It’s been 32 years since Network emerged from Hollywood to win 4 academy awards be nominated for 6 more. At the time, CBS was #1 in broadcast news, and Walter Cronkite was a fixture on the American landscape. All Americans watched as Walter told us about the shooting of President Kennedy, and as a man first put his foot on the moon. In the late 1970s we all scoffed when Network projected a future in which news would become entertainment, when a "newscaster" could become a ranting lunatic like Howard Beal the "mad profit of the airwaves" (anyone watch Jim Cramer on CNBC lately, or Bill O’Reilly on Fox News), and ratings would be so critical that people would live or die by them.
How little did we know the predictiveness of this film. It wasn’t long before Lawrence Tisch took over CBS, drastically slashed costs in news and put the network focus on ratings over content. What that set in motion is now almost hard to recognize, as 3 decades later U.S. network news is struggling to survive in the internet age. Seperating news from comment, and fact giving from entertainment, has not only allowed "The Daly Show" to be considered news (on The Comedy Channel) but thousands of websites to get into the "news" business. Increasingly, tens of millions of Americans rely on the internet for their news – abandoning newspapers and televion as well.
And now CBS has purchased Cnet (read article here). Paying 4.5 times revenue, and over 100 times earnings. But this may well be a survival issue for modern news reporting. We will never again return to the family all watching an anchor, or even depending upon television to report an election victory or breaking item (as I write this I’ve been updated via the web that within the last 3 hours Senator Kennedy of Massachusetts appears to have suffered a stroke – something network news watchers won’t learn about for another 6 hours). CBS must find a way to evolve or watch as its ability to maintain "news" shrinks into oblivian. The price CBS paid appears high – but what is the right price for survival?
Will this work? History has warned us to be skeptical. When Time Warner of HBO, CNN and other cable TV fame bought AOL it was heralded as a change in the media landscape. But the acquisition made no difference on Time Warner’s future as AOL stopped evolving and both companies found themselves struggling to survive.
For CBS to avoid this fate it must be careful how it treats this acquisition. Firstly, CBS MUST Disrupt the existing CBS organization. Make clear that not only news, but traditional entertainment (such as prime time dramas and sitcoms) is losing audience to the web. More people watch top YouTube flicks than watch most network television programs. The people at CBS from the top all the way to the bottom have to see their Lock-ins to traditional business attacked, and made clear that the future will be very different (much as Mr. Tisch did when he took over the powerful but struggling enterprise so long ago.)
Secondly, CBS must make sure Cnet is managed in White Space. Cnet must be challenged to LEAD CBS by setting high goals and then accomplishing them. CBS must resource Cnet to succeed, operated in White Space, and then work very hard to make sure EVERYONE becomes as familiar with Cnet as we now know about Google (a lofty goal – but the one to shoot for). Traditional CBS must be guided to watch and learn from Cnet. To rapidly adopt what works in this White Space project. CBS must migrate toward the internet-enabled media future, and Cnet must be the guiding group providing insight to what will work. This is a big challenge for Cnet – but it must take on this challenge and be held accountable for results.
CBS is facing big Challenges as media goes through this wrenching change. No longer do newspapers "own" a city and therby its advertisers. No longer do networks – broadcast or cable – have a grip on viewers that virtually forces them to watch ads as well as programming. The web has changed what we can do to be informed and entertained. Google is leading this market change today, followed by Yahoo! and News Corp. Will CBS make it through the challenges? Will CBS remain a viable competitor in the media landscape of 2020? Or will it disappear like a dinosaur overtaken by a shifting environment? It depends on what CBS does with Cnet. Managed right, this could be the most powerful decision the company makes this decade. Managed wrong, and CBS could be something we have to teach in high school history as students discuss the "golden age of TV."