Michael Wolff - Television Is the New Television: The Unexpected Triumph of Old Media in the Digital Age

THE STORY. THE MUSIC. THE LAUGHS.

On November 14, 2007, Kevin Morris, a forty-four-year-old entertainment lawyer, given to penumbral debates about modern culture and the state of media, and with a roster of major Hollywood clients, convened a daylong meeting in his law firms Los Angeles offices in the Creative Artists Agency building on the Avenue of the Stars.

A year after Google bought YouTube, Morris was wrestling with the increasingly fraught relationship between the traditional media business, which almost all of his clients were part of, and the new, aggressive posture of digital media, located 350 miles north, and a world away, in Silicon Valley. Morris, aware as everybody was of what had happened to the music industry, saw this as something of an emergency moment.

At the same time, Morris felt that logically both sides had a set of common interests, and in the end certainly needed a working understanding.

His collegial idea was to assemble interested players on both sides to discuss this shared ground, because, as he said optimistically in his invitation: Its about the story. Its about the music. Its about the laughs.

On the old media side, you had Brad Grey, the chairman of Paramount Pictures and producer of The Sopranos; Doug Herzog, who had variously run Comedy Central, MTV, and Fox Television; Kevin Reilly, a senior executive at NBC and Fox; Anthony Zuiker, the creator of CSI; Matt Stone, the cocreator and coproducer of South Park; LL Cool J, the actor and rapper; Michael Mann, the film director; Donny Deutsch, the advertising executive and CNBC personality; and Scarlett Johansson, John Cusack, and Matthew McConaughey, the actors.

No matter how successfulperhaps as a particular result of their successeach reflected the anxieties of an industry that was ever more frequently being told it was threatened on all fronts and, culturally speaking, totally yesterday.

On the digital side, you had a less august but significantly more cocky group: Jordon Hoffner of YouTube; Kurt Abrahamsen and Adam Stewart from Google in Los Angeles (the home office had passed on the invitation); Mark Kvamme of the venture capital firm Sequoia Capital, which had backed the Web series Funny or Die; and Marc Andreessen, the creator of Netscape, on his way to being among the most significant and influential venture capital figures in Silicon Valley

The imbalance was notable and uncomfortable for everyone or at least for everyone on the old media side. There was, even, a kind of slack-jawed responseperhaps not least of all because Hollywood power is not used to being challengedto the certainty, impatience, and what rather seemed like the advanced intelligence of the tech side. Very quickly it all seemed something like a math class mixing slow students with advanced ones.

Morris began the day gamely recalling his college economics and Joseph Schumpeter and creative destruction and the need to come to terms with how great transformations happenhow to manage destruction. He drew a triangle on a whiteboard, with one point for tech, one point for talent, one point for media companies. We are all in this together, he said confidently.

When that did not get an obvious assent, he changed it into a kind of exhortation: Are we all in this together?

Well, that depends, responded Andreessen finally.

The technology view was in fact quite the opposite of dependence or cooperation or much meeting of the minds. It was rather that the new digital media world had unlocked media secrets: user-generated content, and new types of functionality, and a view of media that embraced remarkable new efficiency and could now only look at the traditional media discipline as hopelessly inefficient.

Kvamme, sure that Funny or Die would trump in its over-the-top distribution and bare-bones economics the $2-million-an-episode South Park with its cumbersome and costly ViacomComedy Central relationship (the South Park creators had just negotiated a 50/50 deal to split digital profits with Viacom, which had committed to handling advertising), got up and went to the whiteboard and brusquely erased media companies on the triangle, replacing it with just consumeremphasizing this new, disintermediated world.

The Google guys were even more direct, pointing out, with some impatience, that there was quite some lack of understanding in the room about the nature of the revolution that was under way.

It was Andreessen, whose word alone would come nearly to have the power to create tech success, who was perhaps most daunting and in the end most frighteningsignaling how far apart the two sides were, and how precarious the television business suddenly seemed. Andreessens lack of regard seemed all the more confounding because he kept expressing his own personal enthusiasm for television, telling everyone what was on his list to watch in the coming weeks. And yet that sentiment was divorced from the future as he saw it and as he described the complicated new terms and relationships in a world of digital media.

Finally, to what had become from Morris a kind of pleaAre we in this together?Andreessen replied, Excuse me. We are against each other. This is a zero-sum game.

We all wanted to run away, recalled Matt Stone in 2014.

A funny thing happened over the intervening years, though. A strange schism developed. While everywhere there was the belief, near absolute, that the future of media lay with some ever-transforming technology, twenty years into this revolution, the value of traditional media, even with big losses in print and music, dramatically grew, with an Ernst & Young study in 2014 finding traditional media and entertainment companies increasing their lead as one of the most profitable industries, with television margins as high as almost 50 percent.

And yet, at the same time, there was the unquestioned certainty that technology had fundamentally altered media behavior and scaleMark Zuckerberg would say in late 2014 that you cant really build a business with fewer than a billion usersand hence the nature of media leadership and economics.

In fact, Matt Stones South Park, continuing its remarkable seventeen-year run on Comedy Central, recently made a $30 million yearly digital deal with Hulu, while Funny or Die languished.

Despite all this, the belief continues, cultlike, that digital media will soon and decisively prevail.