The following graph is from Fortune’s article entitled How Facebook is taking over our lives, and I must say: this is the most impressive part of it.
Like anything else, taken to the extreme, there are ill side effects with Facebook and social networking in general. This morning I read how a study points out that Facebook infantilizes the mind, and I won’t lie, it sort of reminded me of the music video/comedy clip we recently produced which actually captures the spirit of the study well. Enjoy:
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterTotal ad spending — online and offline — is expected to fall 7% in 2009. This is a direct result of the economic meltdown, no doubt, but while traditional media will certainly not return to the pre-crash levels, there is reason to believe that online media will come back even stronger, because when the economy recovers (basically, when your toddler gets engaged), the spoils will go to online media. But right now, for an entire generation of executives and entrepreneurs, it’s a constant struggle, not to thrive, but merely to survive.
From AdAge:
- “Online advertising isn’t immune to the recession, and it’s only just begun.”
- “Like in 2001, online media is fighting for its very existence.”
- “There are companies that are going to go out of business this year,” said David Moore, chairman of WPP’s 24/7 Real Media.
The following is arguably the most important thing I’ve read in ages, and every media executive and entrepreneur needs to print it out and stick it everywhere:
- “And at least one speaker suggested publishers face extinction if they think advertising is going to save them. Bob Carrigan, CEO of tech publisher IDG Communications, said he no longer sees traditional advertising as a growth business. Rather, his company is relying on lead generation and an ad agency-like “media services” division that creates custom websites and custom content to pay the bills.
“We love standard media and sell ads all the time,” Mr. Carrigan said. “But we’ve seen a lot of companies become extinct or on their way to extinction because they protected their legacy businesses too much.”
What does this mean to your business?
1 -The Metrics That Suddenly Matter?
Considering that all of a sudden, ad-supported models are out of vogue, are unique users, pageviews, impressions and even average time spent on a site less important? I am not sure if this is the case for your business, but it is for us. I tell anyone and everyone who cares to listen about WatchMojo.com’s surging all-time and monthly streams, but those matter if we lived in an ad-supported ecosystem. The truth is, what drives our top line is licensing revenue (guaranteed deals), so the key metrics are quantity, quality and frequency of videos.
2 - The M&A Game as Survival?
Equally important, if everything media companies have done in the past few years are based on the desire to maximize value in an ad-supported model and ads shrink and dry up, then maybe all companies need to be in constant M&A talks so that they are in a position to partner with others, hoping that this would increase their odds of survival.
This has to be one of the best lines I’ve read in a while, from SAI’s Nicholas Carlson’s piece on succession planning at News Corp.
Know what happens when a boxing referee slips between the ropes and out of the ring in the middle of the match?
A hint: The brawlers don’t suddenly stop throwing punches.
News Corp. is indeed a sprawling empire, check out the numerous aspirants to the title:
# Fox News boss Roger Ailes “would kill anybody” says our source. “He’s the Dick Cheney of News Corp.” In the past, he’s said if he were younger he would want to take on Hollywood. But he’s happy printing money where he is.
# Co-chairman-CEO of Fox Filmed Entertainment Jim Gianopulos is a “street fighter, ruthless.” He’s “Rupert’s kind of guy. He runs through walls.” He’s probably News Corp’s top business guy in films. He doesn’t care about TV.
# President, Entertainment for the Fox Broadcasting Company Peter Liguori will probably be the odd man out.
# Dana Waldman, co-president 20th Century Fox Television, is “shrewd and tough in creative.”
# Chair of Fox Sports David Hill is a long-time Rupert soldier. But the old Aussie probably won’t end up doing anything new.
# Rupert’s son James Murdoch reminds people of his dad, says our source. He asks good questions, has no ego (well, there’s one difference), and is a great listener. “He has no pretensions.” Because of the obvious nepotism, people questioned his merit when he took over Sky in Europe, but the internal consensus is that he did a good job there. “He did Sky and now he’s learning the rest of the world. You have to respect that.”
# Rupert’s other son, Lachlan, is not considered a player, however. A “doofus.” He’s a “great guy to go drinking with,” but when he went up against Roger Ailes in a few political battles early in his career, “Roger tried to kill him. It was like Trevor Berbick versus Mike Tyson.”
# Watch Rupert Murdoch’s wife Wendi when Rupe goes off to that big newsroom in the sky, but not yet, says our insider. She’s still enjoying going to parties and traveling all over the world for now. But “make no mistake, she’s ambitious.”
# MySpace CEO Chris Dewolfe’s not to be underestimated, but “the bloom is off the rose.” Rupert doesn’t like two things: Getting beat and seeing execs in the press. Facebook is beating MySpace and profiles and interviews are everywhere all the time. He went to Davos this year. A bigger role in operations is not in the cards.
Now call me crazy, but while Rupert Murdoch is almost 78 (he was born March 11 1931) and his father passed away at 67, his mother is nearly 90, so methinks Mr. Murdoch will actually outlast all of these men and women, and then some.
Disclaimer: News Corp. bought IGN, which bought my old company where I was a partner and minority shareholder. I could have stuck around at FIM and had a decent corporate career, but I left to start WatchMojo.com. Noteworthy in all of this is that News Corp. sued us in 2006, claiming I violated my non-compete… but I fought back, represented myself in court and won the trial… We now have a distribution deal with MySpace TV.
But… reading Carlson’s post, it reminds me why I got the hell out of corporate life: the politics, the backwardness of fiefdoms and turf battles. Check out this WatchMojo.com video which outlines the company’s past and how the various units came to be:
Reading Andrew Chen’s Which Startup Collapse Will End the Web 2.0 Era, I could not help but think about how in the dot com boom, financiers and entrepreneurs rushed to take an idea from a powerpoint presentation to an IPO in a ridiculously quick time span, which explains why all of the high profile dot coms bombed.
This time around (web 2.0), it wasn’t all that different. The only difference, really, was that instead of drowning a napkin with capital and hoping that money could make up for time, we thought that free software and cheap hardware could make up for time, and money.
Time and money have always been inter-related, hence the time value of money concept.
Now that we’re clearly in a recession, deflationary period, or outright depression, you have to wonder: can you actually win by scaling quickly, or are you in fact better off managing the clock and winning by attrition?
Last week, I read that Mania TV was on the auction block looking to sell for cheap. Mania TV was one of the first companies that I came across back in 2004/05 that made me think: oh, look, online video content can work. However, I thought Mania TV suffered from a multiple personality, where they went from wanting to emulate MTV, to dabbling in Hollywood too much, then to becoming Yet Another UGC Site, to then morphing into an Aggregator, only to return to their original content creation roots. It’s a shame. I really hope they survive and thrive.
But in that process, they plowed through $24M in funding, making it nearly impossible to provide a realistic exit for investors, and in turn, in this economy, rendering them unable to raise an additional penny. I hope they survive, but I am not sure they will. However, even the most recognizable Web 2.0 brands have in fact raised boatloads, be it Digg, Slide, or many others that come to mind.
As such, if we are to learn from history then, the way to build a company is not to drown an idea with capital and try to make up for the time it takes to go through the motions and learn what works in an industry, at a given time, for a given company, but to actually grow up in a natural, healthy way.
Getting back to Allen Chen’s article about the companies that might indeed crash and burn and end the Web 2.0 era, look out for the following characteristics that he lists:
- Started in 2004-2007, and
- Self-described as Web 2.0 startups
- Have grown to lots of headcount, let’s say >40 people, which can burn through a $5M Series A in under a year
- Substantial traffic, let’s say >5 million uniques per month, which drives up the cost structure
- Ad-based business models, which rely on big sales teams calling up agencies (whose pockets are now reduced, if not closed)
- Low-context advertising inventory, with low CPM in sectors like communication and entertainment
- Mature internet sectors, where the upside is now established, and acquirers are less likely to pay up as a result
- Not a leader in their category, where they may be #5 or higher, and investors may be unlikely to keep supporting their growth
- Media content hosting, where they allow users to upload, host, and stream content without charging a dime, which also drives down the cost structure
Read the whole piece here. Sometimes you win by having vision, ambition, execution… other times, it’s luck… and timing!
Learn to manage the clock. Winning by attrition is winning nonetheless.
