Category Archives: General Strategies

Should Time Warner Divorce AOL?

In mid-December, Forrester Research issued a report entitled Guides Redefine Mass Media that states, “Media companies in every sector face a collapse of their distribution control – and distribution control is what maintains media industry profits. Industry troubles have only begun.”

Mass Media companies rely upon the control of distribution channels, but that consumers’ increasingly open access to content via the Internet is evaporating that control, the report states. Forrester says that as consumers begin using new technologies that allow each consumer to find content specifically matching his individual needs and interest, the concept of Mass Media itself is shattered.

How are the major media companies defending themselves? According to Forrester, they are blindly relying upon their brand names. These companies simply believe that the consumer will continue to rely upon the media brand names that had controlled the finding of content during the late 20th Century. “But they are wrong,” the report states. “This reasoning assumes that the consumer has no outside help finding content.”

(By the way, Forrester’s mention of media companies using their brand names as a Maginot Line. That echoeswhat we at Digital Deliverance termed the Muddle Through Strategy of Time Warner New Media.

During the 1999 Content Summit in New York, Time Warner Director of New Media Dan Okrent was asked about his company’s strategy for Media Media. “Some eight or nine media companies dominated media during the 20th Century. We think some eight or nine will also during the 21st Century, and we plan to be one of those companies. Although we don’t know how the Internet will affect media, we are confident that consumers will always trust the Time Warner brands. And we are a rich company, so we can always buy any hot new companies that develop future media technologies.”

We wonder how surprised Okrent was a year later when one of those hot new companies instead bought Time Warner. Probably about as surprised as he was that Time Warner’s Pathfinder site never found any path to online success.)

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