Interview with Eli Noam, US economics professor
WW: What do you think of the recent changes at major U.S. media companies such as Time Warner, Disney, and Viacom?
WW: What do you think of the current changes at the major US media groups such as Time Warner, Disney and Viacom? Eli Noam: These media groups have become too big, bigger than the ability of many managers to manage them well, so they are falling apart again. It's not even so much about the personalities of these managers, but simply that they have become too diversified for it to make sense to bring them together under one roof. The era of mergers has reached its peak and the tide is turning in the opposite direction. To what extent does this also affect the families that run these conglomerates? News Corporation, for example, has not been able to resolve the succession issue.
It looks like the era of conglomerates controlled by a semi-dynasty is coming to an end in the US. This can be seen at NewsCorp, but above all at newspaper publishers. Continuing this policy at all costs when there are no suitable successors drastically reduces the value of such a company. Rupert Mudoch in particular has always left his personal mark on News Corporation. Just think, he started with a newspaper and now heads a global media empire. Abroad, the personal touch in such entrepreneurial families is even greater than in the USA, just think of Bertelsmann or Springer.
In the USA, media companies are falling apart, but in Germany, Axel Springer Verlag recently bought Germany's largest TV station ProSieben Sat 1 and is continuing to grow. Is the trend going in the opposite direction?
Springer is primarily a newspaper and magazine company; it has not quite reached the scale and complexity of a conglomerate like Viacom. The size of a media company has to be enormous to keep up with the other competitors in the USA, whereas in a smaller country like Germany, fewer properties are enough to be at the top.
(gs)
It looks like the era of conglomerates controlled by a semi-dynasty is coming to an end in the US. This can be seen at NewsCorp, but above all at newspaper publishers. Continuing this policy at all costs when there are no suitable successors drastically reduces the value of such a company. Rupert Mudoch in particular has always left his personal mark on News Corporation. Just think, he started with a newspaper and now heads a global media empire. Abroad, the personal touch in such entrepreneurial families is even greater than in the USA, just think of Bertelsmann or Springer.
In the USA, media companies are falling apart, but in Germany, Axel Springer Verlag recently bought Germany's largest TV station ProSieben Sat 1 and is continuing to grow. Is the trend going in the opposite direction?
Springer is primarily a newspaper and magazine company; it has not quite reached the scale and complexity of a conglomerate like Viacom. The size of a media company has to be enormous to keep up with the other competitors in the USA, whereas in a smaller country like Germany, fewer properties are enough to be at the top.
(gs)
