The weakness of the media oligopolies
It's hard not to use the term dinosaurs to characterize certain oligopolies, such as the Big Media companies. But let's not forget that dinosaurs reigned for 100 million years, so don't hold your breath waiting for them to go extinct.
Still, big size can have its own liabilities (Goliath, the Spanish Armada, the woolly mammoth, and so on). Big Media is hurting this year, according to Frank Rich of the New York Times, for that very reason. In his article "Bullies Are Not What Ails Hollywood", (1/11/2004) he notes a curious phenomenon. In the past year, three major areas of media culture (pop music, network television, and Hollywood movies) have had serious declines.
The problem, according to Rich, is that the mass-media audience is rapidly splintering. The big media companies are finely tuned to reaching mass audience with culturally broad-based hits. He quotes a Time magazine writer as saying "'the mass-media audience as we have known it' is a distant memory. 'It is no longer possible to please most of the people most of the time.'"
As Rich puts it:
While 2003 was a year marked with the further consolidation of power by a handful of mega-media companies, the audience is not without some power to fight against them. The more we reject embarrassing big-ticket stunts like "Charlie's Angels: Full Throttle" and "Coupling," the riskier it becomes to produce bloated would-be crowd-pleasers chasing after a theoretically homogenous crowd.
Of course, the big media companies have bought or established boutique studios, cable stations, and minor labels to serve niche products. But, as Rich points out, those boutiques, once they've had moderate success, are increasing under pressure to produce the same kind of blockbusters as the main studios. They can begin to act like their parents and forget to maintain their focus. Miramax, for example, now owned by Disney, is now pursuing big-star blockbusters with films like "Cold Mountain". In large companies, the pressure to conform and converge is so strong that boutiques are constantly under pressure to do better, reach more broadly.
We've argued before that the new oligopoly is expert at adapting to changes in the environment. But dinosaurs are suited to an environment that matches their vast size; break up that milieu into small niches, and the big guys may have some trouble adapting. Rich hopes, and we do to, that the fragmentation will lead to moderate investments in products that appeal to smaller, focused audiences giving the chance for the small guys to survive and even thrive.
