Book review: The Curse of the Mogul

The rise of the Web promised great upside for media companies: expanding markets, declining distribution costs, the chance to offer new products and services. Yes, it was clear that the Web would eventually wipe out some revenue sources, like print classifieds. But growth, it was assumed, would more than compensate for such losses. "The Curse of the Mogul" argues that this upside was a mirage. Jonathan Knee and his co-authors, Bruce Greenwald and Ava Seave, observe that media conglomerates as a whole have underperformed since the advent of the Internet. The Web has eroded the barriers protecting traditional businesses without improving the competitive position of even one incumbent. For a new competitor, of course, lower barriers mean opportunity, but they will mean opportunity for still newer competitors, too, making it difficult to establish a sustainable advantage. Citing Warren Buffett, the authors say that companies should be "continuously digging the moat around their business." But media companies have often done just the opposite, "inadvertently construct[ing] bridges for competitors when they think they are strengthening the moat."