A dangerous overtaking
In 2017, the value of web advertising will exceed the value of television advertising. Something that could be equivalent to the shooting of Sarajevo. There will be war, then carnage, then a reorganization of the whole media industry and finally a consolidation with a few winners left. The war will be fought between the traditional media conglomerates and companies and the new Internet realities that innovate furiously and irreverently, disrespectful of any social and economic consequences. The latter have the wind in their sails because they can count on the unscrupulous support of venture capital which pours immense resources into them. Those resources which, on the other hand, it denies to traditional companies. There will not only be a war between two well-defined armies, it will also be an internal war with unpredictable cross-party alliances.
Stockholders of traditional media groups, who have so far been rather quiet if worried, are starting to lose sleep and the few hours of rest make them unheard of nervous about the assets invested. If there are no changes, drastic decisions will follow. This is the omen of Shane Smith, CEO of Vice Media.
In 2016 there have already been signs of it, as were the Balkan wars before Sarajevo. We see below the most significant ones which, as usual, begin to manifest themselves in the leading country, the United States, and will then extend to all advanced capitalist countries.
Gawker and the Billionaire
Gawker Media, the online news hub, was bought by Univision, the Hispanic TV group, in a bankruptcy auction after a Florida judge handed the group a exemplary fine. The judge had found him guilty of having published, without the consent of the interested parties, an explicit video of the wrestler Hulk Hogan in a very private act. Hogan's cause was financed by Silicon Valley billionaire, and early Trumpian, Peter Thiel to whom Gawker, a few years earlier, had put pebbles in his shoes. The same law firm that assisted Hogan was hired by Melania Trump to blame the "Daily Mail" for having hinted at his possible escort activity during the XNUMXs. The same did Rober Ailes, ex-boss of Fox News, against the "New York magazine". These publications are warned: they will go the way of Gawker. "Daily Mail", for example, retracted and closed the matter there.
Gawker, who embodied the most anarchic and disrespectful part of the web, has as many detractors as he does admirers. Among the latter is Farhad Manjoo, the media columnist of the NYTimes, who wrote a veritable Homage to Gawker acknowledging to its founder, Nick Denton, the merit of having understood first of all how the network wants news and of having invented a seminal format which then percolated, in different ways, throughout the information system of the new millennium, NYTimes included.
Duelists Thiel and Denton, a former Financial Times reporter, have many things in common: they are both expatriates (one from Germany, the other from England), libertarians (one of the right, the other of left), both are gay, both visionaries on the role of technology as a factor in changing history. However, both personify the rift that has arisen in the American intellectual elite: the one recognized in Denton fears a future in which the new super-billionaires will have the ability to control information and limit freedom of expression and the one recognized in Thiel does not want the web to become the place of slanderers who sow hatred and anger and violate people's privacy. A mainstream magazine such as "Time" has dedicated a cover and an article entitled "Why we're losing the Internet to the culture of the hate" to this theme.
Two different visions and cultures of information are on an immediate impact route. Not a single voice from Silicon Valley has risen in Gawker's defense, except for Jeff Bezos, also a vaguely leftist libertarian like Denton.
Newspapers and Facebook
After a few promising years, the papers are once again in a heart of darkness. Digital advertising is producing homeopathic revenues while newspaper advertising is giving way like a bursting dam. Circulation is decreasing and revenues from digital subscribers are never enough to compensate for the downturn that occurs on the traditional channel. The most serious thing, however, is the stoppage of traffic growth on their sites. A large part of users read the information elsewhere, on Facebook for example, or bounced on the pages of newspapers from social networks. Now it happens that newspapers have to borrow traffic from Facebook by giving it premium information, the one that attracts paying users. Facebook, which has positioned itself as an ally, seems to be increasingly the awaited white knight of the newspapers.
The NYTimes, despite its 1,4 million digital edition subscribers, is back in the red. The financial crisis of the "Guardian", one of the most beautiful and successful experiences on the web, begins to scare the Scott Trust (the non-profit foundation that guarantees the newspaper's independence) to such an extent that its undisputed leader and designated guide of the Trust, Alan Rusbridger, has been dismissed from all operational activities and today maintains a music blog in the newspaper, after having been its director from 1995 to 2015. Rusbridger's fault was that he was too sporty with his strategy digital first. Anyone interested in learning more about the Guardian's situation can read Stephen Glover's speech in the "Sole 24-ore" magazine on 18 May 2016.
The hostile takeover bid by Gannett Company (owner of "USA Today") on Tribune publishing (the media group of the "Los Angeles Times" and the "Chicago Tribune") has unleashed a paradoxical situation, an indicator of the disarray in which all the compartment. To respond to the onslaught, which wasn't all that bad for their business despite the modest share price, Tribune's board of directors overnight changed the company's name to Tronc (Tribune online content) promising to reorganize into short time on rather uncertain concepts such as machine learning and artificial intelligence. He also coined Tronc's new motto “From Pixels to Pulitzers”. The initiative aroused the hilarity of the whole environment and the HBO satirical journalist John Oliver compared the name Tronc to the cry of the elephant that ejaculates. Some shareholders really pissed off and now Tronc is speeding towards Gannett, who has improved the offer in the meantime. The matter in its corporate governance aspects was the subject of a very interesting comment by Steven Davidoff Solomon on the "New York Times" in the column "Deal Professor" to which we refer the reader who wishes to deepen the themes of the relationship between board-shareholders and offers hostile purchases.
Meanwhile Verizon bought Yahoo! to aggregate it to AOL in the hope of building a media company capable of representing the third pole of online advertising together with Google and Facebook. However, he lost Arianna Huffington who founded a startup, Thrive Global, which is inspired by Giovenale's motto "mens sana in corpore sano".
Television between the great old men and the millennials
How can we not start with the consequences of the murky family saga of the Redstones, a modern replica of the Borgias, which is leading to the exit of a large part of the historic management of Viacom, the cable TV giant with CBS and Paramount in its portfolio. It may be that the group emerges strengthened, but for the moment it is suffering from a good identity crisis.
How can we fail to mention the succession of the octogenarian Rupert Murdoch and above all the unedifying story of sexual harassment, discrimination and machismo that took place on Fox News under the direction of its magical director Roger Ailes who was forced to leave. Since Ailes is to Fox News what Jobs was to Apple, many are wondering what will now happen to the largest US news channel that reaches 100 million Americans. Everything is in the hands of the two young Murdochs, Lachlan and James, who have taken over the leadership of 21st Fox. Will they be able to preserve the empire built by their father?
The more serious matter, however, is not dynastic. It's about moving audiences, especially young people, away from cable TV (cord cutting) in favor of streaming and other digital media. A phenomenon that hit, causing a violent psychological shock wave, even ESPN, the flagship of cable TV and responsible for a large part of Disney's profits. If subscribers abandon ESPN it's time to throw the lifeboats overboard and salvage the salvage, was the sentiment of investors and shareholders in traditional media.
Then there is Europe who play in a minor division. Here, too, there are signs of something big about to unleash. Emblematic is the story, also disconcerting, of the withdrawal of Vivendi from Mediaset a few weeks after the agreement for Mediaset Premium. Very little was understood of the reasons for this decision until Bolloré announced that Vivendi renounced the ambitious project of a Netflix-style European media company, also closing the streaming service in Germany. A source refers to a dossier circulated among Vivendi's management which states "having a streaming service without the support of a pay TV is not economically sustainable". And then goodbye to the project. A European story: all chatter and badge.
Shane Smith, the new advancing?
Saying that in 2017 there will be a "bloodbath" in the media industry is Shane Smith, 46 years old co-founder and CEO of Vice Media. Shane Smith one of the most unique, eccentric and discussed characters of new media. He calls himself the "belly of the media". The Montreal Canadian has very little of the Canadian stereotype: Falstaffian in build, he is excessive, talkative, irreverent, immoderate and tattooed as only an ex-punk rocker like Shane could be. His group was called Leatherassbuttfuk, and his college nickname was "Bullshitter Shane," a moniker he was proud of.
The Wall Street Journal Magazine this month (September 2016) dedicated the cover to Shane and a long portrait by Andrew Goldman complete with a photo shoot by Magnus Marding. It is learned that Shane bought a Mediterranean-style mansion in Santa Monica, called Villa Ruchello, for $23 million without ever having set foot inside before writing the check to the real estate agent. He also boasted to the "Journal" reporter that he had broken the record for the highest tip ($80) ever left in Las Vegas. He handed it over to the astonished staff after a dinner with his management at the Bellagio Hotel steakhouse which cost $300 plus $80 in tip, as he is keen to point out. A good day for the Bellagio sommelier. His passion for wine is legendary; he has elaborated a sort of metaphysics on wine and his favorite room at Villa Ruchello is called “The drinking room”.
Deputy media, something special
Shane is the co-founder of Vice Media, perhaps the most successful and appealing experiment of new media in journalism. Founded in the 16s in Montreal under the name of Voice of Montreal, it has grown from a 2600-page magazine to a full-fledged media empire (30 employees in 18 countries). Vice's audience, millennials (34-XNUMX years old), is the target to which all large and mature media conglomerates aspire. For this reason Rupert Murdoch and Bob Iger took the trouble to visit Shane at Vice's headquarters in Brooklyn to ask for a package of shares and pay him handsomely, but not too much. When the mountain goes to Mohammed. President Obama also gave in to Vice by being interviewed by Shane who accompanied him to a federal prison in Oklahoma where he met some young prisoners for possession of small doses of drugs.
Vice has done something extraordinary that Richard Wagner would have liked: it broke the traditional separation between the various mediums and created a truly “total” resource in which the various historical forms of information merge into a rather successful synthesis that also incorporates advertising without appearing to be advertising. Nor can Vice be classified because it is nothing and everything: TV, newspaper, blog, publisher, communication company, advertising agency and so on.
Apple will buy Netflix
David Carr, the late media columnist of the “New York Times”, shortly before his untimely death had silenced Smith during a debate but had to admit: “he's the biggest bullshit I've ever met, but there's a difference. The bullshit that he says comes true ”.
And a prediction on what will happen in 2017 in the media industry, Shane Smith has it and maybe it's just like David Carr says. Invited to the Edinburgh International Television Festival to deliver the prestigious MacTaggart Lecture 2016, he rocked the audience with an hour-long performance. He talked about everything, old media and new media, programmatic advertising and native advertising, the consequences of ad blocking which takes away a quarter of the web from advertising, the change of paradigm in media consumption and how much it is necessary to break the closed media club to let young people in. “Who today would entrust a 25-year-old young man with a budget of 23 million dollars to shoot a TV show in Mexico City? Nobody. But we do." He then focused on the themes that millennials seek and intend to consume without finding an adequate offer in the mainstream media. These themes, according to the data collected by Vice by monitoring its users aged between 18 and 34, are in order of importance: 1) music; 2) the environment; 3) inequality; 4) civil rights; 5) social justice; 6) LGBT issues.
Some of his radical theses were noted by John Gapper of the "Financial Times" who dedicated a 4-column report to him at the opening of the "Companies & Market" spine of the London newspaper. Shane says 2017 will be the year of reckoning for older media as viewership declines and younger audiences abandon television
Textually as reported by the Financial Times and as in fact can be seen in the video of the lecture:
“This year we have seen a huge consolidation, next year there will be a bloodbath. Fox has already made an offer for Time Warner, Apple has also made an offer to Time Warner and also wants to buy Netflix. Time Warner is aiming to buy Viacom to defend itself from Fox. If Viacom continues its Shakespearean implosion – which I am pleased to witness – everything will fall apart. In the coming months everyone will try to buy everything and we will have a blast… A revolution is coming in the media. It will be scary, it will be fast and it will be unpleasant… Only the most agile and dynamic companies will survive”.
Word of Shane Smith, known as the cazzaro.
