Don't Look Now, But Old Media May Be Figuring This New Media Thing Out

from the slowly,-but-surely dept

Wed, May 30th 2007 8:37am — Mike Masnick

It's not much, but there are a few signs that some "old media" companies are starting to figure out what makes new media tick. This morning's announcement that CBS is buying last.fm for $280 million isn't all that interesting on its own -- but it's one of a pattern of recent deals by so-called "old media" companies that have them looking to build or buy into communities, rather than just content. The mistake that many media companies have made over the last few years is the belief that the content was king -- and as long as they had the content, the community would form naturally. What people are noticing is that the community is important and it's hard work to build one. Of course, recognizing that is only the first step. The real question is what these companies will do to cultivate these communities. In most cases (MySpace being the one exception so far), these types of purchases tend to wither and die once they become part of a larger company (and the entrepreneurial souls of the community move on).

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7 Comments

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Chambers, 30 May 2007 @ 9:14am

I'm curious what examples exist of "these types of purchases" withering and dying.
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Jamie, 30 May 2007 @ 10:05am

Re:
Lycos, Go.com are two off the top of my head that I remember from the the old days. Both were bought by big media companies that didn't seem to know what to do with them. I'm sure there are more.
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Wolf0579, 30 May 2007 @ 11:05am

I've always wondered why the networks didn't just stream their content, commercials and all. They could then charge the advertisers based on the requested streams, as well as the broadcasts. I am astounded at the reluctance of the major networks and other entities like ESPN, History Channel, etc. for missing the boat on this. Is the hardware needed that much more of an expense considering the added income?
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Christopher Walken, 30 May 2007 @ 12:14pm

Kinda cheap, no?
For all that data and a bunch of users, relative to other acquisition prices, I think $280 million was a steal.
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tracker1, 30 May 2007 @ 12:14pm

re: Wolf0579
Yes... well, not so much compared to say the costs of a broadcast station. But the advertising expense vs. viewers is far lower than even satellite channel advertising. It's a lower ROI, but the costs for hardware and bandwidth are much lower, and the relative quality of streaming with the likes of mp4, flash9, and windows media are far greater, and closer, or exceeding broadcast quality than ever before...
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Brian Weinstein, 30 May 2007 @ 2:53pm

Surprising
Anyone a little surprised that while last.fm is being sold for 280 million, Sony wants to give 500 million to Club Penguin?

http://www.techcrunch.com/2007/05/16/club-penguin-may-be-acquired-by-sony-for-500-millio n/

Club Penguin:
http://www.clubpenguin.com
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Lawrence D'Oliveiro, 30 May 2007 @ 5:24pm

Connectivity, Not Content
Actually, the realization that the key to the success of the Internet is the connectivity, not the content, is not a new one.
In the early days of the Internet, there were lots of other, proprietary, networks that had lots of their own content locked up (remember CompuServe, and AOL and MSN in their original forms). They didn't really see the Internet as competition, since its available content was clearly inferior. Yet it succeeded in surpassing them, to the point where they had to adapt or die.
It turns out this lesson may apply to broadcast networks as well. Look what happened to Howard Stern when he left free-to-air radio to join Sirius: suddenly most of his audience disappeared. Did his content change? No, it wasn't the content, it was the connectivity--FTA gave better audience connectivity than subscription radio did.
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