"Clear Channel to Dismantle Media Empire." That's the headline from pg. B1 of today's Wall Street Journal. In the article, Sarah McBride reports that the media giant plans to spinoff its entertainment division "in the latest example of a media company deconstructing an empire built during the late 1990s."
As I've noted in previous posts, media deconsolidation is all the rage these days. The list of high-profile media divestitures and divorces continues to grow: AOL-Time Warner, Disney-Miramax, Cablevision, Viacom, Liberty Media, Sony, and on and on. They all have been pondering or carrying out major spin-offs or restructuring plans in recent months. As McBride reports in the Journal today, "Clear Channel is following a media-industry trend of deconsolidation that has picked up steam recently."
McBride notes that many of these media operators are now realizing that the "synergies" they hoped would develop by combining diverse media operations didn't always develop. Moreover, intense competition from new media outlets and technologies has shaken the foundations of tradition media. That's especially the case for traditional radio, which faces multiple threats, including: satellite radio, I-Pods & MP3 players, and Internet music.
The bottom line is, despite all the hand-wringing we've seen over media consolidation in recent years, critics fail to realize that this industry has continued to rapidly evolve regardless of the ebbs and flows of media ownership patterns. A few years ago, mergers and acquisitions were all the rage. Today, a "back-to-basics" strategy is back in vogue that is seeing operators shed assets to figure out how to make customers happy an survive the sweeping technological changes that are reshaping the media landscape. In other words, markets work!
In my new book, Media Myths: Making Sense of the Debate over Media Ownership, I discuss all this in much greater detail and try to inject a little sanity and common sense back into this debate. For far too long, media critics have gotten away with making broad, unfounded generalizations about America's media marketplace. Facts, not fear-mongering, must govern the debate over media policy in the future.