For about a couple of years now, I’ve been telling newspaper executives - both privately in discussions and publicly on this blog - that they should rush to scoop up the most promising online video content startups (75%) and online video technology (25%) players that fit well with their strategies because it’s their only salvation. I could hyperlink each and every one of those words in the previous sentence to something I’ve written.
The rationale was:
- online video advertising will remain a joke for the next couple of years,
- VCs will start to get impatient and move on to their next pipe dream,
- asset prices will start to get less crazy (private asset valuations are more outrageous than public asset ones, let’s face it),
- you can build up your position to take advantage of online video before the online video revenues start to become material.
Did they listen? Nope.
Did anything change in their prognosis? Nope. Why? Because the fundamentals of their business only got worse, faster, and they did not really jump on the online video bandwagon. Remember: to TV-centric media firms, online video is a threat. To print-centric media firms, it’s not: it’s the silver lining, the salvation and a potential cure to their woes.
Turns out newspapers are dying faster, due to their inactivity. Now, as layoffs pile on, it becomes harder to justify buying online video assets that don’t make much revenue and command lofty multiples… a few years ago, before the layoffs were being announced, it could have passed muster. Now? It’s harder, just ask Sam Zell.
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