November 18, 2006

Traditional media execs jumping to lead online media firms

This past week has seen surprising leadership changes at AOL (more on that later) and Fox Interactive Media. Discovery completed its CEO search. New heads for online arms of Viacom & CBS were also named recently.

While it's understandable for traditional media execs to move to online media, the undoubted future growth driver for the entire sector, it remains to be seen how well these folks will fare at their new jobs. Online and wireless are fundamentally different distribution platforms. If I have to pick one single criterion for success, it will be how quickly these guys adopt new technologies and keep pace with fast-evolving user behavior as they maneuver these giant ships in unchartered waters that includes new competition.

Traditionally, big media firms, thru their compelling content, filled the role of aggregating audiences for advertisers. This value chain has been broken on digital platforms, and nimble technology firms like Google have entered the fold. Secondly, the emergence of social media, that has democratized content creation and consumption process, is threatening the sustainability of big media's competitive advantage they have historically enjoyed on marketing and distribution. This poses enormous challenge for traditional media firms and execs coming out of them on how to creatively plan and garner their fare share of the value being created in this new paradigm.

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