Many media industry insiders predict Rupert Murdoch’s pursuit of Time Warner Inc. isn’t over, despite his recent announcement that 21st Century Fox pulled its $80 billion merger offer. Others believe that if Murdoch doesn’t end up acquiring Time Warner, another media or tech company inevitably will. Whatever the fate of the media company, Murdoch’s interest in it and the attention the deal has drawn is another powerful illustration of the value of content.
The rapid consolidation of the media industry has recently brought major mergers between cable distributors, providing the companies that deliver TV shows and movies with more leverage in negotiating with those that produce the content. As the Wall Street Journal noted in a June 2014 article predicting a rise in entertainment-company mergers, distributors are gaining scale through deals including Comcast’s pending purchase of Time Warner Cable and the merger between DirecTV and AT&T Inc.In a video mapping out what drives media consolidation, CNN’s Brian Stelter notes that those who produce the content play a critical role in the “tug of war” between entertainment producers and cable distributors. Stelter quotes one analyst as stating “I’d rather own the bullets than the gun.” David Carr, media columnist for the New York Times, echoed this sentiment in a video on the interest in Time Warner in stating that in contrast to the pipes of cable, “over and over what seems to have enduring lasting value is the stuff that’s in those pipes.”
Time Warner has become profitable by paring down the company to focus on TV and movies. However, on the print side, many media companies are spinning off their newspapers and magazines, viewing them as less profitable than their TV and technology products. As recently reported in the New York Times, Gannett, Tribune Company and E. W. Scripps, major players in American newspapers, all dropped their print properties in favor of their television divisions in the span of just over a week. Despite the challenges facing newsrooms, there are many reasons to be optimistic about the future of the written word. For one, the rise of digital news organizations has driven growth in digital reporting that fills a gap left by shrinking print newsrooms.
Also notable about the conversation around Time Warner is the array of potential suitors being discussed by commentators, which demonstrates a fundamental change in the definition of a media company. In addition to media companies like Comcast, CBS and AT&T, commentators have noted that such digital giants as Google, Amazon and Apple could potentially bid. Tech companies have been increasingly focused on creating their own content, as Netflix has done with “House of Cards” and Chelsea Handler. The acquisition of Time Warner could be a way to buy the content piece instead.
The definition of a media company is much more convoluted in the current media environment and, as evidenced by the interest in Time Warner, those who create the content are highly sought after. In this environment where “content is king,” businesses have a significant opportunity to use their market intelligence and subject-matter expertise to act like news outlets and create compelling content for the marketplace – content that has great value. Corporate journalism offers organizations an ability to draw on their areas of specialization and produce authentic content that provides value to the reader in a similar manner as traditional media reporting, while still aligning with their marketing and business development efforts.