Opinion: Social media are badly overvalued

It is not often that industries take collective leave of their senses. And there are few things more unnerving for a commentator than all concerned doing very odd things. You get to the point where you believe that 20,000 lemmings can't be wrong.

The media are going through such a phase at the moment. As an industry, whether it be print, broadcast, telecoms or web-based, they have become obsessed with delivery.

All around the world, media companies have decided that the tried and tested ways of reaching their customers are no longer sufficient. That which they understand is automatically dimin­ished in their eyes; that which is different, prefer­ably new and not understood, becomes irresistible. So they are engaged in a land grab where every possible route to market becomes a must-have.

I have not heard a convincing argument for the Murdoch purchase of MySpace, still less the amount of money paid - nor the Google acquisition of YouTube, other than that the search engine has probably the most overvalued shares in any market, so money comes rather easily to it.

Are these web-based communities a business? Do their members really have much in common other than that they access the site? What are the barriers that will prevent a mass exodus to another site when the fashion changes?

The possible merger of cable company NTL and ITV takes us deeper down the road to madness. Neither has impressive management or shows much ability to get the best from what it already owns. The idea that a merger will solve their problems suggests they have not understood that the golden rule of success in the media is content, not delivery. People watch programmes, read articles and listen to music. How that is delivered may appear a bit special, a bit new or a bit difficult, but it will quickly become a commodity.

There will be no such thing as a captive market in the future. On the other hand, content providers with a reputation for quality, trust and accuracy - a brand in other words - will always find an outlet. If the content is good, distributors will come to you. JK Rowling does not need to buy a publisher.

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