Managing expectations in an age of overblown media valuations

You could argue that the most important skill of any media leader is the ability to temper expectations. Everyone’s constantly looking for the next unicorn, and as soon as some hot new thing appears suddenly everyone’s on the accelerator and nobody’s on the brakes. The next step is typically a sky-high valuation and successive rounds of VC investment – followed by a tepid or downright chilly response when the property takes longer than expected to find its feet or fails to deliver a return.

Look at what happened with Mashable, which sold for a fifth of its Spring 2016 valuation of $250m at the end of last year, and which had staked its fortune on the ability to reach a generalist audience at huge scale. When it sold to Ziff Davis in a “fire sale” price in December, much of the analysis was around why the publisher’s earlier valuation was so outsized.

In an article on the phenomenon, which includes suggestions that VICE and BuzzFeed are having the same problem on a smaller scale, the New Statesman’s Jasper Jackson argues:

“It’s those expectations – which treat media companies more like tech companies – that take the gloss off relatively successful outfits.”

Nor is the phenomenon reserved for brand new media companies. In this age of transition, even legacy properties can receive huge amounts of hype when it launches a new product or pivots to the medium du jour. As my Media Voices co-host Peter Houston mentioned on last week’s episode, David Pemsel’s challenge with the Guardian now isn’t finding new sources of revenue – it’s managing the expectation that it will break even next year, as was enthusiastically foretold last week. Failure to do so would cast a pall over not just the idea of the Guardian’s sustainability, but the ability of legacy organisations to sustain themselves at scale through membership.

Most media analysts have lived through plenty of similar hype cycles. Despite that, because this is an industry where means of production and distribution are shaken up or disrupted so rapidly, we’re all still prone to hype up new forms of media because we want to believe there are solutions out there. I can still remember being certain that Circa’s constantly updating form of news publishing would herald a new dawn for news consumption, and look how that turned out.

The latest media hype bubble to burst might be that of the chatbot. As Wired’s Erin Griffith and Tom Simonite put it, in an article titled ‘Facebook’s virtual assistant M is dead. So are chatbots‘:

“It’s difficult to  remember now, but there was a moment in early 2016 when many in the tech industry believed chatbots—automated text-based virtual assistants—would be the next big platform… at its 2016 F8 conference, Facebook pitched bots to developers as the best way to connect with 900 million Messenger users.

“Few expected that voice assistants like Amazon’s Alexa and Google Assistant would thrive and text-based chatbots would become a punchline.”

That Griffith and Simonite can claim chatbots went from ‘next great hope’ to ‘punchline’ in well under two years isn’t surprising given the speed with which next great hopes pop up. Amara’s Law – that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run – is a useful guide. The speed at which the first part of the law is being fulfilled is faster than ever, leaving behind expectations that were impossible to deliver on.

But that isn’t to say that the second part of the law won’t eventually be fulfilled. Chatbots might not be the saviour of the media industry quite yet, but there are indications that eventually they’ll be of huge significance for companies well-placed to use them. In a response to the Wired article Freia Nahser, news and innovation reporter for the Global Editors Network, compiles a list of some of the ongoing chatbot experiments that might bear fruit:

“Politibot are on their way to growing a business out of their chatbot and they are sustaining it by a global membership model. On top of chatting on telegram and Messenger, the team have also launched a podcast and signed a collaboration agreement with Random House Spain. Throughout 2018, Politibot will introduce sponsored content and talk about some of the publisher’s non-fiction books in its daily conversations with users.”

And there are still experiments going on specifically to ameliorate some of the problems that have affected chatbots to this point, such as a lack of a coherent personality and the ability to chit-chat.

As with everything, there are no guarantees that chatbots – or any other medium – will be any sort of solution to media industry woes. But I’m willing to bet that the ability to manage expectations will become ever more vital as media valuations continue to tend to the ridiculous.


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Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.