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THE MORNING BUZZ: Get Ready for the Media Mafia

24 Sep, 2002 By: Holly J. Wagner

Most of the big media mergers haven't lived up to the sales pitch, which was "synergy across the enterprise." That was supposed to deliver multidimensional exposure to advertisers, who could one-stop shop for all their media buys.

I instinctively distrust catch-all babble like "synergy". It's one of those words that means anything the salesperson wants it to mean. Which, I think, is why the mergers have been dismal failures. Disney and AOL Time Warner stocks are down and Vivendi Universal is going supernova, not just because of 9/11 or the tech crash or the advertising slump. The companies just haven't been able to synergize. The way the Wall Street Journal tells it, that means the various units can't play nice together, especially in a tight advertising market. It's arguable that the plans were too ambitious to start with.

The decline led AOL Time Warner to clean house in recent months, unseating the AOL Internet oligarchy and replacing the bigwigs with executives from the media side. I don't really know how that's working out for the advertising side, but I find the effect on the news publishing organizations quite disturbing.

Of course, there are no better marketers than those at media companies. Their living is getting people to suspend their disbelief in entertainment content, so it's not much of a stretch to get them to do it with the truth as well. The New & Improved AOL Time Warner is an example. While there's no movement in the market, the entertainment tentacles have started to poke through the news delivery like never before. I think it could lead the news arms to a crisis of trust.

A couple of weeks ago the conglomerate's Sports Illustrated published a story on how women's tennis is as much a fashion show as a sport. The article focused on a blonde player named Simona who seeemed more fluff than player. Readers had to get to the very last sentence of the article to learn that "Simona" wasn't real; the photos were computer generated.

And they looked suspiciously like Simone, the virtual media darling in New Line Cinema's eponymous film about a guy (Al Pacino) who computer generates a woman and makes her a media star without her ever doing the impossible personal appearance.

Now, it's one thing to use one of your properties to advertise and market another. Even product placement in shows is a sort of benign force. But I think it's quite another to start weaving those free entertainment plugs into supposedly factual news items. The only company getting any advertising synergy out of this as far as I can tell is AOL Time Warner.

But I wouldn't be ranting to you folks if this was just a one-time event. I'm starting to see it as a trend. Because just this week -- not coincidentally right after The Sopranos opened the season with mob wife Carmela fretting about estate planning with mattress money (in case capo Tony gets whacked or sent to the slammer) -- AOL Time Warner's CNN Web site and its financial news channel on satellite and cable had a "news" story using Carmela as an example. It was an advice piece about what someone in financial circumstances that are similarly unpredictable might do to maximize financial resources in this crummy market.

The channel also made big hay yesterday of a news story; apparently the HBO series is a victim of its own success. According to that story, HBO is taking legal action against primarily Italian restaurants, most of them in New York, that host Soprano nights. They pipe in the show and no doubt serve tons of pasta. HBO says that's an unfair use of its programming and they should fuhgeddaboudit.

They don't say the company's marketing executives have so generously created a line of Sopranos pasta and sauces, which they told wire services is just because they thought it would be fun for fans. They said they'll never make any money off the stuff, it's just a gimmick.

But now with this going on, I smell another trade interference angle for the lawsuit: marinara piracy. Those pesky restaurants are out there doing peer-to-peer pasta trading and now we'll never get people to buy the sauce and stay home to watch.

Never mind that the show's audience is wider than ever and a few freeloaded episodes this season probably generates major sales for HBO subscriptions and past season Sopranos boxed sets.

It's interesting to note that the early Sicilian Mafiosi became powerful by controlling the olive oil and semolina trade to the U.S. (it's true, you can look it up); while AOL became the dominant ISP by giving away free hours by the hundreds of thousands. (Betcha can get 1,000 or more free hours right now on a shareware disc at your neighborhood electronics store.) Maybe the people running HBO should review what one might call an interesting choice of business models.

I guess pasta and synergy have a couple of things in common: they're both cheesy and maybe too much of either isn't such a good thing.

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