The Media’s Musical Chairs
Volatility is the new norm for the media. So what happens to all that empty office space?
Last month McClatchy Company, which publishes dozens of newspapers around the country including the Miami Herald and the Kansas City Star, announced it would cut 3.5 percent of its staff. Earlier this year, the Denver Post moved its editorial staff out of its swanky downtown Denver offices to cut costs and put employees inside its suburban printing operation. Meanwhile, AT&T, just days after buying Time Warner, announced it will go on an acquisition binge.
Following more than a decade of consolidation and technological upheaval, the “new normal” for media is constant flux. Print newspapers and magazines are shrinking, while online news outlets continue to struggle with winning revenue models. Television viewership is declining, too, but video-on-demand and content streaming is on the upswing, as is hyper-targeted content and advertising.
In an industry as volatile as media today, with companies in different media sectors experiencing historic declines as well as surging investment and revenue, flexibility stands as a priority. Media companies have enough to deal with without hunting for new office space, trying to manage empty space, seeking sub-lease tenants and how to absorb and consolidate new acquisitions into the office environment.
Enter: agile office providers, which began with the idea that companies could ditch big deposits, the long-term, restrictive leases and the upfront costs of building-out an office to their liking. Instead, they’d get furnished offices designed and branded for each individual company, their own personal workspace and design consultants, and office managers who’d handle the wi-fi, the coffee and any problems in the office.
Today, media companies wrestle with the same kind of uncertainty as do startups. Money is tight. Growth is a giant bet, one always driven by the Internet and new technology, as well as shifting consumer behavior. Media companies never know what’s around the corner — recent international trade activity, for example, has boosted the cost of paper in such a way that some newspapers, such as The Daily Sentinel in Grand Junction, Colorado, was forced to cut publication down from seven days a week to five.
The profound disruption of the media industry is well-served by a safety net — and punishing leases by landlords is more a threat than a net. Knotel aims to be that safety net. The company is growing by leaps and bounds, acquiring office space around the globe. Knotel today has 70 locations in New York, San Francisco, Berlin and London, spanning more than 1.4 million square feet. Knotel’s growth in New York City — the media capital of the United States, if not the world — is a boon for media, as companies shrink, expand and experience a wide variety of daily change.
And that’s not fake news.