By Adam Pasick
WPP Chief Executive Martin Sorrell warned on Thursday that many of the world's leading media companies are on the verge of panic amid the seismic shifts brought on by the Internet.
"There are major changes and we don't understand the speed and scale at which they're taking place," the head of the world's second-largest advertising and marketing company said at a conference held by the Internet Advertising Bureau.
He described a media landscape in which traditional media such as print and television are steadily losing ground to their new media rivals.
"I think there's a certain amount of panic among media owners," Sorrell added. "Most of these companies, ours included I suppose, are run by 50- or 60-year-olds who have trouble getting it, and who really don't want to see change on their watch."
Sorrell singled out News Corp's recent Internet acquisition spree as one sign that media conglomerates are scrambling to catch up.
"Rupert Murdoch, who I admire more than any other media executive ... has been willing to make (Internet) acquisitions almost willy-nilly," Sorrell said.
After Murdoch convened a group of his top managers to plot a new approach to the Internet earlier this year News Corp has spent about $1.3 billion to buy MySpace.com owner Intermix Media, gaming Web network IGN Entertainment, and online sports company Scout Media.
UK satellite broadcaster BSkyB -- 37 percent owned by News Corp and with Murdoch as chairman and his son James as chief executive -- has also agreed to buy broadband provider Easynet for 211 million pounds, with an eye toward developing a hybrid broadband delivery platform.
Sorrell singled out newspapers, whose lucrative classified advertising revenue streams are threatened by free Web sites like Craigslist, as one of the most vulnerable businesses.
He also warned that prices for network television advertising, which have been steadily climbing even as audiences decline, are not sustainable.
"How can traditional media continue to charge more for less?" he said.
Copyright 2005 Reuters Limited.
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