Despite the general intent of new book The Curse of the Mogul (2009, Portfolio, 304 pages, U.S.$26.95) – which is essentially to suggest that media moguls worldwide (here defined as “any media company executive or owner with significant influence over significant operations”) are at fault for the destruction of value in the media markets – the three authors are quick to point out that the moguls themselves may be seen as a metaphor for how their respective industries have been run over time. They strive to impart that big media companies have been underperforming for over a generation, not just since the emergence of the Internet as a hated competitor. Thus, they give detailed descriptions of various companies’ rises and missteps, with a primary focus on America. They highlight the key “media myth” as follows: “The media industry involves managing creative talent and artistic product and as such is not subject to appraisal using traditional strategic, financial or management metrics.” The book takes a look at prominent media moguls of both past and present, noting career highlights but also taking great lengths to detail the inevitable strategic mistakes that come from resulting bloated egos. The authors hope to distinguish between those egomaniacal metrics favored by the media industry and those that should actually interest the public. As stated in a recent interview, “We think that media businesses can evaluate themselves with our framework and think about how they can find ways to create and defend their competitive advantages – and not make crazy acquisitions or have wild expectation about synergy among unrelated segments.” The latter comment reflects both the positive and negative elements of The Curse of the Mogul. Between them, the three authors have more than enough authority to analyze the business practices of modern times’ most notorious moguls. Jonathan A. Knee, a longtime investment banker, is also an adjunct professor and director of the Media Program at Columbia Business School in New York City. Bruce C. Greenwald, an economist, is the Robert Heilbrunn Professor of Finance and Asset Management at the same university. Ava Seave is principal and co-founder of the Quantum Media consulting firm and has held management roles at Scholastic Inc. and the New York City weekly, The Village Voice . Their academic leanings result in the only notable flaw of the book, which at times veers too far into the lexicon of economics to appeal to a casual reader. Those moments aside, the book’s overall message is clear and easy to absorb (this coming from someone who didn’t study a lick of economics in school). As an example of the ways in which successful media companies end up hurting themselves through pig-headed practices, the authors discuss the shift in the gaming industry from Nintendo’s dominance in the late 1980s and early ‘90s to the present-day growth of online play. “As computers get more powerful and networking interactive technology improves for the average home user, downloadable games and games played in a virtual reality allow game designers to bypass retailers entirely, and are marketed directly to consumers over the Internet by the publisher.” Thus, the point is made that the advent and spread of high-speed Internet across the globe reflects the public’s ability to bypass the middlemen, i.e., the moguls. And, it is suggested that if the media moguls don’t begin to take into consideration the needs of the shareholders (and consumers in general), the public loyalty required to maintain industry dominance will disintegrate. The Internet is highlighted as a major player in the reformation of the newspaper publishing industry as well. Which is to say, media moguls should be paying attention to these shifting trends and learn to adapt to them in order to maximize their empires’ profits. The authors point to “a fundamental and consistent disconnect between the strategies pursued by moguls and structure of the industries in which they operate” as a major source of poor overall performance. Since 2000, the world’s largest media conglomerates have written down $200 billion in assets from their collective balance sheets. The Curse of the Mogul suggests that these losses reflect “the level of desperation among media moguls faced with new competitors, new technologies, and new customer demands.” “If you are already the CEO of the largest consumer magazine or newspaper publisher in say, Holland, what do you do for your next act,” the book questions. “Local antitrust laws probably prohibit further consolidation at home. You have no expertise for operating such businesses in other markets and history has shown that buying such businesses in other markets – particularly in the giant U.S. market – is either prohibitively expensive, likely to end badly, or both. You could simply focus on operating these businesses well, growing them organically, and returning the extra cash to shareholders. But what fun is that?” So defines the faulty mogul logic re-tagged in this book as a “curse,” and further implies that the public must be aware of the mogul thought process in order to avoid being victimized on the market front. A permeating theme throughout is that the biggest flaw of modern mogul mentality is a reliance on poorly conceived mergers and acquisitions. The hope is expressed that upon reading the meticulously detailed accounts of past industry successes and failures, “a reader, when finished, will have acquired the tools to distinguish between ‘great’ media assets and ‘lousy’ media assets.” The average consumers of the world are hereby given the opportunity to make their own informed decisions about media industry movements, rather than relying on blind faith in ego-choked moguls. One of the first points made in the book is a troubling one. Apparently, of the 15 largest U.S. media companies, only four are broadly held public companies without absolute control or under disproportionate influence of a mogul. “The ability of the controlling holders to do as they will, for better or for worse, without fear of at least immediate repercussions gives media moguls a certain swagger not as readily found in other industries,” the authors suggest. Note to public — that swagger is not necessarily indicative of business savvy. Generally speaking, the tone of the book is fluid and easy to read, making the economic concepts that much more accessible. In the earlier referenced interview, the authors noted that the walls had come down between the public and old school content generators. “Anyone, and I mean anyonewith just a few bucks can put out content these days – publish a blog, make a film, put a song online, even print a book. Nothing exclusive there,” they seem to be warning the moguls of the world. “If you base a company on something that has an infinite supply and think somehow the laws of supply and demand will make you rich, you are sadly mistaken.” The book offers up six principles for good moguls to live by, principles that in theory could be adopted by upstart entrepreneurs as well: 1) “Dare to dream.” 2) “Keep it local, keep it focused.” 3) “Efficiency is cool.” 4) “Don’t be such a big shot.” 5) “Watch your back. 6) “There is much to be said for dying with dignity.” This renders the book an indirect how-to guide on to avoid being duped by mogul pomp and perhaps be inspired to reshape the media industry as a whole. KR V I D E O • A G E JA N U A R Y 2 0 1 0 8 B o o k R e v i e w How Media Moguls Hurt Themselves & You
RkJQdWJsaXNoZXIy MTI4OTA5