From Ava Seave's perspective, there's a lot wrong with the current state of the media business. For most consultants, the plan is to dole out that wisdom to clients with a steep hourly billing rate.
The Harvard MBA and Columbia Business Professor had another idea -- she wrote a book.
And not just any book, a no-holds-barred media takedown that's now making the rounds of executive suites and editorial operations alike. The ominously black-covered book, The Cure of the Mogul is a team effort, written by investment banker and Columbia Professor Jonathan Knee and Seave's husband and noted economist Bruce Greenwald.
The book's thesis is simple -- large media mega-mergers don't add shareholder value. Read this page turner of an economic analysis and decide for yourself.
Rather, I thought it would be more interesting to ask Seave what DOES work -- and what trends and solutions are starting to gain ground (and make money) for her media clients.
Rosenbaum: You started your career in the magazine business, so you're not one of these consultants who gives advice from high in the ivory tower -- even though you do insist that I call you Professor Seave (just kidding). Tell me how you got into media:
Seave: I started after college being a photography editor at a culture magazine. I was an editor; I did a lot of writing and that sort of thing. And I ended up going to business school afterwards but went right back into the media business on the business side. So, I worked for a big book publishing company, magazine distribution company, I worked as a general manager at the largest custom publishing company ever, which is called Cable Guide, and it had a circulation of like six and a half million copies of a magazine that went out to cable subscribers, I was the General manager of The Village Voice for quite a few years, and I was a General Manager at Scholastic, which is a children's book publishing company and I worked in a direct response business there. That was about 15 years of work and then I've been with Quantum Media for 11 years; we started the company ourselves.
Rosenbaum: So, now in addition to the consulting, you teach at the Columbia Business School -- what's your area of focus?
Seave: I teach a course called Media Strategy. And this year I've added an additional course at a Journalism School, which is called The Business of Journalism. Which is also what is going on in the business of the Media Business; but from the point of view of the people who are working in the business. I
Rosenbaum: So, I've read the book, and I know what's not working. The whole "synergy" thing that promised that AOL+Time Warner would equal five rather than two -- or I guess not even two any more. But what is working - talk about what you're seeing regarding content Aggregation and Curation.
Seave: In the book we make clear that there are three kinds of media experiences if you are a company. One is content creation, which is an author, or in some cases, if you are a Bloomberg, the content in that is stock prices or bond prices. And then there is this thing called aggregation and that means that you collect all of the information, package it up, and actually distribute it to somebody else, so you're the middleman. And traditionally that would be something like the big music labels for example. Where they would find artists, package them, market them, then they would get them to the final distribution channel, the retail side. So, curation was always the most profitable part of the business. So, when you do aggregation and packaging that's really where you can put your stamp on something and you can keep customers close to you because they like the way you do it. (Video Link)
So, it's always been there, it's just that somehow, in the discussion of media companies it just wasn't recognized as such.
Rosenbaum: And you've talked a bit about "The Conundrum of Costs" -- explain that.
Seave: I think the real conundrum for companies is "How much is that gonna cost them?" And can they keep the quality up? And by always having this opportunity, and if it's really super expensive, to always maintain it and to take care of it.
I think that every media company has to have some sort of participation vertical, within their media business. It is part of consumers' expectations now of what they can do. If you let consumers participate by going to YouTube in general you are losing out on a lot of pretty good video or pretty good comments that you can sell, or that you can get more engagements from your other users. I do think though, they are cost issues and every time you raise the ante for these media companies, you have to have this other thing, you have to have links. You have to have a place that people can upload video.
Rosenbaum: Can you share a specific example?
Seave: One of my favorite examples is a client we work with called Taste of Home. Taste of Home is a division of Reader's Digest. And what's really interesting about Taste of Home, is that it was the original user generated material company started as a magazine; this is before the Internet age. Taste of Home has taken that idea (of UGC) and basically run with it in terms of its electronic presence on the Web. It has a very active set of users of their Web site as well as it has content from all sorts of places. One of the examples is that, about a year ago, they introduced video with Magnify, and they have their own videos and they have videos from across the Web that are appropriate and they manage to use them well, their readers and users participate in whether these are good videos or bad videos. And advertisers really like it. So there is a situation that they have a sort of combined highbred situation where they have print publication, they have user and reader engagement, they have really a flow between print and electronic and they have a curation aspect of it across the board and so, that's a really successful business.
Rosenbaum: So what about trust? Do readers need to trust the curation and aggregation of the sites they frequent?
Seave: Trust is a really highfalutin' way of thinking about it. What it really is, is a consumer won't think about that, they won't say, "I trust you for picking out this." They would say, "Oh I like what you do, I like the voice, I'm used to this." In the parlance of strategy, this becomes a customer's captivity, because customers make a small decision (I'm talking about readers or users) everyday or twice a week, or a few times a week, to go to the Web site, and they look at it and say, "Oh, this appeals to me, I understand what this is and I am going to watch it, or I am going to read this recipe, or I know that chicken recipes that say they have no cream but really has no cream but still tastes okay." So it is about judgment and this idea of curation once again. But from a standpoint of a customer it is very subtle. They don't know that they are basically becoming more addicted to the viewing taste.
Rosenbaum: Ok, Prof -- what's next, what should media folks be looking out for?
Seave: I think that the actual idea of curation and aggregation and packaging stuff and being the in between, between the content production and getting it to a consumer is exactly the right place to be. I think that video is really the future of the Internet as well. The text business is where I come from and where I live and it's easy to search, and so forth and so on, but YouTube as I understand it is the second largest search engine. What is that about? That means that people who are younger than me think of things in video and it is really, really important for all media companies to be in pictures at this point. So, that's the reason why I am interested in Curation, I have a lot of faith in this space and I think it's gonna go really far, and it's gonna be in the right place with the right technology. (Video Link)
Watch the video of this interview here.
Ava Seave is an Adjunct Associate Professor in Finance and Economics at the Columbia Business School and a Principal of Quantum Media, a leading New York City based consulting firm focused on marketing and strategic planning for media and entertainment companies. As a Quantum Media principal, she has led numerous consulting engagements and has provided senior-level management consulting services to many companies in a broad range of assignments.
Watch all the videos at CurationNation.org