The Blog

Are Traditional Media Bosses Too Old to Compete in a Digital World?

Sky News recently revealed that only 18% of 16-24-year-olds in the UK trusted mainstream media to provide them with relevant information. It's a media generation gap which is threatening to swallow up decades of newspapers, magazines and broadcast channels.

Traditional media is rightly obsessed with "millennials", the 18-34 year-olds who have grown up with the internet. They are up to one-third of the population of most of the major economies, and are the largest, ethnically and racially most diverse generation ever. They are already some 50% of the working population of many countries and, in a decade or so, will be 75% of the global workforce. And they are, to say the least, less attached to traditional print and broadcast media than their "baby boomer" parents.

While Facebook, Twitter, and LinkedIn have increasingly become trusted news sources, traditional journalism has struggled to engage young people. Sky News recently revealed that only 18% of 16-24-year-olds in the UK trusted mainstream media to provide them with relevant information. It's a media generation gap which is threatening to swallow up decades of newspapers, magazines and broadcast channels.

Last month, Barack Obama marked his annual 'State of the Union' address by giving White House interviews to prominent YouTube vloggers. Like the US President's four-year participation in video chats on YouTube and via Google+ Hangouts, the interviews conveyed an unmistakeable message about the shift in media power.

Millennials are huge consumers of media - just differently. Deloitte recently forecast an average spend of $750 per millennial in the US, including pay TV and online video and music streaming. They are fuelling the growth of Netflix, Spotify and targeted digital news operators.

More than half of all web-browsing millennials in the US visited BuzzFeed in October, according to ComScore stats reported by Digiday. And they accounted for 61% of Vice's 25m news visitors during the same period. The four-year-old Mic was launched "because young people deserve a news destination that offers quality coverage tailored to them" and has rushed to 19m monthly uniques. Elite Daily, the news site which was launched three years ago as a wordpress blog and now claims more than 30m monthly uniques, was recently acquired by the UK's Daily Mail group for a reported $50m. And Snapchat's Discover pitches the highly-popular app to become another major news source for the smartphone generation.

BuzzFeed was a pioneer but distinctive millennial news services are now so much broader and deeper. And it's not just news tastes that are different. A US report last month said that only 40% of millennials tune in to live TV each month. The disparity between millennials' perceptions of traditional and native channels is reinforced by the US-based Intelligence Group's Cassandra Report which showed that 77% of 3,000 millennials across 10 countries said it was "important" to be informed about current affairs, but 60% said they depended on social media.

For most, though, it really is a tale of two media in which so much of traditional media seems to be getting it so wrong. The reasons are not difficult to find.

Flashes & Flames calculates that the leaders of the world's 39 leading media groups have an average age of 57 years. The five largest groups are led by men who average 72. This list includes the 91-year-old Sumner Redstone at the top of Viacom and 83-year-old Rupert Murdoch astride 21st Century Fox/ News Corp. Their respective deputies, Philippe Dauman and Chase Carey, are both 60.

Only one of the top 20 media owners has a leader under 50 - the 49-year-old Thomas Rabe of Bertlesmann. Only one of 39 groups has a leader under 40 - magazine heiress Yvonne Bauer(34) who four years ago succeeded her 72-year-old father. It is impossible not to draw the conclusion that, all over the media, 50 is considered young, evidenced by the 'new' generation bosses of Hearst (52), Reed Elsevier (51), Pearson (52), Lagardere (53), Axel Springer (52), Sony (54), New York Times (57), Schibsted (52), Thomson Reuters (54), and Britain's ITV (50).

The contrast with digital companies could not be greater. The average age of the leaders of the 16 largest digital groups is 40 - ranging from the 24-year-old bosses of SnapChat and Elite Daily to the 54-year-olds Tim Cook of Apple and Reed Hastings of Netflix, and Amazon's Jeff Bezos (51). No fewer than 9 digital leaders are under 40, and most are in their 30s and 40s.

So, traditional media groups are led by people who are , on average, almost 50% (and some 20 years) older than their digital competitors - and almost double the age of the oldest of their millennial readers/viewers.

Age does not, of course, define everything about the skills and attitude of individuals or companies. It does not really have to matter very much. But this across-the-board imbalance identifies the handicaps that many companies may suffer in their competition with digital media, namely that their people, power, language and culture overwhelmingly flow from traditional profit centres - not from the future. Future-focused media companies need to be able to think and act young.

For all their investment in digital media, many newspaper-centric companies, for example, are tellingly dominated by people with a lifetime in print. This tends to ensure a fairly typical domination of teams by journalists and advertising sales people. By contrast, digital-only companies tend to be dominated by engineers and software savvy people: the style and manner of delivery comes ahead of actual content in their corporate hierarchies and costs.

That distinction in staffing and skills influences the whole character of digital-only companies. You only have to reflect on the creativity of low-hierarchy 'new media' firms, many of which allow employees to take unlimited vacations or have all their meals, leisure and even sleep-time in the office, to appreciate that. Firms which pay for their employees' laundry, travel, home cleaning, childcare, rental cars, in-house concerts, and weekend breaks, are doing things very differently.

But this is not charity. Looking after enthusiastic ambitious young people at work encourages them to stay longer, work harder and be more committed. Money spent on perks, especially on healthy eating, could be more "productive" than the equivalent spend on higher salaries and pension plans. It's much more than gym membership and staff restaurants. And you would guess that many starting-out millennial employees like their fun-to-funky offices more than their homes.

While there are a myriad of ways in which companies compete successfully, we should expect "mature" media groups increasingly to ring-fence digital-only investments from traditional media - and to learn the lessons from the digital independents who are currently making so much of the running. These new subsidiaries need increasingly to be led by digital natives.

There's a long way for traditional media to go. Their young competitors are a potent reminder of the scale of media revolution now underway. Take it seriously or else.