Posted by: Jon Fine on May 27, 2009
(Liberty Media Chairman and overall media tough-guy John Malone just got offstage at this year’s All Things Digital conference. A question from the audience eprompted the following thoughts from Malone regarding the current problems of local media—disappearing ad dollar placing newspapers, radio and local broadcasters under severe stress.
I don’t necessarily agree with much of the below, but I did find it thought provoking. Posted quickly from a lightly edited transcription I took; all errors of grammar and spelling are mine.)
[In Denver, Malone’s hometown] We’ve seen one paper go out and second one is in serious financial trouble
You ask yourself, since the local newspaper has more journalists than all other media in the market combined, is it doomed? That this local newsgathering function is doomed by its technology?
My kneejerk reaction is: the government’s done it. Of course, I blame a lot of things on the government. They--the government—should have allowed TV and newspapers to combine years ago.
[Note: Malone is referring to regulations to proscribe one company from owning TV and newspaper properties in the same market. Of course, the idea that combining newspapers with TV stations would save local news operations from the troubles they’re is a notion disputed by many, myself included.]
Clearly there is a need for local information and news, and a demand for local advertising The question is can you combine them in a way that is economically viable: What is the role of “local,” or more broadly “localism?” Is everything going to be national—is all advertising going to be national? Anyone who has a [local store] becomes a franchisee of someone else.
These are very broad, sweeping questions I don’t have the answer to.
Barry Diller has [owned a local media business for a long time]. A thing called CitySearch. It’s been a real struggle. It’s about at break-even; I don’t want to give away secrets. He’s been persistent with it. He may ultimately prevail. But what is the role of localism? Does everything have to be at least national, or even global, to be economically viable in the future? I don’t know. [But] from a content-creation point of view, we would not produce anything that didn’t have global appeal. That couldn’t be translated into 86 languages, and spread around the world, in order to amortize the investment. Most movie producers discovered, you’ve got to look at international markets. You can’t just base [your business] on the US.
The question is, what organizational structure has to evolve to make [localism] an economically viable proposition. It’s clearly under stress right now. Outdoor advertising, radio or print—it’s all under a lot of stress right now.