Web 2.0: Who needs business models?

Packaged vs. conversational is how John Battelle characterizes the interactive media landscape, which he portrays as an intra-corporate battlefield that has already claimed high-profile victims.

Battelle uses the recent departures of interactive execs from AOL, Fox Interactive Media and CBS Digtial Media, to support his theory that not only don’t stodgy corporate parents “get it,” they are deliberately sabotaging future interactive riches by retrenching into their “old media” cocoons.

 

Wired John Web 2.0 Battelle has traversed from old media to new and back again, with flying, and profitable, colors. Battelle puts forth, however, that the titans of Time Warner, News Corp. and CBS, have tunnel old media vision, incapable of grasping what he deems to be “radically different economic and business models” in new media.

 

Battelle theorizes that Jon Miller was “offed” by Time Warner, Ross Levinsohn was stymied within News Corp. and Larry Kramer was hierarchly challenged within CBS, all because “their jobs no longer fit their character.”

 

What spurred such interactive executive dissatisfaction?: 

Major media companies are realizing that their digital assets are far more valuable than they initially thought, and they are reacting by putting folks in charge of those assets who they believe will protect the company. Not the *interactive* company, mind you, but the company that owns the interactive products… 

while the major media companies are unparalleled when it comes to running companies that live in the Packaged Goods Media world, running major companies in the Conversational Media field require quite a different set of skills, and consideration of radically different economic and business models - models which, to be perfectly frank, conflict directly with the models which support and protect Packaged Goods Media-based companies.

Battelle may be “perfectly frank,” but he is not perfectly correct; Digital media is not in inexorable conflict with traditional IP. Ironically, Battelle acknowledges such: 

It seems clear to me that the folks now charged with running the interactive assets of NBC, Viacom, Time Warner, and Newscorp - four of the largest Packaged Goods media companies in the world - are charged not only with growing their own Conversational Media assets, but also with protecting the Packaged Goods Media assets of their bosses. 

What is now clear to Battelle--charged not only with growing their own Conversational Media assets, but also with protecting the Packaged Goods Media assets of their bosses—has been the integrated media rallying cry for some time. Perhaps not at the Web 2.0 Summit in Silicon Valley, but at Advertising Week, Shop.org, Ad-Tech…in the media capital of the world, New York City. 

It is, in fact, a good thing that executives in charge of interactive initiatives seek to leverage all of the IP assets of the corporate parent, just as executives in charge of a corporation’s “traditional” media assets should seek to leverage all of the IP of the corporate parent, including digital assets. 

Battelle brandishes what he labels three “unassailable” corporate pillars; The pillars pilloried, however, are merely sound business practice:

1. Ownership or control of Intellectual Property by the corporation.
2. Ownership or control of expensive distribution networks.
3. Established business models based on highly evolved approaches to advertising and subscription models.

Battelle disses the pillars as "irrelevant," but he is wrong.

Online or off, digital or traditional, ownership and control of  IP, distribution, advertising and subscription are shareholder-focused operating principles. 

At the end of the Web 2.0 day, the corporate shareholders are in control, not non-paying users.

UPDATE: Web 2.0: Who controls the ‘conversations’?