Old Media Buying Model Insufficient to Spawn New Media Success

I don’t know that this was the best example for trying to convince “old” media organizations to change their business models. Acquiring companies is a very popular and successful method for companies to grow. Consider such modern companies as Microsoft, Google and Cisco. The true question for the NYT is whether they have the right platform to integrate that content and what synergies exist between them and their new media properties.

Also, it is not always cheaper to “hire people” instead of acquiring established products and brands. When you factor in the failure rate of new hires, training costs and the time for a blog to reach critical mass, it might well be cheaper to buy a blog (or a social network outright. Each make v. buy decision needs to be carefully evaluated before execution. Whether NYT did that in this case is another question altogether.

I don’t know that this was the best example for trying to convince “old” media organizations to change their business models. Acquiring companies is a very popular and successful method for companies to grow. Consider such modern companies as Microsoft, Google and Cisco. The true question for the NYT is whether they have the right platform to integrate that content and what synergies exist between them and their new media properties.

Also, it is not always cheaper to “hire people” instead of acquiring established products and brands. When you factor in the failure rate of new hires, training costs and the time for a blog to reach critical mass, it might well be cheaper to buy a blog (or a social network outright. Each make v. buy decision needs to be carefully evaluated before execution. Whether NYT did that in this case is another question altogether.

Damien,

Thanks. You make an important point that acquiring companies is one of the most used methods that organizations use to expand, and they succeed at this strategy much of the time. However, I argue that properly fostering innovation within a company is much better than acquiring it most of the time. I’m not saying that acquisitions don’t work.

Also, human capital does cost money, and not everyone succeeds. But in most cases a few months of salary (along with benefits, office kitchen supplies, etc.) is likely cheaper than buying an existing brand. If the employee flops, let them go, but what if the newly acquired site fizzles? Either reinventing or selling it takes additional investment.

Damien,

Thanks. You make an important point that acquiring companies is one of the most used methods that organizations use to expand, and they succeed at this strategy much of the time. However, I argue that properly fostering innovation within a company is much better than acquiring it most of the time. I’m not saying that acquisitions don’t work.

Also, human capital does cost money, and not everyone succeeds. But in most cases a few months of salary (along with benefits, office kitchen supplies, etc.) is likely cheaper than buying an existing brand. If the employee flops, let them go, but what if the newly acquired site fizzles? Either reinventing or selling it takes additional investment.

I don’t agree that this is another example of how old media companies not ‘getting it’. Nor do I see how purchasing Freakonomics prevents The New York Times from nuturing from within.

The NYT brought on board an innovative and creative mind. Or that attracts a lot of attention and one that could be looked upon as a brand. And Levitt could help affect that culture with the company ‘change’ in the right direction.

Why, specifically, do you think that the hiring of Levitt means that the company will not also develop from within.

I don’t agree that this is another example of how old media companies not ‘getting it’. Nor do I see how purchasing Freakonomics prevents The New York Times from nuturing from within.

The NYT brought on board an innovative and creative mind. Or that attracts a lot of attention and one that could be looked upon as a brand. And Levitt could help affect that culture with the company ‘change’ in the right direction.

Why, specifically, do you think that the hiring of Levitt means that the company will not also develop from within.

Jonathan,

I’m not saying that by acquiring the Freakonomics blog, the New York Times is not able to nurture efforts within its organization, but I would’ve appreciated effort from the paper to try something else. Perhaps it has economics writers who are just as quirky as Leavitt and Dubner or could find another economist that it could hire who could take the whole armchair economist concept in another, yet brilliant, direction. We could potentially have an additional fascinating blog to read, and NYT could take more credit for that.

Jonathan,

I’m not saying that by acquiring the Freakonomics blog, the New York Times is not able to nurture efforts within its organization, but I would’ve appreciated effort from the paper to try something else. Perhaps it has economics writers who are just as quirky as Leavitt and Dubner or could find another economist that it could hire who could take the whole armchair economist concept in another, yet brilliant, direction. We could potentially have an additional fascinating blog to read, and NYT could take more credit for that.

Steve – I actually think buying (or renting) the Freakonomics blog was a really astute move by the New York Times. The thing I think you are missing here is that Freakonomics is a huge brand in its own right. And it is a smart brand that fits in well with what the Times is trying to project.

Sure, you could probably find writers close to as good as the Freakonmcis guys and put together a very good blog. But it is unlikely you will catch the lightening in a bottle that Dubner/Leavitt have already built.

Steve – I actually think buying (or renting) the Freakonomics blog was a really astute move by the New York Times. The thing I think you are missing here is that Freakonomics is a huge brand in its own right. And it is a smart brand that fits in well with what the Times is trying to project.

Sure, you could probably find writers close to as good as the Freakonmcis guys and put together a very good blog. But it is unlikely you will catch the lightening in a bottle that Dubner/Leavitt have already built.

Todd,

I agree; buying the Freakonomics blog was smart. However, what if the NYT or other large media organizations developed the savvy to capture “web 2.0″ lightening in a bottle more frequently on their own?

Todd,

I agree; buying the Freakonomics blog was smart. However, what if the NYT or other large media organizations developed the savvy to capture “web 2.0″ lightening in a bottle more frequently on their own?

Steve

To me it makes sense for NYT to hire/buy a Freakonomics and then build around it from withing. Or Ana Marie Cox and Time. I doubt there is a shortage of talent out there.

The million dollar question is, why haven’t they done it alreadY?

Steve

To me it makes sense for NYT to hire/buy a Freakonomics and then build around it from withing. Or Ana Marie Cox and Time. I doubt there is a shortage of talent out there.

The million dollar question is, why haven’t they done it alreadY?

Steve – the Freakonomics brand is much bigger than any blog. The book sold 3 million copies and they have a sequel coming out. I think there are benefits to being associated with this brand that go way beyond the traffic/revenue the blog generates.

I also think Jarvis has some astute thoughts on how this differs from a traditional media company acquisition:

http://www.buzzmachine.com/200.....n-or-join/

Steve – the Freakonomics brand is much bigger than any blog. The book sold 3 million copies and they have a sequel coming out. I think there are benefits to being associated with this brand that go way beyond the traffic/revenue the blog generates.

I also think Jarvis has some astute thoughts on how this differs from a traditional media company acquisition:

http://www.buzzmachine.com/200.....n-or-join/

Todd,

Please note the clarifications I made to the post that more accurately reflect NYT‘s partnership with the Freakonomics blog.

I’m not saying that this partnership isn’t a wise decision, but what I hope to get across is that partnerships and acquisitions don’t replace the need for fostering in-house innovation. Established media companies should not feel that deals like this one — as smart as they are — are sufficient to truly establish a web 2.0 presence.

Also, I want to note that I agree with Jeff Jarvis in that post that you link to when he says that newspaper sites can’t be everything to everyone. However, that doesn’t excuse them from bolstering their offerings to their core audiences.

Todd,

Please note the clarifications I made to the post that more accurately reflect NYT‘s partnership with the Freakonomics blog.

I’m not saying that this partnership isn’t a wise decision, but what I hope to get across is that partnerships and acquisitions don’t replace the need for fostering in-house innovation. Established media companies should not feel that deals like this one — as smart as they are — are sufficient to truly establish a web 2.0 presence.

Also, I want to note that I agree with Jeff Jarvis in that post that you link to when he says that newspaper sites can’t be everything to everyone. However, that doesn’t excuse them from bolstering their offerings to their core audiences.

Jonathan,

Good question. Hopefully, The New York Times will find a way to develop some new features around the Freakonomics blog. So, when the partnership ends, NYT will still benefit from it.

Jonathan,

Good question. Hopefully, The New York Times will find a way to develop some new features around the Freakonomics blog. So, when the partnership ends, NYT will still benefit from it.

So, essentially what you’re saying that this may be a sign that media properties are going to look to simply bring in top names and so nothing to develop from within.

I wouldn’t be surprised if you’re correct there. Sort of like a producer/director for a movie not wanting to give an unknown a chance because they’re looking only for stars.

If that’s the case, then that would be a bad strategy and you’re spot on with that. Because I’ll go to a Freakonomics because it’s Freakonomics, not from the NYT.

So, essentially what you’re saying that this may be a sign that media properties are going to look to simply bring in top names and so nothing to develop from within.

I wouldn’t be surprised if you’re correct there. Sort of like a producer/director for a movie not wanting to give an unknown a chance because they’re looking only for stars.

If that’s the case, then that would be a bad strategy and you’re spot on with that. Because I’ll go to a Freakonomics because it’s Freakonomics, not from the NYT.

Jonathan,

I hope that established media companies will use partnerships to bolster their own offerings, but I suspect The New York Times will simply mainly see this as a traffic/revenue opportunity. However, I think that the strategy you suggest is worth testing.

Thanks for your feedback.

Jonathan,

I hope that established media companies will use partnerships to bolster their own offerings, but I suspect The New York Times will simply mainly see this as a traffic/revenue opportunity. However, I think that the strategy you suggest is worth testing.

Thanks for your feedback.

This is only an opinion and in no way is
it meant to be a negative comment about
today’s media buyers.

Media buyers today, generally because of
employer “downsizing”, have more responsibility and less time to research
their buys.

As a result, although traditional media(
radio-newspapers-tv-magazines etc)impact
might be down…it still works for the
buyer and the client.
Example: A successful “CHR” internet
radio station has a great 24 hour international audience.

For McDonalds, Coke or Pepsi to buy that
internet radio station..would be a natural.
During the day in the USA, your client
reaches the daytime work audience in the
USA.
At night, your “CHR” internet radio station reaches the daytime audience in
Australia, Guam, Taiwan…etc where these
products are also sold.

This buy would work for the client, agency and buyer. However, because of
today’s “downsizing” and additional job
responsibilites, I don’t believe the
media buyer has the time to research these “new media” opportunities.

Thus, because of research time restrictions, the media buyer generally
will stick with the traditional media(
which has less of an impact) but still
works.

This is only an opinion and in no way is
it meant to be a negative comment about
today’s media buyers.

Media buyers today, generally because of
employer “downsizing”, have more responsibility and less time to research
their buys.

As a result, although traditional media(
radio-newspapers-tv-magazines etc)impact
might be down…it still works for the
buyer and the client.
Example: A successful “CHR” internet
radio station has a great 24 hour international audience.

For McDonalds, Coke or Pepsi to buy that
internet radio station..would be a natural.
During the day in the USA, your client
reaches the daytime work audience in the
USA.
At night, your “CHR” internet radio station reaches the daytime audience in
Australia, Guam, Taiwan…etc where these
products are also sold.

This buy would work for the client, agency and buyer. However, because of
today’s “downsizing” and additional job
responsibilites, I don’t believe the
media buyer has the time to research these “new media” opportunities.

Thus, because of research time restrictions, the media buyer generally
will stick with the traditional media(
which has less of an impact) but still
works.