said. "With book printing, one single person could reach, at least theoretically, everybody.
"Today, with the Internet, everybody can reach everybody any time at any place. The individual is a content provider and a content receiver at the same time. That means content is everywhere. For publishing houses, content is out of control."
The true secret of the Internet, said Schmidt-Holtz, is the focus on the individual. "Media companies have to react to this fact and offer the customer new packages of content, custom-tailored content."
That includes, he said, making businesses "glocal"—a combination of global and local.
For example, "In Europe, soccer is big, so as a publisher if you decide to launch a magazine, you can distribute it throughout the continent. But you have to adapt it. You have to translate it. In Italy, you put the Italian soccer star on the cover; in England, the English one; in Germany, the German one. Otherwise people don't buy it."
"The Internet is Hell," he said, "but it gives us a chance to reach each one of you everywhere at anytime."
Marketing Still The Key
Vivendi COO Eric Licoys, who arrived direct from Paris after the other two speakers had finished, addressed the differences between selling information and other goods and services.
"I don't think that selling information is so much different from selling goods and services," he said. "The marketing is the key. You need to catch people's attention. To inform is to be close to people's needs and to understand how those needs change."
The Web, he said, is only increasing the role of marketing. "In the trade publishing world, information is collected, packaged and distributed to consumers. The editor has made the choices. The consumer is left to see what someone else has seen fit to print.
"In the new world, it starts with the consumer. What is he or she interested in? The challenge for publishers is to develop the model that matches the right information with the right person at the right time."
As for the contrast between selling information now and in the previous centuries, the major difference, said Lecoys, is the ever-expanding supply of information and the growing competition between information and entertainment.
In this environment, he said, media companies must "create meaning" for "a multimedia culture bombarded with information but lacking in knowledge."