Why You Should, Talk, Read and Blog

This fall is my first semester teaching college.  I’m an adjunct at New York University where I’m teaching The Business of Media.   The class design focuses on training young people to join media companies.  The grade is comprised of three components class participation, blogging, and a final paper or presentation to a group of media professionals.

These skills, reading, writing, and presenting are vital to your ability to succeed in the workplace.  And everybody from programmers to accountants needs them — even the ability to speak in front of large groups.  Don’t believe me?  Guess who presented Google Wave at their launch?  The product managers who built it.  The smartest thing my son’s kindergarten teacher did was hold a weekly recital where kids stood up in front of all the parents and performed some skill (count to 10, sing the alphabet, play chopsticks) to huge applause.  5 years later all of those kids relish public speaking.

The media world has been changing since I joined it in the early 90s.  The pace of innovation has never slowed.  In fact, it has probably accelerated.  There has been “upheaval, revolution, rebirth, and reinvention” since long before the 20 years that I’ve been in the industry.

And if you don’t read consistently, widely and thoughtfully you will not be able to contribute as much to your organization.  As children’s advertising taught me years ago, Reading is Fundamenal.

Blogging forces you to write about what you read.  Through this process you articulate your ideas into structured thoughts.  These thoughts may or may not contribute to the organization, but I genuinely believe that the process of steady reading and writing is a discipline that will serve you, your colleagues, and your career for years to come.


Is Obama Already Betraying Us?

I’ve been quiet, but I’m not happy.  My finance guru Roger Ehrenberg posted this yesterday and it forced me into action.

Anybody could spend all day, every day trying to decode the stimulus plan making its way through congress.  It’s widely accepted that the country is in dire straights and could be facing double digit unemployment in the next 6-12 months.  We know urgency is critical.

But I voted for change.  I voted for the rhetoric that President Obama used in every debate: Kill poor performing government programs and use a scalpel to cut the cancer out of the federal budget.   I voted for an intellectual heavyweight who could decode the ways of Washington and use the power of the bully pulpit to get Americans to accept the dire consequences of our predicament.

This Stiumlus plan calls for large sums of money to be invested with state unemployment agencies (their coffers are dry) and extending cobra benefits.  It calls for money to flow to state education funds so that education programs that might be cut can continue.  There are various infrastructure investments around the country as the bill gets marked up to help various Congressmen and Senators.  This isn’t stimulus.  It’s an  emergency spending bill to prop up an economy teetering on the abyss.  Congress is taking out a trillion dollar credit card to buy more stuff and China is Visa.  Only this time Visa is not entirely sure they want to give us all of this credit.

What is it about this plan that radiates change?  One week into the administration, they are presenting legislation that does not call for shared sacrifice.  We’re cutting taxes and not raising them.  Shouldn’t we raise taxes on people with jobs and use the proceeds to retrain people who need jobs.

This is the Washington I grew up in — insular, myopic as inside-the-beltway as it comes.  I want to  believe in Obama’s Team of Rivals, but what if these Clintonite members of the establishment can’t bring fresh ideas and rely on the horse-trading power hungry culture that drove me out of my hometown forever.

If we are going to spend $1 trillion on stimulus and another $1 trillion on saving the financial industry then we must have new innovative strategic vision in four key areas:

1.  Education

2.  Energy

3.  Healthcare

4.  Financial Industry Regulation

These were the campaign promises.  I did not vote for the Democratic Party (I’m a lifelong registered democrat), rather I supported Barack Obama the progressive intellectual.  Supporting programs simply to keep us afloat until next year with no real overarching retooling of our governmental strategy is, and I hate to say it, better than Bush, but worse than Clinton.

I’m patient, but the sums we are investing are staggering.  We’re two weeks a way from the stimulus bill.  $350 bn in TARP 1 that has accomplished nothing is so outrageous it defies imagination.

I  always thought that the country’s dire economic condition could create the rare  political environment to push through uncommonly innovative investments in energy and education reform.  I pray (and I don’t typically  do so) that the devil is in the details of the stimulus plan and that the NYT and Politico have not uncovered the progressive agenda.

At the moment, Congresshas a bill that reminds me of  LBJ’s great society with a little Reagan tax policy thrown in for good measure.   That’s not FDR’s new deal.  That’s just the Washington that makes me want to live somewhere else.

Why we Need Newspapers

I read some really dumb stuff in the newspapers today.  More than anything I’m bothered by the Wall Street Journal’s slouch towards the New York Post.  The WSJ’s big headline today is that Jesse Jackson might be a part of the Illinois political scandal.  It’s the entire above the fold article space.  Come on, how exactly how does this affect the corporate sector?  It doesn’t.  But Murdoch wanted a prize brand to influence American politics.  The downside is that we are losing one of the great private sector institutions in America and the newspaper that discovered the Enron crisis.  We need the vigilant WSJ. Meanwhile, they are taking their dwinding journalism resources and covering Illinois to combat the NYT liberal bias.  Yeah, that’s a good differentiation strategy Rupert.

So unfortunately, we turn to the paper that really typically covers poltical scandals for a superb distillation of the country’s economic crisis.  Check out Steve Pearlstein’s colunm in the Washington Post.  You may have to register.  It’s worth it.  He makes a great case for why Sam Zell, Robert Rubin, and other business leaders are hiding behind Perfect Storm excuses.  Without the Post and other papers, we will have fewer and fewer paid journalists who have time to write such thoughtful columns.  I tried to get at similar arguments in some of my blog posts, but most bloggers do not have the time to be as thoughtful.  While there are an increasing number of professional bloggers, newspapers play a vital role in our society and that’s why they have to figure out how to survive.

Thanks Steve Pearlstein and thanks to my mother, Carla Cohen, for turning me onto the piece.  I read a lot of newspapers, but typically I’m only on the Post site for Redskins news.

Pray for Newspapers

The WSJ reports that Tribune has retained Lazard to help restructure its debt and that Tribune may seek Chapter 11 Protection.  A month ago I met Bruce Toll (Toll Brothers) at a cocktail party.  Toll is the Chairman of Philadelphia Media Holdings and had helped lead the deal to buy the Philadelphia newspapers from McClatchy.  He was very pessimistic about McClatchy’s ability to avoid bankruptcy proceedings and disclosed that Philadelphia Media itself was really in no position to continue meeting its debt obligations.

Meanwhile Henry Blodget continues to track the travails of the NYT and I encourage you to make sure you read his posts today and in the future

Whither These Friends

Whither These Friends

While the automobile industry commands most media attention these days, the rapid demise and potential reinvention of the newspaper business will likely be a huge story in 2009.  Major cities in America may find that the newspaper of record no longer exists or emerges from a restructuring with a far leaner news gathering organization.  At best, diversified newspaper companies such as the NYT, Hearst, Cox, Gannett, Tribune and others will have to sell off valauble assets to restructure the balance sheets.  Goodbye television stations and baseball teams.

The good news is that the Chapter 11 process or other debt restructurings could pave the way for new ownership and reduced debt service.   Plenty of debtholders will settle for 30 cents on the dollar to get something in what they perceive to be a  dying newspaper industry.  So new equity participants could get in inexpensively with significantly less debt on the balance sheet.

Here’s what’s interesting about this dynamic.  In some communities — Philadelphia, Minneapolis, and New Orleans to name a few — newspapers play a central role in people’s lives that takes years to establish.  Even young people in these communities appreciate the newspaper brands of these towns and that awareness could be utilized to grow a local business that is central to people’s lives.  These companies also have one of the few sales organizations capable of selling at the local level.  Citysearch wants that capability.  Yahoo has partnered with newspapers around the country because they couldn’t grow that same competency.  Local advertising remains remarkably untapped and newspaper companies still may be able to retain and nurture that business.

Interestingly, this bad economy might be the saving grace for the newspaper industry.  Debt holders want something and the need for restructuring may bring more innovation to the beleaguered category.   Recent history has been brutal.   Tribune has struggled in LA and Chicago.  The Philadelphia Inquirer,like so many others big dailies,  has been unable to stanch the bleeding subscriber base, and many of the big newspaper companies carry debt levels that required healthy classified and national advertising franchises to service.

The few times I’ve visited Detroit it’s felt  like dead city walking.  Old buildings, bored employees, little diversity, marginal passion. I’m sure I have not seen all that Detroit has to offer, but the car industry feels tired.  When I visit newspapers they may have much of the same physical architecture, but they crackle with energy.  They have experimented, they still want to win.  The car industry may not be able to find its way back in this brutally global marketplace.   But the newspaper industry can find their way.  Pray they do.  Bloggers need newspapers to help set the agenda so they can frame it.  People need newspapers to ensure that institutions private or public do not run completely amok.

Think the financial crisis is bad?  Imagine what it would be like if nobody was reporting on it.

Wine Spectator’s Killer App

14 years ago when I was first dating Nina (my wife) she introduced me to wine.  So began three love affairs with Nina, wine, and a new career working in the “new media” industry.

Cut to 2008 when Wine Spectator takes (I’m guessing) $100k of their precious marketing budget to announce something truly interesting and long overdue.  On the backpage of the A section of Today’s NY TImes you will see their big color ad announcing a mobile application for Blackberries and Iphones that contains the entire Wine Specator databse of ratings and tasting notes.   It’s free if you become a digital subscriber to WineSpecator.  That will cost you $75 bucks or $50 if you are already subscriber.

Of course there is some irony in using the print version of the NYT to acquire customers.  No accountability, no measurement, no ability to know if the $100k is working.  I care so much about the NYT’s ability to survive that I’m starting to have anxiety attacks that it won’t be at my door each morning.  Despite my anxiety, even I think Wine Spectator should find a more measurable way to sell subscriptions.  The NYT would argue that this blog post is proof positive that they run a marketing platform that engenders buzz and conversations, but I bet I’m practically the only person that will blog about this ad today.  In any event, this is less about the Times than it is about America’s preeminent wine mag.

Wine Spectator’s ratings play a vital role in the wine world.  This is a company that tastes thousands of wines each year and rates them for us so that we don’t have to.  This is very useful data for the whole wine eco-system of vintners, distributors, retailers, restaurantuers and consumers.  We need the data and tasting notes as part of wine purchasing process.  Most people sit down at restaurants with very little knowledge of wine or the wine list.  Even serious wine drinkers would struggle at many restaurants because it’s so hard to really know the entire landscape of wine drinking.  The industry’s geographies and vineyards have exploded.  Even since I started drinking wine 15 years ago, countries such as Argentina, Chile, South Africa, Greece, and states like Washington and Oregon have risen to huge prominence.  How can anybody keep up?

So now you can sit down at restaurant whip out your Iphone (if it works)  or blackberry and find out from the hallowed Wine Spectator about a wine’s price, rating and other details right from your table — if you spend the $75 bucks.   I want this to work, but I’m probably not spending the cash.  It’s just not worth it.  I can ask the sommelier for free.   If I do buy it, it will be to “support WS” the way I support NPR.

I worry as I do most times that I pick up a magazine that a print publicaton has  the wrong approach at the wrong time for most magazines in the world.  HuffingtonPost and Politico (two crossover demographics) have US 9mm unique users and 4 mm respectively.  Politico has been around for maybe a year or two, HuffPost for 3 or 4.  Wine Spectator has 52k.  Sure it’s an election year.  But last night alone at least 52k people tried to figure out what wine to drink at restaurant.  It’s probably more like 520k. You think Wine Spectator it is hurting their SEO opportunities having all that data sit behind a pay wall.

I applaud WS for finally bringing this to market about 8 years after we needed it.  I hope they succeed because I want WS to make it and I want consumers to pay for more content.  Still, I sense another once vibrant publication like WS will continue to buy expensive ads in another decaying institution like the NYT because they refuse to change faster than they must.  Good people have thought through the Wine Spectator strategy. Let’s hope they made the right decision.

NYT Sticks a Fork in GM

The New York Times has published the definitive piece on the General Motors situation this morning.  In it, Andrew Ross Sorkin has laid out the case for a Chapter 11 bankruptcy proceeding and, in my opinion, laid the foundation for the bridge President-elect Obama referenced in his 60 Minutes interview.   No constituency including shareholders, management, and the UAW is spared in this piece.  In fact, Sorkin argues that the only way to save GM and Chrysler is for all of these constituencies to feel immense pain.  His recommendations:

1.  Management must go.  He’s right.  The fact that GM CEO Rick Wagoner admits to not preparing for Chapter 11 in a different article in today’s NYT demonstrates the magnitude of his incompetence.

2.  It’s over for the UAW long-term benefits and pension package.  This union has definitely contributed to the downfall of the American auto industry.  The leadership has done a great disservice to its membership by spending every ounce of energy hanging on and very little of it figuring out what the bridge for these workers should be.

3.  Shareholders including Chrysler’s Cereberus need to be wiped out and the government needs to be first in line with is money in a debtor-in-possession financing.  Look, shareholders are free to buy and sell their ownership in a company based on their perspective on management’s ability to grow the company. These shareholders bet incorrectly.  The government needs to set precedent here.  If we bail companies out, it  so to stabilize the economy, not to give shareholders or debtholders a “get out of jail” ticket.

I had floated Chapter 11 as the appropriate way for GM to emerge from this process last week.  But Sorkin spent his whole week thinking through his immensely important column.  That column will be read by the most influential people in the decision-making process and I really believe that the NYT has played a constructive role in articulating and synthesizing the case for the restructuring in a way that everybody can share.

It’s heartbreaking to read stories like the recent ones in Silicon Alley Insider.  The NYT is in financial trouble.  Sure, they can probably navigate the short-term issues by selling off assets, but long-term their business is deeply threatened and sooner or later they will have to make broad newsroom cuts.  This is bad for New York and the rest of the country.   The burden is on entrepreneurs to help figure out how we can charge for certain services on the internet.

Maybe the  NYT should cut a deal with Tipjoy.  I would tip the great newspaper and one of the top five brands in my life $100 today.

We need less ideology, more flexibility

Earlier this week, I wrote that I questioned the GM bailout.  For me, it was ideological.  Does anybody really believe they can ever compete again effectively? But perhaps, ideology needs to be softened and pragmatism needs to take center stage.

I had lunch yesterday with a close friend and former Goldman Sachs executive who is quite centrist in his views.  He wants to bailout Detroit because at some point the unemployment rate becomes an issue of domestic security.  He argued,  “There are many more guns and angry people in the country today and if tens of millions of peple can’t find work,  there will be violence in the streets.”  Fun lunch.

The NYT editorial page gives us a couple of other viewpoints this morning.  The editors argue that any bailout should come with energy efficiency promises.  Right now Detroit is on the hook for 35 MPH average by 2020.  Perhaps, the NYT suggests, we could do better.

Bob Herbert pleads for us to protect the millions of people who need to pay their mortgages and feed their families.  He claims that the automobile industry creates 1 in 10 jobs in this company.

All in all I came away thinking that these are times that require flexible thinking about a person’s idelogical views.  I really do not like throwing good money after bad and I do not believe the Big 3 as constituted or as integrated can turn things around.   That said, perhaps I can believe that my taxpayer money should be deployed to keep certain industries afloat while  the United States overhauls  the economy.  In this sense, my taxpayer dollars go to smoothing the sunset of the automobile industry and preventing the country from spiraling further into chaos.

This is what’s happening with AIG.  AIG insured all the banks that were playing in the unregulated CD markets.  Along the way they made a amazing commissions on those premiums If they collapse then banks all over the world will collapse too.  So right now AIG is transferring their bailout money to these banks and that’s keeping the industry afloat.  It’s sickening that AIG can survive this staggering level of mismanagement (makes Enron look like a lemonade stand) but they are literally too intertwined too fail.  I’m starting to believe this would be a good use of taxpayer money, if the bailout crew were extracting concessions and reforms like Roger Ehrenberg has written about extensively.

I think all of our long-held ideological views need to be questioned.  This is a time for flexibility in our thinking.