Media Curmudgeon

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February 06, 2007

Corporate Reputations and The Media

In sort of a follow up to my 1/15/07 posting of "Google Yes, Media No," in which I noted that there were no media companies in the FORTUNE survey of America's Best Companies to Work For, I recently read that media companies did generally not rank well in the Harris Interactive/Wall Street Journal poll of the world's best and worst corporate reputations. No surprise here.

An article by Ronald Alsop titled "How Boss's Deeds Buff A Firm's Reputation" with the sub-head "Gates's Philanthropy Puts Microsoft Atop Yearly Survey of Best, Worst Companies" stated that "...Mr. Gates's personal philanthropy boosted the public's opinion of Microsoft."

Here some top-line results of the survey:

Popularity Contest
A look at how a selection of companies fared on this year's Reputation Quotient survey, which evaluates the public's perception of a company.

60 companies ranked in 2006 Rank from 2005 to '06

Best_____________________________Biggest increase
1 Microsof_______________________________1 Microsoft +6
2 Johnson & Johnson_____________________39 Merck +6
3 3M____________________________________22 Apple +5

Worst_____________________________Biggest decrease
58 Comcast_______________________________57 General Motors -19
59 ExxonMobile___________________________55 Ford Motor -18
60 Haliburton____________________________47 McDonald's -12

If you were to look at the entire list of 60 companies, you'd see that there were only three media companies (I'm not including General Electric, which owns NBC Universal): Walt Disney (#13), Time Warner (#48), and Comcast (#58).

Remember that the study was done among ordinary people and not among Wall Street investors, thus it was about perceived reputation, not performance. Why did Walt Disney do so well and Time Warner and Comcast do so poorly?

I think Walt Disney did well because it has always done well in these types of surveys, even before it bought the ABC television network and ESPN. I think its reputation rests largely on its theme parks. People, and especially kids, have a great time and are treated well at Disneylands across the globe.

I think Time Warner and Comcast did poorly because people perceive these companies primarily as cable operators that keep raising their cable bills and give them generally poor service. Like ExxonMobile and the hated Haliburton, I believe that people think cable companies are greedily raking in unconscionable profits (regardless of reality). Cable companies are legal monopolies (only one cable company franchise per market), and, thus, often act and price themselves like monopolies, which is typical of firms without direct competition.

I think that people like to watch TV and read magazines--the products of big media companies--but don't much like big media companies. There is definitely a dislike of "the media" and "journalists" in America today. Maybe the American public is subconsciously aware that they are addicted to the opiate of entertainment television and celebrity magazines and hate the pusher, not the dope. They blame the messenger and deny their addiction.

But prime time entertainment television, like most opiates, requires stronger and stronger doses to be effective and soon addicts crave a new excitement, a new hit. Escape entertainment is like other forms of dope—people can never get enough and are always looking for something new. They can never escape enough, or for that matter at all. Reality is not a hit show, reality is real life and you can’t escape it alive. So, entertainment and news addicts are looking for new media, new forms of entertainment and information, and a new form of escape and excitement.

Of all people, Rupert Murdoch seems to understand this audience that is addicted to big media entertainment and how it is changing. In a recent speech at the World Economic Forum in Davos, Switzerland, the chairman and CEO of News Corp. said that big media companies and governments ultimately cannot stop or reverse their reduced agenda-setting power that has been affected by the Internet and digital media. Murdoch said that media conglomerates have less influence among the continued explosion of news websites, blogs, and podcasts. He also said that the big media is “put right immediately” these days when making mistakes and, thus, have less power.

The theme of the World Economic Forum was “The Shifting Power Equation,” and Murdoch’s speech fit in perfectly. Murdoch should understand that the media has little power; after all, his NY Post newspaper and Fox TV news channel have vigorously supported Bush, Cheney, and the war in Iraq, and they have had little effect on public opinion.

Add to the “kill-the-pusher” syndrome the fact that big media companies generally have bad reputations and are lousy places to work, no wonder they have less power than ever.

Posted by Charles Warner at February 6, 2007 12:42 AM

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