Category: Analysis

Media companies have become collections of random assets — worth less than the sums of their parts, says financial columnist James Flanigan in the Los Angeles Times. He argues that media companies must slim down and focus on a single medium and decide whether they’re in the business of production or distribution.

The average return on invested capital over the last five years of the four major media firms — AOL Time Warner Inc., Walt Disney Co., News Corp. and Viacom Inc. — is less than 4% annually. (Vivendi Universal is excluded because it has no profit.)
That is laughably far below the 13% average return on capital for all large U.S. companies in the same period, as measured by Forbes magazine.

William Safire goes further, saying that even if they decide to focus, media giants should not be permitted to dominate their industries. Safire’s libertarian brand of Republicanism is at odds with the current regime’s pro-corporate, anti-civil liberties Republicanism:

Does this make me (gasp!) pro-regulation? Michael Powell, appointed by Bush to be F.C.C. chairman, likes to say “the market is my religion.” My conservative economic religion is founded on the rock of competition, which — since Teddy Roosevelt’s day — has protected small business and consumers against predatory pricing leading to market monopolization.

Flanigan and Safire help make the case that in addition to being bad for democracy and for consumers (reason enough to break up the media giants), the current trend toward gigantism is bad for stockholders.
Now that Steve Case is an a mere (albeit big) stockholder and no longer a manager at AOL Time Warner, he should insist on breaking up the company.

While I was in Belize, I found time to read Fast Food Nation and Culture Jam, both of which got me thinking (or kept me thinking) about how out of control corporations have become and how complicit we all are in this situation.
The issue that Culture Jam raises–which is still pretty much limited to the left–is that it’s a big problem that corporations are regarded in US law as having the same rights as human beings. That leads to the perverse idea that they should be allowed to participate (spend money) in the political process, for example.
I’ve always believed that the US corporations should not be allowed to violate our constitutional rights any more than the government can–especially the first and fourth amendments. In any event, it occurred to me that corporations were humanlike, but not quite human, and that something like Asimov’s Three Laws of Robotics ought to apply to them.
Today I found this article on Nike’s claim that it has the right to lie, and the author’s suggestion that Asimov might have already thought this problem through. Some ideas are just in the air. (Thanks, WebWord!)
The chapters of Fast Food Nation on worker safety in the meatpacking industry broke my heart. I don’t know why, but I’m still stunned by the cruelty and indifference with which some people are able to treat others. But I am ashamed that as a nation we’re incapable of electing a Congress willing to do something about this.

I’m back from Belize.
Spending a couple of weeks off the grid made me realize how little access I need, but how much I hate having someone deny it to me.
My only Internet access was an Internet cafe that was a 15 minute boat ride from my resort on Ambergris Caye. Phone calls home were a couple of dollars a minute at the front desk of the resort or a dollar a minute at the Internet cafe in town.
In the ten days that I was in Belize, I didn’t miss the Net or NPR or TV at all, and I think the general lack of electronic and automotive background noise contributed to a sense of peace and well-being. The biggest disturbance was a couple of boneheads that kept cruising up and down the beach on motor scooters until one of the neighbors chewed them out.
I doubt I would have appreciated this isolation on September 11, but it probably would have been better for me than watching CNN.
I thoroughly enjoyed dropping off the grid. What I hated was that others were in control of my access. The resorts on the north coast of Ambergris Caye had apparently decided together not to bring in newspapers. Our hotel was using their control of their phone to jack up the price of a call to the US and keep me from using AT&T’s low-price service. And it seemed pretty clear that the price floor was kept pretty high by Belize Telecom Limited, which controls telephone and Net access in Belize.
What worries me is that if ILEC’s had their druthers, and the Republicans are inclined to let them, phone calls in the US would be be a dollar a minute and we’d all be sharing dial-up lines in Internet Cafes.

ICANN is planning ot add a few new top-level domains to supplement .com, .org, .net, .edu, .gov, .mil and the newly-created domains that no one wants.
I don’t necessarily agree with Bob Frankston that domain names per se are the problem, but it seems to me that we’re all poorly served by the current system.
Why not introduce a thousand new top-level domains, or ten thousand? From the perspective of Verisign/Network Solutions and the competitive registrars, it’s not desireable because it eliminates the current artifical scarcity that makes dot-com domains saleable (if not as valuable as they were in 1999).
But the market is meaningless. People are getting hurt because of the pretend-authority of a dot-com address.
When I bought mediasavvy.com, the incumbent speculator was asking $1500 for it. He settled for $175, including five years’ registration. I’m currently trying to buy a domain that has expired a week ago, but the registrar still hasn’t released it.
The current system is corrupt and corrupting. Domains should be cheap as dirt and easy to get.

Snark Hunting features a quiz exploring the slick, opaque, and forgettable names that Landor Associates extrudes for its customers (e.g. Avolar, Midea, Avaya, Spherion, and Onity). (Thanks, WebWord)
As Snark Hunting says in an earlier piece:

Why do most naming and branding firms stink out loud? These days, asleep-at-the-wheel branding firms assign naming projects only three objectives:
1. Create consensus among the decision makers
2. Find a name that is trademarkable
3. Secure a reasonable URL
The missing step of course is branding, the most elusive step for branding consultants. That’s the one where the goal is to create an identity that supports a unique positioning proposition, differentiates the brand from its competitors, is memorable, interesting, evocative, a deep well for marketing and advertising; indeed, is an advertisement in and of itself.

They’re letting the customers off the hook. A lot of corporations don’t know what they are or what they do — let alone what they stand for. It’s easy to be sympathetic with the desire not to close off options, but this also leads a lack of focus that is obvious to our customers. Does your company know it’s own identity? Score your company’s home page:

• Subtract one point for every picture from a clip-art CD (two points if it’s of people in suits, three points if those people are seated around a table or talking on a phone). Add one point for every picture of a physical product, non-executive employee, or person using your product.
• Subtract one point for every use of the word “solution”, innovation”, “technology”, “values” or “community” and add one point for every mention of an actual product or service your company offers for sale.
• Imagine ten potential customers reading your home page. Add one point for each who could identify the industries that are the source of the majority of your firm’s revenue. Subtract one point for each who cannot.
• Imagine those same ten potential customers again. Add one point for each who can state definitively whether they fall into a clearly-defined category of customer (“small-business owner”, not “people who wear suits and talk on cell phones”). Subtract one point for each who cannot.
• Subtract five points if your home page features a Flash animation with moving words other than products, or identifiable industries; abstract geometric figures; or clip-art. Subtract another five points if it’s a splash screen.

Warning: this scale is not linear.

Tim O’Reilly reminds us, “The Right Term is Copyright Infringement“, not piracy or theft. We’ve allowed the copyright industry to colonize our vocabulary on this issue. It also leads to outrages such as the use of federal cops, criminal law, and federal prosecutors to resolve civil disputes. (Thanks, Dave Winer)
This follows hot on the heels of another indispensible column by Tim that begins the indisputable thesis that Obscurity is a far greater threat to authors and creative artists than piracy and reminds us that we’ve allowed the copyright industry to own the issue of fairness to artists.
It’s great to see someone who controls a lot of copyrights to take this stand.

MediaGeek not only pointed me to this great log of news on media ownership rules changes, but asks the correct question about it: “how many of these articles don’t come from the business section of their respective publications?”

OK, I give up. I have no idea why there’s so much space before the tables in the next entry. Anyone who’s reading this know why it’s happening?
[UPDATE: This was fixed within an hour of posting by the first comment attached to this message. Thank you!]

This MSNBC story displays all the worst sins of Flash in news sites: useless animation for the sake of animation, long load times even on a high-speed connection, and crashing on a Macintosh. Then there’s their use of the word “interactive” as a noun to denote an interactive news story.
Couldn’t this story have been told better (and less expensively) using HTML?

Maistream marketers continue to foul the waters in which we all have to fish.
According to Marketingfix, Activision, Elvis Costello’s label, and thesite.org have hired an agency to post fake endorsements of their products to Usenet; and “MP3.com, owned by Vivendi Universal, requires users to provide an e-mail address before they can listen to music. Then, without offering a choice or notice, the site adds that address to six mailing lists, including a music newsletter and one for “partner product announcements.”
Why so much lousy marketing. Well, it works. Over at Clickz, Rudy Grahn admits a lousy, annoying banner he tossed off in a couple of minutes continues to live on–because it works.
Meanwhile Bonzi’s deceptive, jittery web junk is omnipresent–because it works. According to DoubleClick, “rich media” ads are gaining share–because they work (ten times as well as regular banners).
Big companies like Verizon and SBC assert their right to sell your private information to whomever they please and assert that it’s not simply their right, but that they’re doing you a favor. And Sprint PCS distributes flyers to their customers labeled “Sharing your information and protecting your privacy” without appreciating the irony.
But even Sprint can appreciate the irony of a spammer drowning in junk snail mail. He’s going to have to opt out of every one of those lists.