In Q2 2023, PARQOR will be focusing on three trends. This essay covers:
A reminder that this newsletter is now The Medium from PARQOR. It's the same newsletter focused on three to four key trends per quarter, but it is now oriented a bit more narrowly.
And, as you may have figured out, the new branding is a nod to Marshall McLuhan's "The medium is the message" and my focus on the moving pieces of media's evolution from wholesale to retail models.
PARQOR will remain the corporate brand, and I will be building out membership services under that brand.
I could argue the most notable detail to surface in the recent debacle at CNN — which led to the sudden departure of CEO Chris Licht — is the staff’s resistance to change. As New York Magazine writer Shawn McCreesh recently asked in “Was Everybody Always Out to Get Chris Licht?”:
“These are powerful incentives that Licht (and [Warner Bros. Discovery CEO David] Zaslav) messed with; why would any of the talent now, after everything, want to engage with Trump in a way that won’t please their cheering sections or their bank accounts?”
The day before that piece, there was a Wall Street Journal article entitled “Top CNN Anchors Criticize CEO Chris Licht’s Leadership”. It highlighted “concern” from staffers and talent about “the high level of involvement by Zaslav, who has been much more hands-on than previous owners of CNN.” The article closed out with a counter from a “person close to Zaslav” who “pushed back on the idea that Zaslav’s level of engagement was inappropriate, noting that unlike previous owners who ran the media conglomerate like a holding company, Zaslav is heavily involved in all operations.”
The story, at its simplest, is of a new CEO (and his billionaire mentor and backer, board member and shareholder John Malone) who believes that the CNN editorial approach should “ air a wider range of political viewpoints, including from conservatives.” But lurking in the background is a deeper question of incentives: effectively the CNN staff are communicating to Zaslav through both backchannels and their resistance to change that he has not incentivized them to change the direction of the business.
This could reflect objective insubordination by rank-and-file CNN employees. The media stories offer plenty of evidence of that, but there is also evidence of Warner Bros. Discovery nipping insubordination in the bud (so long, Don Lemon). It could also be a failure of Zaslav to incentivize employees. There was behavior that seemed like insubordination but it is rational because there is no better business model in media than “free money”, and Warner Bros. Discovery management failed to incentivize them to believe otherwise.
Both scenarios raise the same question: why should anyone acquire a legacy media company in the twilight of the “free money” era?
The lesson from CEO David Zaslav’s failed experiment with CNN is it may be too costly to acquire and then reorient an entire organization in a new direction. But CEO Robert Iger incentivized managers to pivot Disney to streaming in 2017, and now he faces the question of whether his streaming-centric strategic vision was right.
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I wrote about a version of this problem last September in “Can Disney TikTok-ify or Amazon Prime-ify Itself?”
A campaign by activist investor Dan Loeb was concerned that "Disney directors don’t have enough experience in digital advertising, the ...