Old media is still having trouble dealing with the new era. That was the strongest message at the Argyle Executive Forum on Leadership in Media in New York Wednesday.  A stellar group of media executives mostly associated with “old media” lamented the end of the days of fat profits and the lack of a clear new business model in the age of the Internet.

 
Norman Pearlstine of the Carlyle Group told attendees that newspapers enjoyed a brief period of monopoly that attracted investors and convinced many families to take their businesses public. However, he said, for most of its history, the newspaper business did not enjoy the double-digit margins that characterized the 1980s and 1990s. “At the end of the 19th century there were 29 newspapers in Chicago,” he said.

Mr. Pearlstine said that profits soared when afternoon papers died off in the 1960s and 1970s as commuting and reading habits changed. Nowadays most cities have one newspaper, maybe  two, often operating under an agreement that lets them share resources like a printing plant.

But Mr. Pearlstine, a former editor-in-chief of Time Inc. and former executive editor of The Wall Street Journal, said he saw more hope in magazines, many of which continue to thrive. He noted that in a recent year, Time Inc.’s People magazine alone provided as much as 40 percent of the entire magazine division’s EBITDA. He said that new magazines continue to thrive in the UK, where five of the top ten circulation winners are less than 10 years old. He said one reason is that Brits (and most other Europeans as well) buy 90 percent of their magazines from newsstands, while in the U.S. most magazines are sold by subscription, making startup costs and test runs far more expensive.

Gordon Crovitz, a former publisher of The Wall Street Journal, reiterated a theme heard throughout the morning session that while readers were moving to the web, the ad revenues being generated online were just a fraction of what came out of the old media models. That raises a question bloggers and advocates of citizen journalism are loathe to answer. Who will pay for the investigative and international reporting that feeds the blogs and the “fair use” sites like Google?

Thomas Rubin, chief counsel for intellectual strategy at Microsoft, says nothing less than a change of attitude will create an environment where artists and producers are paid fairly for their work. Mr. Rubin dismissed web advocates who say content must be free. Citing examples of unhappiness with Internet distribution from web celebrity musician Robert Rich to Radiohead, Mr. Rubin said, “The facts suggest that the new ecosystem as presently configured is in fact, not able to adequately sustain grassroots creators.”

Mr. Rubin argues that Internet players must become stewards of intellectual content, “acting for the interests of the ecosystem as a whole rather than just our own narrow businesses.” In addition to supporting initiatives like Creative Commons, the non-profit licensing effort, he urged attendees to enforce copyright and find ways to reward creators of content or much of that content will dry up.

Playboy chairman and CEO Christie Hefner presented the most upbeat example of an old media company that has made the adjustment. Ms. Hefner says Playboy was the first magazine to go onto the Internet and that her company has worked consistently to keep up with technological change. Pointing to Playboy’s investments in television, Internet and now mobile distribution, she says it has enabled her company to keep the 50-year-old brand fresh and reach new generations of younger men and women.