It is, by now, an all-too familiar story. The conventional core of media businesses is vulnerable because of structural challenges: changing consumer habits, threats from nimble, digital start-ups and a fast-changing marketplace that has no respect for time-honoured business models and ancient brands.
Now he's written a book, Creative Disruption, on how businesses should be ready to accept, cope and thrive on the challenges digital competition brings. I caught up with @Waldo in London to probe further into all that.
Is there a cure for death in the garden?
Creative Disruption cites many examples of businesses - HMV, Kodak, the Encyclopaedia Britannica and some newspapers groups - who failed to act fast enough to reinvent their core physical-media based business models. And it ends with a chilling epilogue, by way of an old Latin saying: "There is no cure for death in the garden" (or Contra vim mortis, medicanem non est in hortis, if you prefer). Or as Waldman puts it, for some businesses the transformation needed just won't be possible.
"Perhaps they have left it too late; perhaps their balance sheets are too weak to fund any real transformation; or perhaps their owners would rather just milk the business for cash while they can," he writes.
So does he feel media companies are fully grasping the size of the challenge ahead of them? Are people still hoping their core business - in the case of newspapers, circulation and display ads - will come good in the end?
"I think it depends. Plus you have to remember what people think and what people say publicly. If you run a public company you can't say 'my business model is broken' because investors will get rid of you and find another CEO.
"At HMV for example, its CEO Simon Fox is fantastic, a really good leader - but it's like the Encyclopaedia Britannica: it might just be one that it has to get much smaller and change a lot of the way it operates.
"A lot of these businesses, if you look at regional newspapers for example, from the late 1970s to the mid-2000s, it was a spectacular period of growth and you might just see them shrink back to where they were before that."
On the hunt for adjacencies
One of Waldman's prescriptions for "legacy" media businesses tasked with protecting their core business model and innovating into digital is to find what he calls adjacencies: footholds in industries slightly separate to a company's traditional sectors, ideally with digital and/or regional growth built-in. In 2001 South African newspaper group Naspers, for example, bought a $32 million stake in Chinese web services company Tencent. That stake is now worth more than $14 billion.
Not everyone can hit the jackpot like that, but what kind of adjacencies should regional newspaper groups like, say, Johnston Press look for now? The prognosis is not good:
"I don't think they can. I think those businesses are too difficult; they won't change and grow. There will be some resilience in local retail and property advertising, but automotive (advertising) has gone to Autotrader which does a better job; property is more resilient than people think and jobs is throttled because of the public sector spending freezes and the general shift to the internet in private job spend...
"If you are a business that does 'x' and you've honed this business into a state of perfection by honing your margins, like Johnston Press did... to then change that business and do 'xyz' plus 'abc', that's not just a tweak, that's fundamental. Compare that to WPP or Cisco, where they have regeneration as part of the core."
Culture wars: the Internet "versus" print
A business's philosophy and culture is defined by what it does well. So journalists and ad managers have, for decades, been good at filling pages with stories and ads. To suggest this might not be the thing that will take the business forwards to profit in future can be a hard thing to deal with - and Waldman was the person doing the persuading at GMG.
But despite the pains of shifting a business towards online, he can understand people's reluctance: "Early on, you've got to remember that things only got really bad in newspapers with the credit crunch. It was only then that classified advertising started to fall away and advertising generally fell down and everyone started to feel the pinch," he says.
"Yes there were people who said 'why are spending so much on the web', but we also spent a lot of money on new presses as well. The difference with The Guardian and some other places was that Alan (Rusbridger, Guardian editor-in-chief) and Carolyn (McCall, former Guardian Media Group CEO) were very supportive of what we were doing online."
A smaller slice of the media revenue pie
With so much competition, is it simply inevitable that Big Media players will have to accept lower profits and margins?
Waldman says it's a case of accepting reality: "The hardest thing for companies to accept when they've been very successful is if they keep doing those same things, they won't get the same return. It takes quite a long time to realise that. It's like those cartoons where Wile E Coyote runs off the cliff but keeps on running and doesn't stop.
"Where you accept that this is a permanent reversal of fortunes is one of the hardest things to deal with because it's very rare you get a single provable point where you know what's happening... At what point do you know the wheels are coming off? You might just think you're running out of petrol."
And then there are the scapegoats. "When Encyclopedia Britannica sales dropped off they blamed the Gulf War," says Waldman. "It's like in the regional press where they kept saying the sales will come back and it's all cyclical."
GMG's M&A ventures - could have gone further?
Waldman talks in glowing terms about business that can consistently and successfully buy up start-ups and get stakes in companies in growing sectors (ideally in emerging economies and in digital media). United Business Media and WPP are two that have the M&A game down to a fine art, churning out deal after deal (I interviewed UBM chief David Levin on this very subject last year).
GMG wasn't shy in the M&A market: it divested half of Autotrader group and bought half of B2B publisher Emap, in a joint venture with private equity house Apax Partners. Waldman says the rationale in the latter deal was to find one big solid asset, rather than buy up and manage 25 separate businesses.
Another acquisition was paidContent, the US-based digital media economy news start-up founded by journalist Rafat Ali (I was paidContent's UK correspondent in 2009 - see my note below). Waldman defends all these decisions, but he sounds somewhat regretful that GMG didn't go further.
"The hardest deal is the first one... If you take a deal like paidContent, that should have been the first of many moves and we just didn't have a follow-up. The challenge was that you have to make that work, but it was too small a move to make a dent on its own.
"paidContent's fantastic, it was good then, it's great now, but as a business it's only meaningful to a company the size of GMG if there are six or seven deals like that. It's very difficult when you have to prove the return on that investment quite quickly and if it takes longer that can be deemed a sign of failure. But in fact it's proof you're heading in the right direction."
So did he want to buy more things where others didn't? "No, it's not that I was in favour and others weren't, I'm being critical of myself," he says.
LoveFilm and innovating the innovators
It's one thing to shake up a physical media-based business, but now Waldman has joined the digital insurgents: LoveFilm is the online upstart that's giving Blockbuster and other traditional shop-based DVD businesses sleepless nights. So how do you make sure the innovators stay innovative? In short, question everything:
"As a business it's six, seven years old and no one is sitting there going, 'we've got loads of people signing up for DVD deliveries, so video-on-demand, well, we'll just wait and see'.
"They did digital things very early and some of them didn't work. Now there's streaming and deals with games consoles, it's a business that's acting ahead. It's a business that has disruption at its core rather than incremental improvement."
Waldman is leading the business's push into delivering films digitally online and via connected devices, such as the Sony PS3, for which take-up is "far ahead of expectations". He's very relaxed about how consumers get their LoveFilm fix, as long as they somehow get a good service.
"We're saying that our website, which was once a sole outlet for a DVD by post business, is now a flagship store for a hybrid business... In-house tablet consumption, I suspect will be big - you really need a wifi connection. We found a real hit with our iPhone app which allows people to manage their rental list via mobile. We can see a future of people not using the website."
And how would he rate life in a startup, with a team of fewer than 10, instead of leading change in a business with hundreds and hundreds of staff seeking direction from him? "I wanted to get back to building things. Everything that got me excited about the digital world was about doing stuff and building stuff, and I'm knee-deep back into it."
Disclosure: I worked at paidContent:UK during 2008/9 as a reporter and I was brought in after the business was bought by GMG. I didn't report to or work directly with anyone at GMG at the time.