It’s a lesson as old as the ancient Greeks — reasserted on a single day last week at three big American media companies: “The only thing that is constant is change.”
News of a familial torch-passing by Rupert Murdoch at 21st Century Fox, a meritocratic transition at Showtime Networks, and a return of the co-founder at Twitter all broke within a little more than six hours on June 11. Fittingly for the 24/7 news era, word came via a different platform for each successive story — first by cable TV, then through a pair of entertainment trade websites, and finally in a tweet.
At 6:47 a.m. Pacific Time, CNBC business reporter David Faber told viewers that media titan Murdoch was moving aside at Fox to make way for new leadership by his sons, James and Lachlan. Thirty-eight minutes later, Variety and the Hollywood Reporter broke the news that Showtime CEO Matthew Blank was passing the cable group’s top job to David Nevins. At 1:10 p.m., @Twitter alerted its 40 million followers to the day’s biggest surprise: “Our CEO, @dickc, will step down as CEO, and we’ll welcome @jack as Interim CEO on July 1.” After six years of failing to hitch enough cash flow to his company’s enormous audience, Dick Costolo was out at Twitter, and co-founder Jack Dorsey was back, at least for the time being.
The media enterprises arrived at their respective milestones by way of wildly disparate paths. But the new leaders face common challenges and opportunities — the likelihood of continued consolidation, the hunt for bigger and better distribution platforms and the delicate seduction of consumers who are increasingly unpredictable about whether and how much they are willing to pay for content.
The news from 21st Century Fox had been long predicted, but it still surfaced like a revelation, because the elder Murdoch has been such an outsized, seemingly immutable, figure. Starting with his domination of Australian newspapers, the restless magnate expanded worldwide to movies, television, digital networks and global news outlets, including the Wall Street Journal and Fox News Channel, the latter becoming a game-changing force in American politics.
Though the elder Murdoch will continue to advise the family empire from his co-chairman’s roost, investors and the public have to wonder how much of the father will live on in the sons. Will the princes Murdoch manage by the departing king’s unwritten credo — consume or be consumed? Will James, an avowed environmentalist, bend the company toward a more liberal political path? And will the somewhat fractious Murdochs end up modeling a smooth corporate transition for Sumner Redstone’s Viacom and CBS Corp. to try to emulate when the companies’ 92-year-old controlling shareholder passes the torch?
The latter question will be no small concern, coincidentally, at CBS Corp. subsidiary Showtime, though the premium cable outlet remains a cash-generating machine, so any successor to Redstone would seem loath to risk tarnishing the jewel. New Showtime boss Nevins — overseer of successful shows including “Homeland,” “Masters of Sex” and “Penny Dreadful” — will have to find a way to reproduce that kind of quality content in a fiercely contested ecosystem that this year saw the release of 350 scripted series. Competition for top showrunners and talent will be relentless, though Nevins has already demonstrated a deft touch in convincing David Lynch to stay onboard to direct “Twin Peaks.”
The imperative for superior content at the cabler will be matched by the need to deliver it in an appealing package. Showtime needs to make a strong impression with its over-the-top Internet video service — to launch on Apple TV, Roku and PlayStation — in July. The price to consumers, beginning at $4 a month less than HBO Now, may be a good starting point.
Twitter’s challenges loom larger and are on a nearer horizon than those of the other two companies that changed captains last week. The micro-blogging platform has never been able to get its financial results to reflect its average 300 million monthly users, nor to leverage its cultural omnipresence.
The company lost $578 million last year, despite revenue of $1.4 billion, and it repeatedly missed Wall Street’s performance projections — leading, most recently, to a 25% decline in stock value in April.
Major investor Chris Sacca noted that many people sign up for Twitter but do little actual tweeting. When Costolo announced his departure, though, Sacca shifted to a conciliatory tone, thanking the outgoing CEO for growing the company’s valuation from $3 billion to $23 billion in less than five years. Still, there had been others making noise about forcing Costolo’s departure. A couple of internal candidates have been floated as his possible successors.
But a more provocative outcome hovered just beyond the headlines: Would Twitter remain a free agent? The names of possible takeover suitors continue to emerge, with Google the most prominent. The day’s hour-by-hour drama pushed the rumor mill into overdrive, to the point where one Twitter wag offered: “I reckon Rupert Murdoch is off to run Twitter.”
He was kidding, right?