Once upon a time, business visionaries could look at companies as diverse as
AOL and Time Warner and see synergies there. One provided content; the other
the means to drive that content to consumers. But those days are long gone now,
and the new bosses of the merged company are saying that they are "committed
to selling noncore businesses". The question is what, exactly, AOL Time
Warner’s core business is.
Evidently, as Daniel Gross points
out in Slate, it still includes AOL. A spin-off of AOL would make a much
bigger dent in the company’s $26 billion of debt than what seems like a rather
attempt to sell off the book publishing business for somewhere south of
The weird thing is that if you believe that big media conglomerates make sense
at all, then you would presumably believe that publishing operations have a
place within them. Gross points out that Time Warner has done a pretty bad job
of finding synergies with its book department, but that doesn’t mean it can’t
be done. The New York Times, for instance, under its new editor, Howell Raines,
is making a much more concerted effort to make sure that its publishing arm
publishes its own journalists’ work. And although Talk magazine didn’t
work out in the end, there was surely some substance in the idea of finding
synergies between a magazine (Talk), a movie studio (Miramax), and a publishing
house (Talk Miramax Books). Time Warner has the magazines and the movie studio:
why not keep the books?
I hate to even float the idea, because authors have a hard enough time as it
is, but it would make perfect sense for Time Warner’s publishing house to automatically
write the film rights into every contract it signed with a new author. Since
most first-time authors are happy to get picked up with a major publisher at
all, it would probably cost them very little. But Warner Bros would then have
a huge number of film rights which it could either develop or sell: every time
it had a bestseller on its hands, it would make money not only from the book
but also from the film.
What’s more, the synergies run both ways: books can become big films, but films
can become big books as well. Look at the New York Times paperback non-fiction
list this week. Three of the top six books are film tie-ins: Catch Me
If You Can, The Gangs of New York, and the Antwone Fisher book.
Talk Miramax is far too small to turn films into mass-market paperbacks, but
Time Warner isn’t.
As Michael over at 2Blowhards never
tires of pointing out, the general public doesn’t like what he calls "contempo
lit". And people are conservative when it comes to books: that’s why so
few authors ever make a living by writing fiction. Readers only buy books by
authors they know, and (of course) they only know the authors they read. So
a handful of writers benefit from a virtuous circle, and the rest are largely
ignored. Film offers publishing houses a way out of this dilemma. Once I’ve
spent a couple of hours watching Frank Abagnale or Antwone Fisher on screen,
I feel I know and like them enough to go out and buy their books. These books
are review-proof: look at the way that none of them has a link to a Times review.
Antwone Fisher could be the worst writer in the shop, and people would still
rush out and buy the book.
But my point is more about AOL Time Warner than about the nature of paperback
bestsellers. Publishing houses obviously have a place in a media conglomerate,
in the way that dial-up internet service providers don’t. But AOL Time Warner,
flailing around for cash, is selling its books division even after all the AOL
guys have left senior management. OK, books are a low-margin business, and maybe
there are good reasons for putting up the "for sale" sign. But it
does leave me wondering whether AOL Time Warner has anything approaching a strategy.
For ever since Time Warner was bought out by the dot-com cowboys, the indications
have been somehwat to the contrary.