• by Michael J. Wolf , August 15, 2011

It couldn't be a more exciting and remarkable time to be in the media business. Over the next couple of years, billions of media-growth dollars will be created through new experiences and new applications on new devices.

But the leaders of companies are concerned, and I think rightly so. They're witnessing the transformation of media-company revenues into technology-company revenues. More importantly, the real challenge is from the redefiners - a new generation of upstarts that can create a better user experience or a better way to market to consumers, and can scale quickly with new, cheap technologies. From LivingSocial, to Steam, to Zynga - these are examples of companies that have come out of nowhere to become major players in established industries.

Whatever you do - whether you produce films, create TV advertising, develop apps, edit magazines or publish Web sites - you have to expect that you could wake up tomorrow and find that someone else is in your marketplace in a way that you never expected. You have to plan for a world in which there will be a new device or a new application every couple of weeks. Frankly, you don't have a choice but to look at your business as someone else would and ask the question: "What would I do if I were a tech start-up? What could I do to redefine this business?"

And yet, of course, many companies have assets far beyond those of a start-up - deep content, established brands, long-term advertiser and consumer relationships, and, of course, access to capital.

That's why this issue of MEDIA is about redefining the media company. Building new businesses that will drive growth will require hacking the media company: working from the outside in, setting up virtual start-ups within the organization - new, agile organizations that can work independently from the legacy rules, hierarchy and compliance of a big company.

One of the latest examples of a business that was built by hacking an organization is Grantland. A team within ESPN created an entirely new business that is redefining sportswriting. It's the kind of Web site you would expect someone else to create to compete against ESPN - but this time it was built by a virtual start-up that can take advantage of the mothership's marketing muscle to reach an entirely new audience.

There are other examples to show that hacking an organization works - all created within the last couple of years, and all following the same philosophy: A company lets loose a small team that can act like a start-up and take advantage of technology to redefine the business.

The team at Hulu took the best from NBC and Fox to create the standard in a digital-video experience. My firm, Activate, helped Conde Nast create the team that redefined Gourmet into a digital experience that is part content, part social game - all the while redefining the concept of a magazine. Google acquired the team that built Android, keeping that group away from the constraints of the core, search business, and Android is now the fastest-growing mobile operating system, ahead of Apple's iOS.

Our clients are asking us to look around corners, while the rest of the people in their industries haven't even gotten to the end of the street. Where will they find the ideas for new businesses? You don't have to look too far to see what tech innovators are going to create. Recognizing new models in their early stages gives you time to move. Then a virtual start-up can build something even better, based on the product experiences that are working today - whether they're on a television set, a tablet or a mobile phone.

I have to admit that the idea of editing an entire issue of this magazine was a scary one. What was the best way to describe this transformational moment in the media business? As the pieces came in - Rich Ziade describing how he built a company around better reading experiences, Nick Denton discussing the Gawker redesign, David Kirkpatrick introducing the next wave of companies to watch for, Paul Ford on how advertisers need to redefine the ways they think about the Web, or my partner at Activate, Michele Anderson, explaining what it takes to create a virtual start-up, and many others - I realized that I had no reason to worry. There is a lively, active discussion going on everywhere - in large, established companies and in new, nimble firms - about the best way to adapt. And what I think you'll find in the pages of this issue are some new ways of seeing the problems we all face - and some new solutions.

I'm very upbeat about what media companies can do to win in this new era. Technologies we could only dream of a couple of years ago are bucking the conventional wisdom that taking a media brand into the digital realm makes content less valuable. Today, I believe it will make them ever-so-much more valuable. Above all, I strongly believe that hacking the organization - making real changes from within - can bring start-up-style innovation to big media-companies.