Why is media such an owner-driven, personality-centric business?
Globally, almost every major media company is owner-driven. Think News Corporation (Rupert Murdoch), Viacom (Sumner Redstone), Liberty Media (John Malone), Martha Stewart, Oprah Winfrey ... the list goes on. While there is no ready analysis, roughly half of the world’s top 100 media companies are tightly owned and controlled usually by one man or a family. Many of these may be listed, like News Corporation. It is, however, for all practical purposes a Rupert Murdoch show.
Even in many professionally-run, large media companies, it is a single manager who ends up being the star. Remember Michael Eisner of Disney or Gerald Levin of Time Warner. Why does media, of all businesses, take so much to a personality cult? Why are media barons such rock stars? Why do pharmaceutical or IT owners not have the same glam quotient? Here are two guesses.
One, it is the nature of the business. In 1991, Richard Lee (the former owner of Star and a Chinese tycoon) gave Subhash Chandra a hard time when he went to Hong Kong to buy a transponder on AsiaSat. At that time, it was the only satellite beaming into India and China. Mr Chandra was made to wait for hours before he was finally spurned. But Mr Chandra doggedly pursued Lee, convinced him that he was serious and paid three times the asking price for the transponder before he could launch Zee TV. It is now one of India’s largest media groups.
A young and inexperienced Samir Jain earned the wrath of every major editor in the eighties (and since), but stuck to his guns and changed the Times Group to match his vision. It is today India’s largest media company. Ronnie Screwvala was stuck being a television producer for more than a decade before he got it right and UTV became the content powerhouse it is today.
The point is it needs tremendous vision, tenacity, leadership skills and fantastic instincts to build a media business. If you are such a person, chances are that you are also a strong personality. You are constantly battling against governments, regulators, and incumbents within a company and outside in an attempt to serve a fickle audience. Each one of the people mentioned above either created a new market or changed the rules of the game to make the business larger and more profitable. And they did it at a time when there was no context or benchmark to do what they were doing.
That is also true for other industries. However, the impact of changes in, say, the editorial policy of a newspaper, or a film’s effect on society, is not just about its revenues, but it is also about its influence.
That brings us to the second guess about why personalities thrive in the media industry. It is always better to have a face or a name on to which you can tag a company. Nobody accuses the Time magazine or Fortune of being biased because they are owned by Time Warner. But The Sun or Fox News are constantly under fire because they are owned by “Rupert Murdoch”.
The results of being such an individual-centric business, of course, are mixed. It makes media a fun business to watch. That, however, is not necessarily a great thing for shareholder returns. Globally, media has remained one of the most poorly performing sectors. A recent Ernst & Young global report says except cable networks and internet companies, almost no other segment of the media business shows potential for profit growth. Conglomerates fare the worst in the analysis.
Another 2009 book, The Curse of the Mogul, analyses how the personality-driven cult in media has led to bad business. It provides a great conceptual framework for the business while using the media owner’s perspective to analyse it. By the time you finish the book, you realise that the authors don’t think much of the owners. They have just used the glam quotient of the business – the personalities of the men who run it – to make the book saleable and appealing.
One thing is evident: the world loves a character and the media business is full of them.
