I am writing from New York and speculating about the effects of Chaos Theory in reverse. Rather than the butterfly in Beijing fluttering its wings and causing storms in distant places, the opposite is occurring.
As the pond has gotten smaller and smaller, ripples from stones dropped on the other side of the world no longer dissipate before reaching foreign shores. At this very moment, stones, big stones, are dropping!
Other material adverse considerations aside (such as global economic problems), in the media sector, its biggest icons are besieged. At Time Warner, Jerry Levin has gone - accused in 20/20 hindsight with perhaps the worst corporate acquisition in history: overpaying US$50 billion dollars for AOL. The Manhattan media mill is now speculating about when current chairman Steve Case will follow in Levin's footsteps.
In France, Vivendi also screamed J'accuse! at Jean-Marie Messier over the mess that he had crafted. Result: a second media mogul is now gone too, having been guillotined around Bastille Day.
In Germany, Bertelsmann, a family business (publishing Bibles) had been built into a global media powerhouse by religiously sticking to conservative business dogma.
However, it took a gamble by taking an early stake in AOL. The successful investment helped Thomas Middelhoff rise to the role of CEO. But this summer, he and his New Media vision were martyred.
Ripple? The old guard is in the process of dismantling his media strategies.
Even the house the mouse built is not immune. Disney's board and shareholders are putting Michael Eisner on the rack too. The renaissance which he orchestrated is now well in the past. Today's cry is "what have you done for me lately?"
As almost two decades of Eisner's reign at the Magic Kingdom seems near an end, succession planning concerns are beginning to grow.
Will he be the fourth to go?
At Viacom and News Corp, the vitality of their respective heads, Sumner Redstone and Rupert Murdoch, continue to disprove gerontology's precepts.
Nonetheless, succession is an even more significant concern than at Disney.
A public rift between Redstone and Viacom COO Mel Karmazin, has, at least according to the company's spin doctors, healed.
So why is the rumour du jour that Mel may replace Michael at Disney?
At News Corp, Murdoch's employment of nepotism as the answer to succession planning is surreptitiously questioned by key institutional and strategic shareholders. Whether they'll hang in there with the kids, remains to be seen. There will be a major, compounded effect, in Asia, from all of these ripples coming from the West. While the media giants mentioned have their hands full for the foreseeable future, once the lines have been redrawn they will turn their sextants toward Asia. Why?
They will have no choice but to look beyond the restrictive borders of their matured and saturated home markets in order to achieve expansion and increased revenues.
With organic growth exhausted, corporate cannibalisation complete, and other regions too risky, Asia is the next great play for them, and the media industry. The trajectory, challenges, and opportunities of this coming push will be addressed, with a view from Asia, in the next issue.
