The Sky Isn't Falling For Media

Rupert Murdoch made himself an unlikely hero to media professionals last week by declaring war on what he called Google's infringement of media intellectual property.The media has, naturally, been consumed by the story of its own impending demise. A Google search (sorry Rupert) on the term "death of media industry" yields more than 18 million search results. By contrast, "war in Afghanistan" yields just 9.5 million. Which means the media is spending more time bemoaning its fate than the lives of kids dying overseas.

I'm not denying that newspapers are dying off faster than Paris Hilton sightings on Page 6, but it seems to me that the media is spending too much time finding someone to blame, and not enough time reading Publishing 2.0.

Kevin Weiss, CEO of publishing company Author Solutions, is using technology like print-on-demand -- as well as a mix of on-premise and on-demand business applications to drive his business. He told me the number of new customers is up 30% year over year, and his services business is also up over 30% for the same period. "Book sales are up single digits -- which is better than traditional publishers that are down," he told me.

It might tell us something that Weiss has a technology background, with stints at BMC and IBM, rather than a publishing background.

It occurs to me that there are important similarities between the French financial services industry in the late 1980s and early 90s, when I spent a number of years working at the Paris stock exchange (or Bourse), and the media industry today.

At one point, having a seat at the Bourse was like holding a chair at the Sorbonne. It was a yours in perpetuity, a closed club, and if someone else wanted to buy or sell stock on the Bourse, they had to either use one of the legacy brokers or else acquire one.

Then two things happened that changed the system forever, and sent the industry into a paroxism of Chicken-Littleism.

First, the Bourse introduced electronic trading, which meant to you had to be a lot faster if you wanted to get your customers good deals.

Then, Socialist prime minister Michel Rocard really shook things up (the Socialists always get blamed for the market distortions in France when in fact Louis XIV and Napoleon deserve the blame for French statism) by opening up the floor to more players, introducing U.S.-style competition.

It took a while for people in the industry to adjust. Many brokers still sat around waiting for customers to call, not realizing that new brokers weren't playing by the old rules. New brokers didn't observe proper etiquette regarding your preexisting relationships with institutional investors, and it turned out the investors didn't care either. If someone could make them look better by helping them earn better returns, they'd use them instead of the guy they had lunch with once a week.

Younger brokers understood they had to be more aggressive and actually call customers if they wanted to make sales, but they didn't know anything about how the system used to work, and they offended their older colleagues by wearing shiny polyester shirts and smoking cigars whenever they made a huge sale. As a result, there wasn't a lot of cooperation among traders in the same firm, which had the result of lowering its overall income.

So you had this technological and cultural market disruption that neither the incumbents nor the insurgents really understood how to navigate.

In the case of the media, the clubby relationships between publishers, agencies and public relations people is broken forever. A successful writer friend told me that his literary agent still spends three hours a day "at the club," and unsurprisingly doesn't do nearly the business he used to. People don't work that way in a Facebook world.

Meanwhile, the young number-crunchers straight out of B-school understand the value of Internet-based metrics, but have a hard time explaining things like lifecycle tracking to more senior marketing managers. (Liz Miller, vice president of programs and operations for the CMO Council, told me recently, "A lot of marketers feel they're not equipped to measure these forms of media... [so] we need to educate marketers about the depth of metrics available.")

It seems really confusing because we're in the middle of the change, but the French financial services industry was able to recover its footing; I'm confident that media professionals can do the same.