Paul Pilk­ing­ton from PWC, on what advert­isers want from news media, at the Sta­tion­ers’ 450th anniversary conference.

I did a panel hos­ted by Lord Iliffe who heads Yat­ten­don, with FT chair­man Sir David Bell and Tim Bowd­ler, CEO of John­ston Press.

Just caught up with Eli Noam’s piece on private equity in the FT.

Private equity has been in the ascend­ancy, buoyed by cheap debt, rising equity prices and high liquid­ity. In 2006, almost a quarter of all mer­gers and acquis­i­tions were fin­anced that way.

This trend has raised ques­tions. Many private equity deals are fuelled by a desire to flee closer reg­u­la­tion and dis­clos­ure require­ments of pub­lic com­pan­ies. This reduces the trans­par­ency of the eco­nomy, even as it may make some com­pan­ies more efficient.

There are addi­tional con­sid­er­a­tions for media com­pan­ies. On the pos­it­ive side, private equity deals often lead to a break-up of media con­glom­er­ates to reduce debt that paid for the acquis­i­tion. Thus, Clear Chan­nel, poster boy for media con­cen­tra­tion, is selling off almost half of its 1,100 radio stations.

On the neg­at­ive side, the same cost-cutting has impacts on news­rooms, film budgets and re-search and devel­op­ment. Unlike start-up ven­ture cap­ital, this kind of private equity is basic­ally con­ser­vat­ive in its search for cash flows to meet debt pay­ments and pos­i­tion the com­pany for resale. It is also short-term ori­ent­ated and unlikely to under­take big upgrades of com­mu­nic­a­tions infra­struc­ture that have long-term bene­fits for the economy.

Noam also wrote one of my favour­ite pieces on the Inter­net and demo­cracy:

…isn’t inform­a­tion good for demo­cracy? Free access to inform­a­tion is indeed help­ful, which is why the inter­net under­mines total­it­ari­an­ism. But it under­mines pretty much everything else, too, includ­ing demo­cracy. And the value of inform­a­tion to peace and har­mony tends to get over­blown. Civil war situ­ations are not typ­ic­ally based on a lack of inform­a­tion. Yet there is an endur­ing belief that if people “only knew,” for example by going online, they would become more tol­er­ant of each other. That is a nice thought, but is it based on his­tory? Hitler came to power in a repub­lic where polit­ical inform­a­tion and com­mu­nic­a­tion were plentiful.

It is easy to sub­scribe to romantic notions of a “golden age” of demo­cracy, of Athenian debates in front of an involved cit­izenry, and to believe that its return by elec­tronic means is nigh. A quick look in the rear-view mir­ror, to radio and then TV, is sober­ing. Here, too, the then new media were her­al­ded as har­bingers of a new and improved polit­ical dia­logue. But the real­ity of those media has been one of caco­phony, frag­ment­a­tion, increas­ing cost, and the declin­ing value of “hard” information.

It would be simplistic to deny that the inter­net can mobil­ise hard-to-reach groups and help them to express them­selves. It has unleashed much energy and cre­ativ­ity. Obvi­ously there will be shin­ing suc­cess stor­ies, but we should wary of extra­pol­at­ing. Large seg­ments of soci­ety are dis­en­chanted with a polit­ical sys­tem that is often unre­spons­ive, fre­quently affected by cam­paign con­tri­bu­tions and usu­ally slow. Many see the inter­net as the sil­ver bul­let that will change all that. Oth­ers cling to the image of the early inter­net — open and free — that cre­ated new forms of com­munity. They will be disappointed.