SYNERGY, ONCE THE MOST POPULAR of corporate buzzwords, was pronounced dead in separate Wall Street Journal articles last week — one about Tribune Co., the other Time Warner.
Frankly, the funeral is premature, and accepting the “Synergy sucks” angle requires a degree of willful myopia. Right before these stories broke, after all, News Corp. marshaled its varied assets — including Fox, sister cable networks and Web site MySpace — to help propel the third “X-Men” movie to a stratospheric opening. While gauging how much the tie-in onslaught helped is a guessing game, to quote a Jewish mother, “It couldn’t hurt.”
Nevertheless, the Tribune and Time Warner stories do highlight synergy’s limits, and how new technology and a changing competitive field have undermined the best-laid plans of corporate behemoths to achieve the world-dominating results upon which investors insist.
The Tribune case is more specific, bringing to mind a favorite “The Far Side” cartoon in which cows and sheep stand in little segregated circles sipping cocktails. “What have I always said?” one cowboy says to another. “Sheep and cattle just don’t mix.”
For this discussion, substitute “newspapers” and “TV” for “cows” and “sheep.”
SINCE ACQUIRING TIMES MIRROR in 2000, Tribune’s grandiose agenda of wedding local TV and newspapers in major cities hasn’t delivered two-plus-two-equals-five dividends, largely because the two media speak completely different languages.
If anything, the Washington Post has a better model through its control of a D.C. radio station — a more logical marriage providing a secondary outlet for Post reporters. Print and radio are more compatible than newspapers and TV, though in general the attributes that pop in broadcasting — energy, animation and the willingness to sound off on any topic, conscience-free — would surely make most newspaper editors and ombudsmen wince.
Whatever the reason, Tribune never bridged the culture gap between TV and newspapers, just as it was unable to capitalize on its powerful TV station group to launch syndicated hits. Instead, the stations mostly snubbed Tribune’s offerings while buying series from outside suppliers, and those that did get on, such as a daytime program featuring psychic James Van Praagh, failed. Apparently, a paternal-figure spirit with an “M,” “C” or “L” in his name forgot to pass along a warning about the show’s fate.
In its defense, Tribune is hardly alone in struggling to exploit print-TV synergies. The New York Times, for example, recently exited its partnership with Discovery in the Discovery Times Channel, and Time Warner’s goal of using its publications — including Time, People and Entertainment Weekly — to buttress CNN and promote those magazines has never fully materialized.
(Let’s pause here for two disclaimers: I say this having viewed the TV beast up close due to an affiliation with TV Guide Channel, where, thanks to modern advancements, the process of getting me camera-ready is down to three hours. Also, as a former Los Angeles Times employee, I still hold Tribune stock options, which are worth a helluva lot less than when I departed in 2003.)
AS FOR TIME WARNER, top execs’ acknowledgement that compelling cooperation between divisions hasn’t panned out doesn’t mean there aren’t advantages to being huge, as CEO Richard Parsons stressed in the Journal piece. The real issue is that whatever economies of scale the company enjoys, its bulk prevents even major successes from significantly moving the stock.
Then again, satisfying Wall Street is a challenge facing everyone in the media sector except those blessed with new-media sizzle a la Google, and not to rain on that parade, but some of us remember how all those “We’re rich!” celebrations a few years ago ultimately turned out.
So while synergy was clearly oversold in the early ’90s, at a time when the entertainment industry seems intent on enticing consumers to “Own the book. See the movie. Buy the DVD. Play the game. Download the screensaver,” there’s still logic behind wanting to share in that diversified bounty. The mystery confounding companies big and small is how to reshape old media to fit an uncertain future, but after a period of gloom and layoffs, even cattle and sheep will have cause to jointly raise a glass when someone finally does.