Big Companies, Small Companies, and Media Markets

I take Fred’s point — big companies are slow and small companies are fast(er) — but a) in the abstract it’s not news, and b) in his specific,  gleefully nihilistic conclusion (that small companies “obliterate” media incumbents) it isn’t supported by the facts.

Case in point: How many of the top ten media companies in the U.S. were founded in the last decade? Zero. How about in the top twenty? Two-point-five (Google and Yahoo, plus Ebay kinda). Sure, there have been changes in relative position, but despite being in the most technology-driven tempestuous period in media industry history, precious few technology-centric media companies have managed to penetrate the top twenty, nor has any notable media company fallen off the list.

It is, in short, up-with-technology utopianism to say that small technology companies are “obliterating” media markets. Small media companies are what they have always been — sources of innovation (and sometimes excellent investments) that, when successful, are usually acquired by incumbents.

Granted, it may eventually happen — YouTube may be the next NBC — but it seems at least as likely that the list ten years from now is the same as the list today. That isn’t, of course, as much fun as saying that ” big companies deliberate” and “small companies obliterate”, but it has the added advantage of being more likely.

[Update] I have edited this piece to bring the data up to present. The original media data I used was from 2003. Mea culpa.

Related posts:

  1. Yes, We Have No Small-Cap Equity Analysts
  2. Quel Surprise: Google Absent from List of Shareholder-Friendly Companies
  3. Google is a Media Company! Is Not! Is Too!
  4. Small business, Mike Kinsley, and G.W. Bush
  5. Ellison: Too Many Software Companies

Comments

  1. Jane Smith says:

    I once had a boss that during the S&L scandal was indicted on 99 Felony counts (reduced to 55 Felony counts). He pled not guilty and went to trial. My former boss was smoother than a snake. He was the best salesman I have ever seen or worked with; he had an exceptional talent.
    Needless to say a jury of his peers found him not guilty.
    However, after working for him briefly, I understood the cliché “where there is smoke there is fire”.
    Time will tell if Ken Skilling is equally as talented.

  2. marc says:

    ummmm, Paul… those figures are from 2003… today, Google, eBay and Yahoo would all be in the Top 20.

  3. Ajay says:

    Actually, his statement is more plausible as I think your statement about the top ten staying the same will be shown to be decidedly wrong. Everyone knows there are big changes coming in the media marketplace. To expect the top ten to stay the same in the face of the huge changes coming is to ignore every other market in the past that has been racked by technological change.

  4. Marc — Thanks. My late-night oversight. I’ve edited the piece to re-make the same point, but conceding there are some new companies in the top 20 list. I still believe the data shows it’s part of the mythology of technology that upstarts overturn the established order in media.