Occupy is our Babel

October 7th, 2011

I would have tweeted this, but it’s too long. The Occupy Movement reminds me of this verse from Genesis 11 and the story of the Tower of Babel. Theologians have used it for centuries to help children understand why we speak different languages, but the word “language” has many meanings, including any manner of expressing thoughts.

God is the speaker:

“Look!” he said. “The people are united, and they all speak the same language. After this, nothing they set out to do will be impossible for them!

Come, let’s go down and confuse the people with different languages. Then they won’t be able to understand each other.”

Fast forward to today, and substitute the status quo for “God.”

Now you have an idea of what lies ahead.

While we’re at it, I might as well ask where “the church” is in all of this? Do they come down on the side of the people or the institutions?

The answer might surprise us, but not really.

Posted in Culture, Disruptions, Economy, Networked World, Occupy, personal media | No Comments » |

Let’s blow this thing up (and start over)

June 18th, 2011

The economy is making rumbling noises again. Its engine is sputtering, and that has lots of folks nervous (again). What’s happened to our recovery? Umair Haque (“The New Capitalist Manifesto“) argues that it’s not a recovery, because we’ve not been in a recession. He believes that we’re in the beginning of a great “resetting” of the economy. The new version of capitalism, he writes, will run on different rules. I certainly hope so, because the one we have has always been perplexing to me.

Let’s begin with my admission that I’m not an economist, which is probably why I ask these kinds of questions anyway. As George Carlin used to say, “These are the kinds of questions that kept me out of the good schools,” the implication being they were too obvious. So here’s one for today:

What person truly believes that economic growth can be sustained in perpetuity?

I’m serious, for this is the basis of the economy of the West. Making money or earning money isn’t the foundation of capitalism; it’s that such a capacity must be growing, at least in the wealth capital of Wall Street. After all, expenses increase, therefore earnings must increase. Gosh, it just seems to make such sense.

But I look around and ask, “Does anything grow forever?” The answer is no. You might make the case that deserts are always expanding, but we could stop that if we wanted. Besides, a desert is a form of death, not Life, and Life is in a constant state of renewal. To everything is a season. Everything. The biggest and oldest trees of the forest eventually fall victim to age, and when they go, their progeny assumes their former role, and, in death, they provide sustenance for many different forms of Life. Henry Adams wrote in The Education of Henry Adams, “The law of nature is change (chaos), while the dream of man is order.” He added that “Chaos often breeds life when order breeds habit.”

Certainly, the dream of our economy is order, but it competes with the law of nature. I wonder which will win?

The problem is that human beings run the “order” side of things, and we’re all in it for ourselves. Why else, for example, would “God’s law” for the economy — profit for 49 years, but then everything gets reset in a “Year of Jubilee” — not be followed by a culture that claims roots in that very thing? We don’t, because that would mean letting go of everything every 50 years, as if anybody would actually have to go through that twice. We like the “teach us to profit” promises of the Book, but we don’t go along with the resetting. Why? Don’t be an idiot, Terry.

In 1923, Russian economist Nikolai Kondratiev published his theory of cycles or “waves” in the economy of the West. He’s a fascinating character in the history of Russia and the Soviet Union, and his theories are largely unaccepted by Western economists. His research, however, revealed that these waves were each roughly 50 years of prosperity, followed by a depression. I’ve always felt this a remarkable coincidence, and again, the idea that buying and selling is beyond our control flies in the face of contemporary intellectual thinking. I would remind us, however, that such thinking is ultimately self-serving.

So I look at what’s taking place today and wonder why anybody honestly thinks perpetual economic growth stands a chance. The human beings whose greed and avarice are rewarded through controlling this monstrosity are the least likely candidates for such a position, yet the political and economic power they wield keeps everybody else beneath the crushing weight of their boots. These are the first people to scream for their “rights” and liberties to do as they please, while we must suffer the consequences — unintended or otherwise — of their actions. We bailed them out, didn’t we? One thing’s for certain: they will not suffer, not one bit.

As John Milton wrote, “License they mean when they cry liberty, for those who love that must first be wise and good.” That slogan was used in the fight against slavery, and it should be our clarion call for the 21st Century economy. “Wise and good” are not attributes I’d give to the upper echelon economic status quo.

I’m with Umair Haque. Let’s blow this thing apart and start over.

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Television is back (or not)!

April 6th, 2011

2010 was a great year for the television industry, so much so that the doom and gloom of recent years is being replaced by a cautious optimism. Media Post’s Wayne Friedman’s report last week on New York-based media investment/adviser M.C. Alcamo & Company’s clients actually shows profit margin increases of 10 points. TEN points!

These results near the 50% or greater gains that virtually all TV station groups had garnered decades ago. Some, like Sinclair Broadcast Group and Meredith Corp., got to this magical mark, posting the quarter’s highest profit margins of 51% for all TV companies.

For the 15 broadcasting companies it covers, M.C. Alcamo says revenues rose 27.1% to $371.8 million — in part helped by the turnaround from major ad categories such as automotive marketers, as well as a surging political ad market.

The best performers: Fisher Communications grew 49% in revenue to $18.9 million; Gray Television added on 47.8% to $37.1 million.

These companies have all gone through painful restructurings during the last few years, which contributed to the profit margin gains and begs the question “what will they do with all that extra cash?” It all depends on how you view the future. Remember, public companies exist to share profits with investors, but the question still applies. Michael Alcamo told Mediapost that there are three possibilities:

…many broadcasters will continue to pay down outstanding debt…many will set aside these big cash reserves for strategic investments. Third, stations will look to upgrade station infrastructure, such as HD technology.

While companies must do what companies must do, we strongly recommend strategy #2: set aside cash reserves for strategic investments, and let those investments be in people and technology for new media, especially in the area of sales.

These wonderful numbers may suggest to some that local television is back. Automotive is certainly going strong, and there’s going to be early political money for some, because 2012 will be so huge. But there are still tremendous weaknesses in the economy and despite glowing projections for this summer’s upfront marketplace, at some point advertisers are simply going to lose interest in higher CPMs to cover shrinking audiences.

On the economy, take a look at the below graph, for it points to a major concern. It comes from a Bloomberg article entitled, “U.S. Job Rebound Misses Those Looking Longest” and shows that the number of people out of work more than six months is going down much more slowly that those unemployed less than six months.

While the jobless rate dropped for the fourth consecutive month in March, the number of people going more than six months without work rose to 6.12 million. That’s more than four times the average since 1970, the period covered in the chart.

The continued weakness in the economy is another reason why broadcast companies shouldn’t spend those cash reserves as if television is back. The road ahead is both uncertain and rocky, so let’s proceed optimistically but cautiously.

Posted in Broadcasting, Culture, Disruptions, Economy | No Comments » |

Social media as “shop talk”

January 1st, 2011

I went to my local Verizon store New Year’s Eve to check out the Motorola Droid Pro, which I plan to purchase. It was also time to investigate my family account for discounts and and upgrades. We were the only customers present, something that’s very unusual, so I had the attention of all three clerks. They were temporarily out of Droid Pros, but said they could get one and that I could come back today, New Year’s Day.

“You’re open?” I asked.

“Yeah,” a nice young man replied.

“What hours do you have to work?” I probed.

“Well, they’ve sort of messed with us,” he continued, “because we were supposed to be open from 10-6. They just notified us that we’re working until 8 o’clock.”

Eyes rolled, and I lamented the extra two hours with them, but in the back of my mind, I couldn’t help think that, sooner or later, this kind of corporate behavior is going to have to end. It cannot exist in a hyperconnected universe, because word travels fast. We’ll go through a season of people getting fired, because they complained about this or that on Facebook, but in the end, who will want to work for a company with such practices? It certainly won’t be the best and brightest. Our ability to talk to each other — to complain to each other and find solutions — is what’s really new about today. I suspect we’ll need to strengthen “shop talk” labor laws to include social media in order to eventually protect people from sharing complaints that normally would have been kept at home.

This points to what people like Umair Haque and John Hagel preach: that best business practices for the 21st Century are very different than those of the Industrial Age. When profit is the fundamental raison d’être, then anything goes in the name of profit. Too bad, employee. You want a job, you’ll do anything and everything I tell you to do, and you won’t complain. But pure profit can no longer be the essential driver of business in a hyperconnected universe. It has to be about creating and maintaining value. If you stand any chance of a quality labor force, you simply must treat people differently, and not just your customers. The smart business person of today is beginning to see that. It’s not all about salary; it’s very much about working conditions. There are big corporations whose CEOs are quite adept at gutting working conditions in the name of profit. They are rewarded for so doing, because that’s how they’re graded by investors. They don’t give a crap about brain drain, because that’s not a part of their compensation, so who cares if employees must endure ungodly hours or manage their own benefits? A manager who practices this for long will soon find herself staring at an empty room where a factory used to be.

This will be their undoing, because what used to be called “shop talk” is now being spread far and wide. It’s only going to get worse for those who worship the bottom line at the expense of human beings.

I love Verizon and have been a faithful customer of theirs for a very long time, but this event has given me pause. What kind of business do you think they’ll do in those extra two hours…on New Year’s Day? What will they have accomplished except piss off their labor force?

Posted in Culture, Economy, Legal, Politics | 1 Comment » |

2011 operating mantra: new value creation

October 22nd, 2010

It’s budgeting time for media companies, so most of us are thinking about the future. We have choices to make, each of us.

Seth Godin has come along and offered a helpful glimpse at the four road options we have when facing choices in both business and life. The looping road, the indecisive new roads, the wrong road, and, of course, the right road. As a media observer and strategist for new media, the first two — and especially the first one, the looping road — are of most interest to me:

You might be stuck because you pick the wrong fork on a looping road. You keep getting better at the route you cover, but it doesn’t go anywhere, you just keep doing it over and over.

This is where I find most media companies in the new media space today. We’re getting better and better at running brand-extension websites and squeezing value out of them, but we’re not really going anywhere. Energy and resources spent serving this beast, therefore, are more costly than energy and resources spent creating new business models, yet most folks are stuck on the boosting brand road, because that’s all we know. Resources it takes to produce a dollar that’s standing still aren’t worth as much as those that produce a dollar that has exponential growth potential.

Another reason we’re stuck on this road is fear of the second:

You might be impatient or unable to stick to your decision to take this particular road, and thus you’re always starting on a new road. Since the new road is always strange to you, you rarely get any better at getting where you’re going.

Here, we’re presented with a suitable choice for tomorrow, but we’re unable or unwilling to give it the long runway it needs to get to a position of self-sustenance and beyond. We say we’re going to stick with it, but we give it a year and then move on to something else with the same results. Maybe that’s the right call, but one of the problems here is that our definition of “what works” is old school and usually built upon a traditional profit and loss statement. That’s because media is manager-driven, and managers need to see the processes delineated before pronouncing their blessing, and even then, the rug can be pulled out from underneath at any time, if the performance doesn’t live up to the projections. Position that against the tech industry that is eating our lunch, and you’ll find a different formula in place. Sure there’s a P&L, but there’s also a willingness to set it aside at any point when the model turns this way or that. Why is that? Because the vision drives the processes, not the other way around. Investor-supported businesses are, by necessity, run by visionaries who drive toward the goal, whether the processes are there or not. Managers? Perhaps. Leaders? Definitely.

I sense a growing willingness by companies to try new things, much more so than just a few years ago, and I think that’s positive. 2010 has certainly been a better year than 2009, and we hope that businesses will make the tough decisions about spending some of that money to invest in tomorrow instead of simply passing it along to shareholders. Wall Street media analyst James M. Marsh with Piper Jaffray told me last week that “the street” recognizes that media stocks are in an era of restructuring, which will likely continue for several years. 2011 is going to be rough, he thinks, and we would certainly agree. The bright spot, however, is where smaller numbers are headed north, where we need to dedicate resources that are producing new value.

That’s because new value creation is the operating mantra of media in 2011.

(Originally posted in AR&D’s Media 2.0 Intel Newsletter)

Posted in Broadcasting, Culture, Economy, Media 2.0, Newspapers, Reinventing Local Media | No Comments » |

The working class: a ticking time bomb

September 4th, 2010

Whenever Labor Day rolls around, I think of my dad. He passed away in 1988, and like most sons, I discovered while growing older that I’m a chip off the old block. Or, as the other old saying goes, the apple never falls very far from the tree. Sometimes I wish it wasn’t so (I’ve got his ears), but mostly, I’m just proud.

My dad was VERY vocal about his disdain for Republicans. “Silk stockings” is the term I heard. This was a reference to the dandy gentlemen of a former age, those who lorded over the have-nots of the culture. Like so many others after World War II, my dad was a factory-worker, a man who operated a machine of the industrial age in order to support his family. I’ve written before about how he used to stand on his feet, cutting boards with a router eight hours-a-day for Bergsma Brothers furniture. He cut the same piece, day-after-day as a part of a furniture assembly line. He worked hard and never complained.

He hated Dwight Eisenhower in the 50s, and election night was filled with angry tirades against the man who used to be his “commander” during the war. My dad was a staunch Democrat — a labor supporter — and we rejoiced when John Kennedy was elected in 1960. Back then, we had a middle class. He worked his ass off to push us there.

Today, though, we have the haves and the have-nots and nothing in between. Not only that, but the gap between the two is getting wider. A column in stltoday.com — in labor-friendly St. Louis — caught my attention today, as I’m thinking about the Labor Day holiday, my dad’s holiday. Here’s what hit me:

Today, the Tax Policy Center, a non-partisan arm of the Brookings Institution, projects that in 2011 that the top 1 percent of all wage earners will take home 18 percent of all income. The top tenth of that 1 percent will take home 8.2 percent all by itself.

Between 1979 and 2007 (before the Big Recession) the average after-tax income of the top 1 percent of the population nearly quadrupled, from $347,000 to over $1.3 million.

The columnist quotes a study by the Institute for Policy Studies (Executive Excess) that makes me wince:

“American workers … are taking home less in real weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 times what their workers made. In 2009, we calculate … CEOs of major U.S. corporations averaged 263 times the average compensation of American workers.”

Earlier this week, my stepdaughter surprised me when she asked what Labor Day was all about. Apparently, they don’t teach this in school anymore, and that’s another surprise. Labor Day was always my dad’s favorite holiday, because he knew that it’s all about the working people of our country — the people that the Silk Stockings of the land manipulate and take for granted today, as they go about making themselves even richer. This simply cannot go on, and when it blows up in everybody’s face, it’s going to be violent and ugly.

This widening gap between the haves and the have-nots is a ticking time bomb, and when it goes off, it’ll make the current disruptions of technology seem mild in comparison. I don’t think anybody is prepared for it, least of all our government.

Labor Day 2010. Discontent disguised as peace.

Posted in Culture, Economy, Politics | No Comments » |

Remember travel agencies?

July 29th, 2010

comScore Media Metrix released its monthly Web traffic report today and notes the summer uptick in the travel category.

More than 100 million Americans visited the category during the month, affecting the following travel sub-categories: Transactions, Hotels/Resorts, Ground/Cruise, and Airplanes.

Travel – Transactions sites ranked as the top gaining category for the month of June, growing 32 percent to 5.2 million visitors…

Hotels/Resorts sites also saw strong growth during the month with 36.6 million Americans turning to these sites for lodging options.

That’s a lot of traffic for what amounts to an essentially new business that’s been created by the Web. Before we had all of this information at our fingertips, we used travel agencies, those little storefront operations that you used to find in every strip mall in the U.S. The Web has wiped them out, almost completely. Ask somebody under 20 about travel agencies, and they’ll likely look at you funny.

The industry’s woes began with the September 11th, 2001 terrorist attacks and were complicated by the recession and deep discounts from travel providers. What used to be storefronts is now largely at-home agents who work on commission alone.

But the real killer of this industry was the Web, and it’s a lesson for anybody who lives and works in the world of (formerly) protected knowledge. The Internet finds the middleman in any transaction to be inefficient, and that is what has decimated travel agencies. Oh they’re still around — and still a smart bet in certain circumstances — but as the comScore numbers show, travel is mostly a do-it-yourself world today.

Posted in Culture, Disruptions, Economy | No Comments » |

The cart before the horse

June 1st, 2009

Simon Dumenco goes after the selection of Arianna Huffington for the Fred Dressler Lifetime Achievement Award by Syracuse University’s S.I. Newhouse School of Public Communications in a biting AdAge commentary. Dumenco writes that a school that teaches budding journalists “should know better than to honor a woman who thinks journalists should work for free!”

Puh-leeze.

In Mr. Dumenco’s attack on Ms. Huffington (he congratulates her first, of course), he bitterly chides both the Newhouse School and organizers of the awards for what he clearly believes is a blight on the profession of journalism.

It’s one thing for a journalism school to draw attention to itself — to make a naked grab for the sort of heightened “visibility” Ken Lerer values so highly — by creating a self-referential journalism-about-journalism award. And it’s natural for the organizers of the awards ceremony to align themselves with highly visible media people to attempt to heighten that visibility. But it’s quite another thing to give recognition to people who damage the very profession of journalism.

Huffington damages journalism, in Dumenco’s view, by not paying journalists, and this is the essential problem with his argument, for if money existed to pay journalists, we wouldn’t be having this argument (and many others) in the first place. The money is gone, Mr. Dumenco. It’s gone, and it’s not coming back. No amount of nostalgic wishing is going to bring it back, and any argument based on the notion that it is (or worse, that it’s still there) is just chasing the wind. It’s also sloppy thinking, for if Mr. Dumenco had his way, the only outlets for journalism would be those that paid the writers (a living wage), which is silly when there is no money. No money, no journalism? History says otherwise.

It reminds me of Mark Cuban’s whining about Google and YouTube last week at the D: All Things Digital conference in Carlsbad, Calif. Cuban complained about the unfairness of Google subsidizing YouTube, noting that YouTube wouldn’t exist without the subsidy. Cuban wants a world without subsidies or YouTubes, because then the money of the status quo would have all the fun, including Cuban and his (new found) billions. You’re entitled to make money only if you play by certain rules, in Cuban’s view, and anybody who breaks those rules is, well, cheating. Damn those cheaters at Google!

Same with Mr. Dumenco. He thinks Arianna is stealing journalism without paying for it (cheating), when she’s actually creating a model with a different kind of currency: links. She hasn’t asked, but if she did, I would gladly write for Ms. Huffington, because I recognize that the value of journalism isn’t in what I’m being paid but rather in what I’m saying, and if I can’t find a creative way to pay myself with the kinds of traffic I’d get from The Huffington Post, then the problem is with me, not the lack of money to pay me. Simon Dumenco has the cart before the horse.

Meanwhile, the “publication” is revealing interesting ways to combine and display items to make for a smooth user experience, and who’s to judge the HP of tomorrow by the HP of today?

Posted in Culture, Disruptions, Economy, Journalism | No Comments » |