October 31, 2020 Breaking News, Latest News, and Videos

Money Matters Make Moody Moguls Mope:

Last week there were several events that caused me to think that the “face” of the current recession is only beginning to emerge. One of those was a story in the Mirror about empty storefronts on Montana Avenue. Another was the announcement by a repentant General Motors that it has already emerged from bankruptcy… and all it took was shedding Hummer, Pontiac, Saab, and Saturn then closing 13 plants and laying-off 27,000 workers. My sister sent me a copy of a letter she received concerning her own Saturn automobile. She was instructed to remain calm as another company took over Saturn; she would not suddenly be driving an obsolete car that she couldn’t get parts for.

Stuck with something you couldn’t fix was part of the anxiety shared by those gathered at the annual Allen & Co. conference held in tony Sun Valley. (In the face of misery from layoffs and closures, the place is “tony”… not “arrogant”) The Rocky Mountain get-away is a yearly gathering of media, technology, money, political and other tony persons of influence for several days of conferences and sitting around talking about the state of things in their businesses. Well, the talking was more like moping. From the LA Times: “With the world’s economy mired in recession, their advertising-dependent companies pummeled by consumers who have gone into hiding, and the Internet undermining the model that made many of them wealthy, the moguls who met under the glorious Idaho skies were a decidedly downbeat lot.”

I’m not a captain of industry, but I do understand that at any given time it’s the business of whatever business you’re in to tell the public things are great and getting better with your product or service. Take GM right now. After scorching the earth of their previous empire, shedding 4 brands, selling 61% of the company to the American people and leaving thousands unemployed, GM CEO Fritz Henderson meets the press and confidently says into a camera “Business as usual is over at General Motors.” Uh, yeah… dude.

Still, that’s what business does in these situations; you reach through the clouds for sunshine. There was a more contradictory set of messages coming out of the Sun Valley conference. On the one hand you had the darkness guys. Rupert Murdoch said flatly, “It’s going to take years and years, like five years at least before we see any real growth coming out of this.” I believe by “this” he meant the recession. He might have meant Bill O’Reilly’s cerebrum. Eric Schmidt of Google said that the current economic climate was “the new normal.” So, by implication, get over it.

On the other hand, the conference had cheerleaders in John Malone of cable’s Liberty Media and Disney CEO Bob Iger. Both men put forward that the public—you and me—will eventually pay for the Internet content we’re now getting for free. See, to them, this is great news. Iger was assertive. “People are going to pay for content. We are not worried about that.” Malone painted an even more hopeful scenario, sounding something like a big tobacco executive discussing teen smokers. Regarding currently free Internet content, Malone said, “People will get addicted and be willing to pay for it.”

Maybe it helps us to know a few years in advance that these talented and powerful men are already licking their lips in anticipation of killing the Internet, or at the least crushing the spirit of it. But it’s also helpful to know that while great minds often plunder alike, they also disagree on certain things.

You haven’t been able to get out of bed without hearing the word “Twitter” the last few weeks, yet many of the big swinging execs at Sun Valley were dubious about using that site as an example of a profit-generating model. Howard Stringer of SONY, a company that saw its profits fall 43 percent in fiscal 2008, said about Twitter that “a lot of people are doing very well at making very little money. It’s not a club I’m looking to join.” I’m sure envy has nothing to do with Stringer’s sourness. The LA Times also reported that in a (tony) closed-door session at Sun Valley, both Malone and media player Barry Diller said they didn’t see how Twitter could make money. I wasn’t clear on whether that meant either of them was in negotiations to buy it.

The economy needs forward momentum, and it’s distressing to hear that the very people who could instigate that momentum are looking to circumvent development, risk and simply press their boots onto the faces of American consumers. But if the assembled gods at Sun Valley are thinking of charging us for what we now get “free”, then let’s ask something of them. A short list might include making CNN and FOX News in some way worth watching, cleaning up the Internet so that spyware and pop-ups and all the sinister covert demons that choke your everyday computing disappeared, and making information and sites available without the interactivity demanding that you sacrifice your e-mail address. Look, ye gods… you’d be having a hard time right now regardless of the economy because across all media platforms you’ve given up on producing compelling and necessary content. After dinner, why not gather at the big fireplace and discuss the concept of “value.” Have someone from Sears or Target help you out with that conversation.

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