MEDIA ANALYSIS: FORUM - Will the last boss to leave please turn out the lights? Alasdair Reid asks how high-profile defections to new media will affect traditional business

Clearly anyone who’s anyone in media these days is preparing to

bale out into cyberspace. Last week’s high-profile convert to the

digital world was Martina King, who announced she was leaving her

position as managing director of the ITV sales house, TSMS, to become

managing director of the web portal company, Yahoo!, in the UK and

Ireland. She will be joined by Jerry Glover, who leaves his job as

National Geographic Channel’s managing director to become Yahoo!’s

European commercial director.

With a strong track record stretching back through her years at Capital

Radio, where she rose to managing director before joining TSMS, King is

an impressive scalp for the digital media world - but by no means an

isolated case. In recent weeks, the e-headhunters have netted a

substantial haul.

The most celebrated scalp is Mark Booth, who relinquished the top job at

BSkyB to join a venture capital company specialising in digital

investments. Then we had the acrimonious departure of ONdigital’s chief

executive, Stephen Grabiner, to join Apax Partners. Subsequently, three

of Grabiner’s lieutenants at ONdigital resigned to start a digital

television outfit. News International also recently lost Ellis Watson,

formerly marketing director of The Sun and the News of the World, and

Toby Constantine, marketing director of Times Newspapers, who left to

launch their own e-commerce venture.

Is traditional media witnessing an accelerating brain drain? And, if so,

what are the implications? Constantine believes it is happening - and

nobody should be surprised. But he doesn’t think it reflects badly on

established media owners. He states: ’To be something where you are a

stakeholder rather than a wage slave is a significant incentive. From

the media owner point of view, they are prepared to take these

losses.

On one level, it can be good in that some media companies are top heavy

and it can allow younger people to come through. But more importantly,

it allows them to hedge against the future by taking stakes in new

companies.

From our point of view, we look forward to working in association with

our previous employers.’

And Constantine is in no doubt that the moves we’ve seen in the past few

weeks herald a quantum leap in the fortunes of the new-media sector.

He adds: ’When you have expertise and experience going into a start-up,

it encourages traditional media owners to invest because they are

investing in people they can trust. They can back known management

rather than speculative ideas. We are seeing the dawn of a new era.’

There are, of course, plenty of cynics who scoff at that sort of

talk.

They imply new media is a desperate get-rich-quick gamble - the idea

being that you build up a company overnight and sell it before anyone

notices that, behind the smoke and mirrors, there’s only balsa wood and

sticking plaster. Or, alternatively, you make a fortune trading shares

in the biggest bull market sector since the South Sea Bubble.

Jerry Hill, chief executive of TSMS, is not convinced with that analysis

but he does agree that the sector attracts those with a pioneering

spirit - although not necessarily from media companies. He says: ’The

revolution is as much commercial as it is retail and media. I suspect

our industry along with others will supply its fair share of people. It

should. We have many talented people with ingenuity and ambition who

will seek to work in both the traditional and new sectors. Progressive

’traditional’ media companies are in the thick of creating a material

stake in this new territory. The excitement appears to be happening on

the outside but many new opportunities will be created in existing

companies to satisfy executives with the desire and capabilities to play

an active part in this fast-changing market.’

Do media specialists see it that way? Bob Offen, the chief executive of

Mediapolis, one of the leading buyers of space on the internet, says he

wouldn’t consider recent events as constituting a brain drain, but he

does understand why top people are tempted. He says: ’The internet isn’t

a small and untested a medium any more, especially in the US. Everyone

believes that the internet is the way forward. Yahoo! is a major

international operation. It doesn’t take much to work out why someone

like King has taken this opportunity. It’s always more exciting to work

in a medium that’s growing as opposed to traditional media which are

going to decline. If you want a challenge, you look for a gap that’s

opening.’

But can it really be true that, as Constantine asserts, there are no

negative implications for traditional media owners in all of this? Many

observers are sceptical and believe the recent departures from ONdigital

and TSMS reflect a wider malaise within ITV. Patrick Burton,

vice-president for integrated brand communications at Allied Domecq,

comments: ’ITV tried everything it could to slow down the advance of

digital; now it’s in the position of trying, and failing, to come up

with a credible and viable system of its own. It’s perfectly natural

that people are defecting.’

Burton disagrees with Offen as to the degree of risk involved here - but

he admires risk-takers. He adds: ’I find it encouraging that people of

the highest calibre are prepared to do it. I take my hat off to them.

New media will definitely benefit from the influx of these people. We’re

talking to people like Flextech and Sky about interactive programming,

but it’s clear that what they are talking about cannot be implemented

now. New people will not only help to get things moving quicker but will

also ensure that people’s expectations are managed in a better way.’

The implications for terrestrial television have to be worrying. These

will confirm the notion that it’s all about managing decline. And while

managing decline will be regarded as an exciting challenge by some, it

won’t be by others.

This article was first published on Campaign