YEARENDER: We’ll probably remember 2011 as a lost year for Big Media. Tech companies continued their drive to harness the Web in ways that could topple existing infotainment businesses. But most traditional media execs just smiled and said that their industry has nothing to fear but fear itself. You’ll go blind looking for major new initiatives, with one exception: Dish Network’s Charlie Ergen bought airwave spectrum and took Blockbuster out of bankruptcy as part of a plan to create a national video streaming service. Other companies didn’t even try to cut transformative deals although Comcast had its hands full trying to fix NBCUniversal, which the cable giant formally took over in January.
News Corp exemplified the sense of rudderlessness with its handling of the year’s most engrossing media story: the News Of The World phone hacking scandal. After years of confidently and indignantly denying that lawbreaking had become pervasive at the UK tabloid, Rupert Murdoch’s company was humiliated in July. The Guardian disclosed that in 2001 the paper hacked the phone of a missing school girl, Milly Dowler, and deleted voice messages – giving her parents and police false hope that she was still alive. Murdoch apologized, and accepted resignations from several close execs including News International’s Rebekah Brooks and Dow Jones’ Les Hinton. But Murdoch wouldn’t take responsibility for creating the anything-goes corporate culture that tolerated phone hacking. He couldn’t be expected to know everything that goes on at his global conglomerate, he told Parliament. His son, Deputy COO James Murdoch – who oversees the UK properties – looked even more foolish and incompetent as the year wore on. He says he wasn’t criminally culpable for covering up crimes. To make that credible, he portrayed himself as a hands-off manager who naively accepted information that confirmed what he wanted to hear, and couldn’t be bothered to even read at least one urgent message that tried to tell him otherwise. The tawdry story disgusted the public and News Corp shareholders, likely destroying Rupert’s plan to eventually turn News Corp over to James.
That fed into another growing concern in 2011: Who will run Big Media in a few years? In addition to the question about News Corp’s succession plans, Disney announced that Bob Iger will step down in 2015 with a replacement yet to be named. We also still don’t know who will eventually call the shots at Viacom and CBS as the actuarial tables catch up with Sumner Redstone, who controls both companies. The four jobs shouldn’t be hard to fill. The current occupants collectively received $194.6M in compensation in 2010, a 58% raise from the previous year.