Michael Wolff: 'Big Media Doesn't Make Anybody Happy'
Vanity Fair's media columnist insists that a breakup of Time Warner is inevitable, foresees most newspapers going out of business, and warns the media world to brace for more "upheaval, displacement, destabilization."

By Patrick Phillips
I Want Media, 02/21/06

Five years ago this month I Want Media posted its first Q&A interview, with Michael Wolff, the acerbic and influential media columnist for New York magazine.

In the interview, Wolff argued that, since many consumers weren't paying for online content, "the Internet as media has failed," and predicted the ultimate demise of stand-alone news sites like Inside.com. In a rare move, Drudge Report posted a link to the Wolff interview; Jim Cramer, the co-founder of TheStreet.com, expressed outrage on Romenesko over the remarks.

The media landscape has undergone many changes in the past five years, and so has Wolff. In November 2003, his widely praised book "The Autumn of the Moguls," a "comedy" about the collapse of the media business, was published. At the same time, Wolff joined with partners (including ad man Donny Deutsch) in an attempt to buy his employer, New York magazine, which Primedia had put up for sale. After his bid was trumped by Bruce Wasserstein, Wolff left his longtime gig at the city weekly to become a media columnist at Vanity Fair.

From his perch at the Conde Nast monthly, Wolff continues to analyze and skewer media institutions and insiders, with his well-known candor, astute insights and biting wit.

I Want Media tangled briefly with the pundit last February, after this site posted a transcript of his keynote address at the Software & Information Industry Association summit in New York. The organization had forwarded Wolff's speech to I Want Media without obtaining his permission in advance. After Wolff requested that the transcript be taken down, it was removed promptly.

I Want Media regrets the misunderstanding and appreciates the opportunity to revisit one of the media world's leading thinkers for his observations on current industry topics -- the deconsolidation of big media, the distribution of television shows on the iPod, the rise of the blogs, and more.

I Want Media: Five years ago you predicted that large media companies would start to "feel pressure to deconstruct."

Michael Wolff: I am so right. Of course, there's also the principle of a broken clock is always right twice a day.

IWM: Viacom split into two companies last year. Up until late last week, investor Carl Icahn had been pressuring Time Warner to break into four companies. Does the media conglomerate structure not work?

Wolff: I don't think it makes sense to anybody. I don't know anybody now who has been made happy by big media -- not investors, not employees, not managers, not consumers. The logic itself does not work.

I mean, let's make a company out of all sorts of disparate other companies -- companies that have no functional relationship to each other, no stylistic relationship, no cultural relationship. Let's put them all under the same manager and make them run smoothly.

We've very clearly arrived at a moment in which everybody says duh, that was a really, really bad idea.

IWM: Carl Icahn is abandoning his campaign to break up Time Warner. Your most recent piece in Vanity Fair suggests that you support his original plan. Should Time Warner deconsolidate?

Wolff: I don't know if it's a question of supporting anybody. I believe that Time Warner will come apart, with or without Carl Icahn. I believe that it is coming apart. I believe that the inevitable exists in virtually everyone's mind and is accepted by virtually everyone save perhaps for [CEO] Dick Parsons.

Not one of the major media companies in the last 15 years has kept pace with the S&P. That can only mean one thing: We think you're a bad investment. Why do we think you're a bad investment? Well, usually it's for the obvious reasons: You're too big, you don't work, you've done a bad job.

IWM: You also said five years ago that "the Internet as media has failed," primarily because people didn't want to pay for online content.

Wolff: Clearly five years ago I was right. I mean, "has" is the thing. At that point in time, I would say it had failed and it did because it had failed to find a reasonable revenue model. Since then it has, and it hasn't been paid content. What it has been is advertising.

IWM: You later told I Want Media: "I distrust everything about blogs. I'm pretty suspicious of people who are performing this act, too." Are you not a fan of blogs?

Wolff: I'm not a fan of the idea that I should be a blogger, let me say that. One should probably be distrustful of blogs. One should probably be distrustful of most things one reads. The quicker the things that you read are written, the more you should be distrustful of them.

IWM: I presume this means you don't plan to become a blogger.

Wolff: I do not. But will I be forced, kicking and screaming? Who knows?

There is a fundamental difference in function here -- to blog, to be a blogger, and to write and to be a writer. It takes me a long time to write a sentence. Bloggers are fast, writers are slow. There's a certain A.J. Liebling line that goes something like: "I can write better than anyone who can write faster."

IWM: New York magazine just ran a cover story on "The Blog" --

Wolff: I never read New York magazine. I never let people talk to me about New York magazine. It does not exist in my universe.

IWM: I'm guessing this is because you made a run at buying the magazine that didn't work out.

Wolff: Exactly. It no longer, as I say, exists in my world. It broke my heart. My family is banned from reading it or mentioning it.

IWM: Would you ever consider buying any other magazines?

Wolff: No.

IWM: How about Radar magazine, which is sort of --

Wolff: No.

IWM: O.K., moving on: Barron's suggests that Google's stock price could plummet 50 percent this year, due to growing online competition and other issues. Will Google turn out to be not such a big threat to traditional media after all?

Wolff: For one thing, that's an easy prediction to make. It's got to go up or down, and somewhere there always exists a ceiling. It seems to me that we're pretty near that ceiling. So even if it drops by 50 percent, it's still been an astounding performance and an incredible idea. And they have had a transformative effect.

Having said that, I think that what we've seen in the history of the Internet is that no matter how good you are, somebody else always comes along. All you have to have is a little better technology. I would assume that that will happen at some point with Google. But they've created an entirely new advertising model or paradigm, if you will. I think that that has to inform every business plan that is contrived in the media business.

IWM: What do you make of television programming becoming distributed via the Apple iPod?

Wolff: It is all part of the commoditization of content. The idea that content is king has turned out to be not true at all. $1.99 an episode, 99 cents a song ... Content is getting cheaper and cheaper.

Actually, one of the interesting things about this era in the media business is that the price of content keeps going down, down, down, down until, in some instances -- certainly with music -- it's mostly free. The content creators are no longer in control of the revenue stream. I mean, what's happening with the iPod is that [Apple CEO] Steve Jobs is in control of the revenue stream, largely.

IWM: Newspaper circulation is declining. Younger audiences reportedly aren't reading newspapers. Media observer Kurt Andersen says that newspapers are f***ed. Do you agree?

Wolff: I'm trying not to say f***ed. But Kurt is obviously right. The end of the newspaper business has been going on now for certainly most of my adult life. Two-thirds of the newspapers that existed probably a generation and a half ago have closed or been merged out of existence.

There are two issues here. There's the issue of news itself. And that's a crisis because the viewers of CNN and Fox News -- and, God knows, the viewers of network news -- are all old, too. So newspapers have a kind of a double disadvantage. They're in the news business, and then the medium that they work in is more and more a reductive medium. So, what do you do?

The New York Times model is to say it's no longer in the newspaper business -- it's in the information business, it's platform agnostic, it will go wherever anyone needs news. That's a hypothesis of survival. Whether it works or not we have yet to see. We have yet to see an example of the New York Times becoming something other than what it is.

IWM: Do you see newspapers becoming a less relevant form of media?

Wolff: I see most newspapers probably going out of business. The newspapers that have continued to exist over the last generation have existed because they've been in a monopoly position in their particular communities. Clearly the Internet breaks up that monopoly. So I think that most newspapers will go out of business. Some of them may be able to re-conceive themselves as a newer kind of information provider.

IWM: Are magazines better off than newspapers? Or does their future look just as bleak?

Wolff: Magazines are better off than newspapers. But magazines, depending upon the category they are in, have lots of challenges.

Advertisers can reach consumers in an electronic fashion that's cheaper and more efficient than print. There are certain categories that remain incredibly robust for magazines -- fashion and luxury goods, for instance. But at some point in the future, do even the fashion and luxury goods people figure out how to use the electronic world? Probably, although I think that's still somewhat of a ways off.

IWM: Will Howard Stern's jump to Sirius satellite radio be an industry-making move as some have suggested?

Wolff: So far it seems to be a very smart idea.

I remember first writing about satellite radio about five years ago, when it was just coming into existence. I remember going to Sirius's offices, and they seemed quite James Bond-like at the time. Satellite radio seems to have arrived at that point where everybody is saying, yeah, that's obvious. Without question, satellite radio should exist.

IWM: Final question: What big change will we see in the media landscape within the next five years?

Wolff: Everything changes. There is no part of the media business that stays in place. All of the transformation that we've seen over the last 10 years is just preface to the incredible upheaval, displacement, fracturing, destabilization, disestablishment that we're going to see over the next five years.

Obviously technology is bringing this about, competition is bringing this about, choice is bringing this about. It's fundamental changes in consumer behavior, fundamental changes in the behavior of advertisers. And a general kind of transformation in what we expect of media, what we want of media, what all of the media constituencies think that media should be and should do.



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