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April 27, 2009
Who Should Buy Whom? - Episode One
On the sad, but inevitable occasion of the official end of Conde Nast’s Portfolio, I am inspired to sit down and to write a piece I have been considering for weeks now.
Variety – If they want to keep the brand alive, they need to find some points of focus in the online universe. First, they should buy HitFix up immediately. I have no doubt that for enough money to cover the start-up, a few stock options, and the promise of a handful of salaries, they can acquire this new website, which has little chance to survive on its own, but which has ideas that the infrastructure of Variety would support well. The idea of being The Place To Go If You Want To Find Entertainment, To Set Your Entertainment Schedules, And To Even Buy The Tickets is the kind of consumer play that Variety has been looking for… and I suspect that the start-up has done this for a fraction of what it would have cost for Variety to do it on their own. In addition, the editorial team at HitFix, which is made up of some who have been seen as rebels, are committed to mainstreaming a bit. Rebels on the payroll – especially ones who will not lose you ads – are a quick way to web street cred.
Next, as much as it sickens me, the Trade Paper Of Record should hire Nikki Finke, Roger Friedman, or someone at Page Six… someone who is willing to run ”scoops” that are spoon-fed by one of the parties involved, but carry the cache of “breaking news.” They need someone to be a self-contained pariah who is also self-interested enough to understand where the lines are. That – and the ego that makes her think she is worth way too much money – may leave out Nikki. But Finke 2.0 is just a matter of finding someone who will do that dirty job and love doing it… which really leaves out the too-long-fat-n-happy-with-Variety-as-cover Michael Fleming… he’s just not used to playing in that dirty a pool.
Finally, they should either buy the new Movieline – also not long for this world, though it can last as long as whoever paid for the brand name on the logo is willing to not make any money, as his staff is surely willing to work for the same peanuts they got from Gawker Media as long as they have their editorial freedom – and make each of those writers into weekly or bi-weekly columnists that can combine enough bitchy slapping with enough genuine insight into the art of filmmaking to build an audience OR they need to raid the dying magazines for some other interesting talent.
The Hollywood Reporter – They need a complete facelift.
I am still a believer that MCN would be a good way to rebuild, but I’ll put that aside…
Buy Gawker Media.
It’s really that simple. Nick Denton is now Facebook to a world of Twitters. He overplayed his hand and is now last gen. But his principles for running web content are very strong. You don’t want him running your company in whole, but if you took The Hollywood Reporter and Gawker-fied it, you’d have a truly unique web profile, mixing old school trade reporting with the idea of a stream of information that the Gawker really created.
Imagine 10 reporter/bloggers creating more than 100 posts a day, each tasked with a very specific beat. We all see the heat coming off of Nikki Finke’s diet of strikes, agency gossip, and attacks on Ben Silverman. What would happen with 3 times the content from writers who were actually edited and committed to their beats? Fill the news holes. Work the rumors, quickly and efficiently. Offer real insight.
Follow this up with the purchase of indieWiRE, maintaining the staff, but Gawkerizing them as well, so they can do their great work and stop trying to overreach.
New York Times – The Paper of Record is doing pretty well in New Media, even if they continue to have terrible trouble finding writers to cover the industry as well as they should. (Team Cieply up with John Horn, freed of his LA Times shackles, and the combo and the internal combination might make for the best work on the film industry in any daily ever.)
The only thing they are really missing is web depth… and ruining the branding of The Carpetbagger by making it their catch-all movie blog is a disaster that should be corrected TODAY. Carr is The Money. Don’t make it mud.
But do hire Anne Thompson and free her from reporting any full-length stories. Make her be the blogger she might want to be. 10 stories a day… never just a headline wrap… minimum of one reported conversation about a story before she posts her opinion. Anne loves working the room. So let her do that. She’ll never turn into a cheap gossip, but she can be the social butterfly of Hollywood, taking the temperature with a wink and a smile.
And find a way to buy the idiotic, but smartly conceived Reverse Shot from indieWIRE. It will never churn a profit for indieWIRE, but the idea of a “farm team” for NYT criticism is smart. In fact, they could do this without actually buying Reverse Shot, but by actually building their own, featuring all of the critics they have freelancing these days. Set the financial bar low… cruel but such is life. But let these critics write as much as they like under the banner. For a couple of hundred thousand dollars a year – maybe less – The Paper could be the place where the next generation of great critics is built and that leadership role is a big part of the site’s future.
USA Today – The web site needs to be fixed so it can be more easily navigable. It’s just brutal… especially from the nation’s biggest circulation paper.
But the web play that could be huge for them – and relatively cheap – is to become a clearing house for all of the film journalism and critical organizations out there. Create a home for National Society of Film Critics, LAFCA, NYFCC, etc, etc, etc. The people involved are pre-vetted by membership and the state-by state idea of the newspaper can move to their website. If you are in Michigan and want to read every and any critic in the state, USA Today should be the place to go.
LA Times – The classic LAT play would be to buy The Wrap. Fortunately for them, Sharon Waxman’s ego will keep that from happening. (Sharon might want to ask Arriana Huffington what her revenues are and not just her still-inflated-by-the-election numbers are.)
The LAT would also be well served by buying HitFix… but never will because they will think they can do it cheaper and better in house… and then never do it.
The TribCo is, allegedly, launching an in-house web system so all the papers can share content more effectively. This is, I still submit, where the future of the company is… only it needs to be public. TRIBUNE needs to become a national brand that doesn’t thin itself out to the degree that it’s just one voice in 12 markets. It needs to be 4 of 5 voices playing out in all of their markets. Drama is conflict. And just by allowing interactive writing, conflict is inevitable.
They really don't need to buy more talent... they have the talent... they just need to let it loose.
I’m sure I am missing some sites that need to buy and/or be sold. We’ll get into it again…
Posted by dpoland at April 27, 2009 12:15 PM
Comments
Who should buy whom.
Posted by: Wrecktum ![[TypeKey Profile Page]](http://www.mcnblogs.com/thehotblog/nav-commenters.gif)
at April 27, 2009 12:33 PM
David -
Thanks for the kind words about Reverse Shot! We also feel the site is idiotic, but smartly conceived. However, I should correct you on one point: Reverse Shot is an independently owned company and not a subsidiary of the media conglomerate that is indieWIRE.
For those out there looking for a whippersnapper critic farm team, we will, of course, consider any offers.
Best!
Jeff Reichert
Editor
Reverse Shot
Posted by: Jeff Reichert at April 27, 2009 02:47 PM
I'm surprised you see any value at all in the new Moveline.
Posted by: Kristopher Tapley at April 27, 2009 03:53 PM
Thanks, Wreck... corrected.
Interesting, Jeff... all the more reason for someone to buy you guys.
And Kris, the talent at Movieline 2.0 is more worthwhile than the work they did at Defamer and often, than they are doing now. This is true of many outlets. There are all kinds of writers who are working below their highest intelligence these days... and really, forever. Old Media was not the best at getting the most out of the best very often either.
You should be getting a call from Sharon Waxman within hours, by the way. She's going to be stuck chasing Oscar dollars this fall and needs a draw... and has already been turned down by at least one known name. Sadly, the Brave New World is stuck going after the Same Old Dollars.
Posted by: David Poland at April 27, 2009 04:00 PM
I thought Finke was HuffPo bound? Or would that make Huffy's tabloidism too blatant?
You're right about USA Today. Needs a major overhaul.
NYT isn't going to do anything except suck wind and hope some uber-sucker comes along and dumps a boatload off at the front door.
The major question for any of the listed mergers, is money. Can Variety afford to take the chance on buying a Hitfixx? What exactly is the value? I can see THR and MCN merging because they need the adaptation and MCN needs the the growth step. It would have to be partnership, limited upfront capital by THR with incentives based on performance. This way MCN keeps control and ownership and THR limits risk.
FWIW, I think we're going to see Variety, LAT, NYT, etc...wait and go for the low hanging fruit. And don't count Slate out. They've got to do something or WaPo will have a decision to make.
Posted by: Martin S at April 27, 2009 04:24 PM
I think one of these majors should buy Mendelson's Memos, but that's just me.
Posted by: Scott Mendelson at April 27, 2009 04:43 PM
DP great post. Would also appreciate some value estimates of these possible purchases as there seems to be many variables to consider.
I like the fact that MOVIELINE is back and especially that they're making old content available again. What are the overheads for these blogger type sites anyway?
You say purchase HITFIX for Variety but major sites like to keep a uniform to their appearance and interface. I'm not sure how it could be integrated without existing as a standalone site with them.
Since traffic is debatable on so many fronts. Can we see a list of you about these possible pickups in order of influence and value?
Posted by: Jeffrey Boam's Doctor at April 27, 2009 04:47 PM
If some of these outlets wait for low-hanging fruit - which they have chosen to do before, to no success - then they may well become low hanging fruit.
Certainly, the future of both trades - whether they will be publishing as dailies at this time next year - will be determined before September is over.
Posted by: David Poland at April 27, 2009 04:48 PM
DP you couldn't go one thread without bagging Friedman could you.. "low hanging fruit"... sheesh give the guy a break !
Posted by: Jeffrey Boam's Doctor at April 27, 2009 05:39 PM
I'm not sure the NY Times is in a position to buy jack squat. Ditto for USA Today. And the LA Times. These companies are hemmoraging readers, and revenue. I'm not sure how anxious they'd be to invest in and expand their online component, while their primary revenue generator is in such dire straights.
Posted by: mysteryperfecta at April 27, 2009 06:06 PM
JBD... I don't think values of these sites are easily quantifiable, which is why all these sites are buyable.
Almost every major buy of a content site has been based on revenues. None of these sites have enough revenue to make them terribly expensive. But like the NFL draft, the value of the talent involved and what they do - not necessarily the traffic they now get or the buzz they generate - is what is important in any pick-up at this level.
For instance, Nikki's vanity is much bigger than her revenue stream... but she is worth more than a traditional multiple of her revenue generation if you want to generate the kind of attention she creates. On the other hand, buying a business with a decent revenue stream already established can be dangerous because the merge of two entities in a similar niche can create smaller buys than the two separate buys. None of this is as simple as counting eyeballs... because it is a specialized business, whether we like it or not.
And Mystery, the papers in question, like studios in trouble that still spend on marketing their movies because there is no choice, have money and spend money. None of these companies - except the NYT, to some extent - has shown the ability to build viable web entities from scratch. So while that would be better, if it isn't viable, then spending a little more to get what they need to have in place to survive the next wave is cheap by comparison.
In other words, if it costs you $10 million a year to keep things going and the revenues to cover that cost keep getting closer to that number and then become less than that number is bad business.
If you have to cut $2 million in current costs to spend $1 million to buy a web breakfront, you are better off doing that. The alternative is fighting to keep the status quo and eventually being wheedled down to a $5 million a year business... or, perhaps, no business at all.
Posted by: David Poland at April 27, 2009 07:42 PM
Someone should buy me. I come cheap.
LexG too.
Posted by: LYT at April 27, 2009 11:43 PM
I'm not arguing with your suggestions. Each may have the result of strengthening online presence. But to a considerable degree? Enough to make a real difference?
Circulation is down. Ad revenue is down. Web traffic has trended up, but online ad revenue STILL FELL. According to alexa.com, only 1.7% of nytimes.com web traffic visits movies.nytimes.com. Assuming the successful implementation of your suggestions, what can they bump that up to?
Cutting $2 million in costs to spend $1 million to buy a web breakfront may pay off, relatively speaking, but we are talking about The New York Times, who is a BILLION DOLLARS in the red. Perhaps your NY Times section should have included a small preface stating: "Step 1: Unprecedented overhaul. Now, The Paper of Record is doing pretty well in..." :)
Source: http://finance.yahoo.com/news/US-newspaper-circulation-sees-apf-15039695.html?.v=6
Posted by: mysteryperfecta at April 28, 2009 06:05 AM
I am put in mind of Citizen Kane 2009... "And if I lost $1 billion a year, every year, I'll be out of business in... 6 years."
Posted by: David Poland at April 28, 2009 05:12 PM
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