What a mistake.
Every time a new medium arrives, older media players think, "What an opportunity to extend our franchise." So magazines and newspapers and radio and TV outlets are jumping all over themselves to digitize their brands.
They should check Playboy's history. Over the years, Playboy has extended its brand into clubs, casinos, books, videos, cable channels, calendars, clothing, condoms, cigars and cola, among other things.
In 1971 Playboy went public for $23.50 a share.
Current price: $11.24 a share and it could go lower. In the past nine years, Playboy Enterprises had revenues of $2.9 billion, yet managed to lose $95 million.
In spite of these dismal results, many experts applaud the Playboy approach. Here's how a founding partner of a worldwide management consulting company, and the author of six books on strategic thinking, describes the Playboy approach: "A user/customer class-driven company is one that has deliberately anchored its entire business around a describable and specific category of end users or customers. The company then tries to satisfy a range of related needs that stem from that class of end user. ... Playboy, for instance, is a good example of a company pursuing a user-class-driven strategy. The phrase 'Entertainment for Men' on its magazine cover spells it out quite clearly."
Does this all make sense? Sure it does. But common sense is not marketing sense, which is something quite different.
Playboy fell into the line-extension trap, the most common fault in marketing. A guy who lives in his pajamas in a Holmby Hills mansion might not get the respect of media mavens, but the truth is, much of the media industry is making the same mistake as Playboy. It's the urge to digitize everything they do.
Everyone's in on the act
The British Broadcasting Corp. is preparing to spend $170 million over the next five years to puts its TV and radio shows on the net. Programs will be available for seven days after they are first broadcast. Since the internet shows will be free, the BBC is likely to rack up a big loss on the deal.
Line extension is rampant in the media. Take Talk magazine, or rather Talk Media, a company founded in 1998 by Tina Brown and financed by Miramax, a division of Disney. The former editor of Vanity Fair and The New Yorker, Ms. Brown announced that she would, according to The New York Times, "publish a new monthly magazine, publish books and produce films and television programming."
Twenty-nine months after its launch, Talk magazine folded, losing a reported $54 million, including the money spent on a launch party on Liberty Island for 1,400 of the world's most famous people.
Multimedia has been a buzz word for years. "Investors just can't get enough of multimedia," reported Business Week. "Wall Street has bid up the shares of almost all media companies, figuring they'll offer much of the information that will give multimedia zing. Most publishers, meanwhile, are rushing to set up on-line services."
When was this published? Last week? Last month? Last year?
No. Business Week reported on the multimedia movement in its December 6, 1993, issue. That's more than 13 years ago.
"Multi" is one of the most dangerous words in the dictionary. Multimedia, multiplatform, multifunction, multichannel, multidigital, multifaceted. Whenever you hear the word "multi," you can be pretty sure it's a sign of trouble.
Not learning from the past
Did Harvey Weinstein, founder of Miramax Films with his brother Bob, learn anything from the Talk disaster. I'm afraid not.
His new venture, Weinstein Co., is making the same mistake as Talk Media. "The Weinstein Co. is positioned more as a diversified boutique media company," says Time magazine, "encompassing home video, cable television, Broadway theater, book publishing, video games and, of course, the Internet."
"We've already done a movie company," said Harvey, "Today we're in the business of providing content and our own distribution pipelines."
Early returns are not good. "This fiscal year has been a disappointing one," according to a Weinstein board member quoted in Fortune last month.
The computer industry is also focused on the notion that "content is content." The only difference is how it's packaged and where it's viewed. Here's where Hewlett-Packard is headed, according to CEO Mark Hurd: "To integrate content across the home, whether it's emanating from the web, from satellites, from cable, or the PC, and bring that to the consumer's touch."
Howard Stringer, CEO of Sony, recently said something similar: "Synergy is back with a vengeance and I don't have to defend myself anymore, because the ability to access content any time, anywhere, on any kind of device is now accepted."
There's an assumption that the sender provides the content and the receiver decides the medium in which he or she wants to read, listen or view the content. Would that life be so simple.
There are enormous differences between the five mass-communications media that have been introduced over the course of human history. The five are:
- The book
- The periodical, including newspapers and magazines
- The internet
Each medium is unique with its own characteristics and its own reason for being. That's why no new medium has ever replaced an existing medium. ("The medium is the message," wrote Marshall McLuhan, and there's a truth buried in this assertion.) Each new medium is layered on top of older media, forever changing and modifying them.
Why in the world would anyone think that TV is dead and that everybody is going to watch video on their computers or (even worse) on their cellphones?
Yet that's what Bill Gates predicted at the D: All Things Digital conference last year. (Television is currently alive and well. More people watched more television on their TV sets last year than any other year in history.)
The periodical didn't replace the book. Radio didn't replace newspapers or magazines. TV didn't replace radio. And the internet won't replace any of the four traditional media.
In addition, very few brands have made a successful transition from an older medium to a newer one. Remember "USA Today on TV"?
Putting a magazine on radio or TV never worked either. Literally dozens of publications tried to take their successful print formula into the radio and TV arena. They all failed.
Why? The essence of radio is the human voice and the essence of TV is motion. A printed piece just sits there, says nothing and doesn't move.
A new medium needs a new concept and a new brand. The most successful internet brands have not been WSJ.com, Forbes.com, CNN.com or any other line extension from a traditional medium.
The most successful internet brands have been new brands such as Google, Yahoo!, Amazon, eBay, You Tube, MySpace, Facebook, Priceline, Craigslist, Wikipedia, AOL.
Stay where you are
Every print publication thinks it needs to expand into the internet to be successful. It's exactly the opposite. Stay where you are and launch a new brand on the web.
There are, of course, some small multimedia successes. Perhaps the most notable of the multiplatform operators is The Wall Street Journal with some 931,000 subscribers to its online service.
But I question whether the Journal is a "financial" multimedia success. Despite that the Journal is the most powerful, most respected publication in the country, it reportedly lost money last year.
It was back in 1996 that the Journal launched its Interactive Edition, which later became WSJOnline. That was two years before Google was founded by two Stanford students.
Today, Google is worth $169 billion on the stock market, while Dow Jones is considering a $5 billion offer from Rupert Murdoch's News Corp.
Instead of launching an online edition of the Journal, what if Dow Jones had said to themselves, "What can we do on the internet that takes advantage of the unique properties of the medium itself?"
And one of the unique properties of the internet is not the ability to take a printed piece and put it on a video screen. Nobody wants to read a lot of words on a cathode-ray tube. The internet magazine or newspaper is as likely to become a long-term success as the electronic book.
Yet the multimedia craze will probably be with us for a long time. A buzzword is a pit bull. Once a buzzword grips the imagination of an industry, it seldom lets go.
Everybody's doing it ...
You might think Lifetime is just a cable TV network. Wrong. "Lifetime has the opportunity, if we play it right," says CEO Betty Cohen, "to be the leading integrated electronic media company for women. That's what we should be. Not just a cable network."
You might think Conde Nast just publishes magazines. Wrong. "Conde Nast does not like being called a mere magazine company, although it publishes 27," reports The New York Times, Aug. 8, 2006. "We're content providers," said Richard D. Beckman, president of the Conde Nast media group.
You might think USA Today is just a newspaper. Wrong. Advertising Age, Sept. 9, 2002, called the newspaper a "multiplatform media brand." According to the daily's publisher-president, Tom Curley, "We are no longer a newspaper; we are a network. We feed content to television. We feed content to the Internet from the same core platform."
You might think ESPN is a TV company. Wrong. "We are not a television company," says ESPN executive John Skipper. "We're gonna surround consumers with media."
You might think a conference sponsored by the Television Bureau of Advertising would focus solely on TV. Wrong. For the first time, the conference was developed to a single topic: the importance of the "multiplatform." That is, offering content and advertising not only on local broadcast stations but also online, on cellphones and other wireless devices, through video on demand and on video iPods.
You might think Time Inc. is just a magazine publisher. Wrong. "I've got a thousand brilliant print salespeople who are going to be transformed into a thousand brilliant multimedia salespeople," said Ann Moore, chairman-CEO, Time Inc. "We are a content company, OK? We create and we edit, and we aggregate the best content out there. We can deliver to you, our reader, in whatever format you want it in the future -- maybe not on paper."
Some 25 years ago, one of the biggest believers in multimedia was ... me. Our advertising agency was hired by Norelco to prepare advertising for its new multimedia projector and we got very excited. "The one machine that mixes slides, movies and sound" was the headline of our first ad.
Needless to say, the multimedia projector went nowhere.
~ ~ ~
Al Ries is the author or co-author of 11 books on marketing, including his latest, The Origin of Brands. He and his daughter Laura run the Atlanta-based marketing strategy firm Ries & Ries. Their website is Ries.com.