[Opinion] Old Media

˝We need your help dearly.˝ High-ranking managers of America Online (AOL) Time Warner said in April last year before a large number of graduate school students attending business management schools in the Ivy League. They were holding an idea contest looking for the best strategy that could rescue the sinking media giant. Leading Internet service provider AOL bought media group Time Warner, which is four times larger that its size, in 2000 when the Internet boom was reaching its peak. Since the media coup, however, the merged group`s stock has been plummeting deep down. A team of female students from Harvard won the contest by suggesting, “You should focus on profit business models instead of seeking to create a synergy between the old and the new media.”

▷The media group must have not listened to what they said seriously. Chairman of AOL Time Warner Steve Case, who has been called a master of new media or a wiz kid of the Internet, recently resigned, a harbinger of the end of the unfortunate marriage between the old and the new media. Case was a revolutionist in the Internet age who established AOL in 1985 at the age of 26. He stunned the world by achieving the victory of the dot-com guy. Yet, he was too confident just like other heroes. The rosy outlook he had envisioned – creating a huge synergy by infusing the high-tech `Internet DNA` into the old media such as TVs, movies, magazines and music – was never fulfilled.

▷AOL, which was called the `gem of the crown` at the time of the merger, has failed to meet the needs of Internet users in speeds, the very essence of the Internet. The connection was poor and service fees were higher than rivals. New media with little substance is doomed to be ignored by the advertising industry and consumers. The stock price of AOL Time Warner, which was worth $56 at the time of the merger crashed down to $15.03 as of January 13, while the old media such as movies like `Harry Porter` and `the Lord of the Ring,` cable TV drama `Soprano` and magazine `People` has been the bread and butter of the media group. It proved right once again that a glossy cover is nothing unless there is substance in it.

▷No one knows whether the exit of Case will make this giant elephant dance again. There is already speculation that his successor Richard Parsons from Time Warner might seek a divorce with AOL. As we already witnessed with the world`s second largest media group Vivendi Universal and fifth Bethelsmann, the marriage between the old and the new media ended up with the failure of the new and the return to the old media. Although people now believe that the media is a message, the technological advance behind the media is only a means. What is important is the message in it.

Kim Sun-deok, Editorial Writer, yuri@donga.com