Thursday, July 14, 2011

Glenn Beck's & Oprah Winfrey's New Media Strategies- Which Will Work?

Back on July 1st, the day after Fox News lost Glenn Beck's program, I wrote this post on my political blog discussing Beck's next act.

This week, I read that Ophrah Winfrey's nascent cable network is having teething problems, prompting the networks namesake co-owner to step up as its new CEO.

As I wrote in that linked post, I think Beck has gone Winfrey one better. He's simply moved to the web with his entire non-radio empire.

Perhaps the most notable phenomenon is that both media moguls have departed their former homes- one broadcast network, the other a major cable network- to own their own operations. Or, in Winfrey's case, co-own with Discovery Network.

According to yesterday's Wall Street Journal, Winfrey's new network, OWN, is "struggling" amidst the departure of several senior execs and the firing of the CEO. So she's taking over and moving members of her production company's staff into those senior business management slots.

I'm not clear on why Winfrey partnered with Discovery, rather than going it alone. Perhaps it had to do with the cost and ability to access a slot on cable distributor systems like Comcast and Cablevision. Or perhaps it was to piggy back on Discovery's existing production and management assets.

Either way, Winfrey is still mired in the world of quasi-regulated communications, cable system distributors and advertising. Not to mention the need to pay carriage fees to distribute her network.

Just because Winfrey found a sweet spot with her own long-running talk show and amassed a fortune from the spinoffs and such doesn't mean she really belongs among the Allen & Co. conference attendees. It seems to remain to be seen if her one-hit talent will translate into the acumen to run an entire network and demonstrate what amounts to master-programming skills.

In contrast, Glenn Beck leapt from cable giant Fox News to his own website-based streaming video channel. Like the actors who broke away to found 7Artists studio, simply took advantage of modern technology such as the internet, smart phones and tablets, offering access to his video site for about $5/month or $100/year, with free upgrade to a 'plus' membership through the fall.

I have no idea what the approximate revenue numbers may be for Beck, because I am not familiar with what his actual average daily viewership on Fox was. I know he consistently won his 5-6PM time slot against news programs. It's reasonable to expect that he's looking at several million dollars/month of direct membership fees he can pocket, while drastically simplifying and cutting his total operations costs.

Meanwhile, Beck took the opportunity of his departure from Fox to air a long infomercial on GBTV, showcasing his senior executive team, new on-air personalities and various associated business initiatives.

I gathered from a chance remark on one of Beck's programs that he spends "about a million dollars a year on security." That would suggest he's making tens of millions of dollars per year from his radio program, paid website access, books, and associated businesses.

If so, I think he'll have no problem funding his new website-based media empire on his own. The credentials of his new staff were impressive, e.g., the woman who 'put The Huffington Post on the map,' a senior executive from CNN, and other accomplished managers. And he's clearly had them on staff and working for many months.

It seems to me that, regardless of how you feel about his views and content, Beck took the more sensible route to his own media empire, than Winfrey. With a direct streaming website to any medium of the subscriber's choice, there's no potential for boycotts from advertisers or cable systems. No FCC concerns. I'm not even sure that Beck is counting on advertising for much of his revenues.

As I mentioned in my linked post, the various initiatives which Beck unveiled in his infomercial suggest an anti-Soros type of hydra-headed businesses which include John Doe-like clubs, charitable onshore production efforts, like Paul Newman's enterprise, and more political-action-oriented projects directly addressing liberal-leaning US college campuses.

In short, Beck is putting his fortune where his mouth is, hiring top talent to get him there, and choosing a venue which is at the leading edge of technology, with the fewest regulatory constraints possible.

Beck's move finally proves my point concerning the relative disutility and ability to be easily disintermediated of cable media distribution. And, of course, broadcast networks. Rather like what I wrote about in yesterday's post.

Beck made sure his new venture is easily found, cheap to join, and ubiquitous. By emphasizing smart phones and tablets, plus political action projects, he's opened up his venture to younger audiences, as well as older ones.

Whether Winfrey or Beck proves to be more financially successful might be less important for the old media world, in the long run, than that both former conventional media stars bolted their former homes to control their future media destinies with so much apparent ease. How they fare may vary, of course, as Winfrey's management headaches attest. But their example may begin to sink in with more conventional entertainment creators who, until now, have sold their television series to broadcast and cable networks.

How long will it be before Glee, MadMen and Psyche simply go to websites and enjoy 100% of subscriber fees, selling by the episode, season or more, via credit cards and PayPal?

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