Nobody's safe in this economy
This week brought news of two major executive shake-ups, one that’s likely been coming for months and one that shocked the holy crap out of me.
What should have been expected was the ouster of Randy Falco, former president of NBC Universal’s Television Group (now NBC Local Media), as head of Time Warner’s AOL. Falco took on a tough task when he agreed to run AOL – the unit has struggled since its unholy merger with Time Warner way back in 2000. At the time, AOL was the most hugely overvalued compnay in the Internet bubble, so Jerry Levin agreed to give it Time Warner, essentially erasing Ted Turner’s entire fortune.
Falco is being replaced by Tim Armstrong, Google’s senior vice president, a guy who might actually have a clue about running a new media company. Falco was brought in because he knew everyone on Madison Avenue, but knowing how to sell TV ads didn’t really do much for AOL. I’m glad that people are figuring out that new media works differently than TV.
At the Deutsche Bank Media conference earlier this month, Time Warner Chief Jeff Bewkes had this to say about his struggling Internet unit:
“AOL’s audience has been disappointing to us, to the management, and to you,” the investors, Bewkes said. “AOL’s subscription business (those wacky people who still live in the nineties and pay good money to dial-in to AOL) is holding better in terms of retention of users, money earned and cash flow generated than most of us thought. It’s outperformed management expectations.”
“On the audience ad-supported part, which is the growth part of AOL – the users are growing, and the page views are growing. For example, in the fourth quarter of this year page views were up 10% across AOL, even though our subscription base was dropping.
“In the main AOL programming categories – verticals like news – traffic was up 50% to 70%. From a user point view, which would be the brands inside of those verticals such as Mapquest, AIM, TMZ and ICQ, the user metrics are pretty good in a number of places across AOL.”
“Still, a disappointing area for us is ad sales monetization, which has not been keeping up with the strength of the user metrics and page views I just described.” Welcome to everyone’s world, Jeff.
“We’ll continue to operate it and improve it and get value out of that position.”
I take that to mean until he can raise AOL’s value enough to pawn it off on some other poor sucker.
So Armstrong has his work cut out for him, but perhaps he can right AOL’s ship by bringing it some of Google’s innovation. AOL remains a huge brand; there’s no reason why Time Warner shouldn’t be able to eke some value of it. Well, once the economy eases up, that is.
The ouster that shocked me, and most other journos covering Hollywood from what I read, was that of Peter Ligouri, who led Fox to four consecutive seasons as the number-one network. For that, he was fired. If people are getting fired for kicking ass at their jobs, then we are all in trouble.
Go with God, Peter Rice. You’ve got a declining American Idol on your hands and the toughest TV market we’ve ever seen. Repeating Ligouri’s performance will be a neat parlour trick if you can do it.
Meanwhile, maybe Ligouri can join Peter Chernin and Katherine Pope at the production company/holding tank for Hollywood’s most competent executives who don’t have jobs.