Prediction: Traditional Media Will Look To Buy New Media On Cheap
The author attends the Future of Business Media Conference.
The current story on business media was told most tellingly by the number of people who could afford to spend the time or money to attend a gathering on the Future of Business Media.
This year's event, held today at the Edison Ballroom in Manhattan, had about half the number of seats as last year. And, at several points during the day, a third of them appeared to have gone empty.
Still, the year went swimmingly for conference sponsor ContextNext and its founder Rafat Ali, who cashed in at just the right time with a sale a few months back to Guardian Media Group. Ali led a panel of speakers who pondered what mergers and acquisitions in the media space might look like in the coming months.
Michael Wolff, the entrepreneur and media pundit whose book on News Corporation (NWS) chairman Rupert Murdoch is due out next month, couldn't help but remark on the money Murdoch would have saved had his Dow Jones acquisition occurred just 6 months later.
Wolff dryly noted that Murdoch paid a premium price for a newspaper on the eve of the biggest financial downturn of our lifetime, which has to be called a business mistake.
"He gets what he wants," Wolff said, adding that it was during his conversations with the 77-year-old Murdoch for his upcoming book that he came to educate the man on enterprise businesses (business-to-business-to-business), like the Factiva database that came with his purchase of Dow Jones.
"Factiva was totally irrelevant to him. He wanted the newspaper," Wolff noted. "I think he was pleased" to learn that a profitable side business was attached.
As for the Fox Business Network, Wolff said he begged Murdoch to tell him prior to publication if he plans to fold the year-old endeavor. He went on to describe News Corporation's strategy as one of starting something with expectations so low that people who come in and see it say, "Oh, this isn't so bad."
He went on to predict that deals will happen, just not with the eye-popping valuations best demonstrated by CNET's $1.8 billion sale to CBS (CBS) earlier this year. "They sold at the top of the market to a dumb buyer," Wolff explained.
The consensus among Wolff and the investment bankers he had flanking him was this: Traditional media companies buying into new media companies -- particularly those with some game-changing technology -- will be the trend in coming months. And look for the sellers to be financing the deals themselves.
According to Jim Casella, chairman and CEO of Case Interactive Media and CEO-in-residence of the Austin Ventures growth equity practice, for companies with cash to spend, it's a bit like being in a candy store. "If you have any money, this is one great period. The best thing in the world has happened to you."
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