More crumbling in the crumbling print business model as New York Times and Philly papers announce hundreds of layoffs...
By Tom Foremski - September 20, 2005
. . . the sharp end of the disruption process
My recent post about the center of the media industry moving to Silicon Valley and nobody told New York drew some attention, especially from the excellent I Want Media web site run by New York based journalist Patrick Phillips.
In the post (fourth item) I said Google, Yahoo, Ebay are technology enabled media companies and they are hiring like crazy while New York's venerable media industry is not.
It was good timing given that the New York Times just announced 500 job cuts, and Knight Ridder said 100 newsroom jobs are going at the Philadelphia Inquirer and Philadelphia Daily News. Just the latest crumblings of a crumbling print business model.
It's not much fun being a journalist inside a crumbling business model. You are doing two or three jobs, everyone is in a bad mood, there are no pay raises, and on top of everything else, you are often expected to "blog" for your employer.
I tell my journalist friends that they should come and join me. It is far better to be on the side of the disrupting forces than to be on the sharp receiving end of the disruption.
It's true that I don't yet have much of a business model, but, I know that things can only get better on my side of the equation. Not much chance of things getting better on the print side of the business...
I'm not against print; it is just another distribution channel, as is is online. The problem is that if you have a business built on the old economics of the print advertising model, it can't be supported by today's advertising (print and online) ad revenues.
But if you start off from the lowest cost position (a blogger(s) in a bedroom :-) you will eventually inherit the earth. Because nobody can get in under your cost model (except for a blogger in a bedroom living free at their parent's house and using mom's computer!)
What worries me, however, is that online media business models are still being created and they cannot yet distinguish between good content and bad content. We need that virtuous cycle to be established so that the best content creators are rewarded and can re-invest in producing yet more great content.
Right now, the old media business models are in trouble and the new media business models are not yet in place.
What happens if we continue to lose the former and we are unable to create the latter?
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September 20, 2005 | Permalink | Comment | Category: MediaWatch | Subscribe to SVW
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Comments (2)
Its typical in publishing to obsess on costs - this business oscillates between fabulous expenses spent on nothing and miserly stinginess given for masterly achievement. But the instability in the business model is marketing and metrics - neither of which the bedroom blogger is likely to get, except by happy accident.
Traditional media is less interested in "trying something new" than simply faking "the new" because they don't want to add distractions to the cost structure. The upstarts, however, don't get traction regardless of effectiveness of content or cleverness in delivery, because revenues are too sporadic - you have to hope someone is in a positive mood when it hits their eyes.
So Tom, I understand the fear of disruption without remedy. Back in 1996, when I was with Tandem's Strategy & New Ventures, we faced the same problem with judging Internet opportunities - models were similarly unstable, but content in the end would be king. Eyeballs worked in the short term while you rushed together something durable.
We found that the worst instabilities came from the most established industries, in our case financial institutions. Too many went by the "old rules", and when you kicked them out of the way, things fell over fast and hard.
So, we concentrated on less established industries, where the old jealousies and envy didn't tear up the floor so much.
The moral - approach things from the Google or craigslist direction - minimalist, getting under the radar of existing interests, and get the audience lock first. Then refine the business model with partners, evolving long-term to take on a segment occupied by an existing giant. This is one answer to avoiding the thrash you mentioned. It worked before, and will work again.
Posted: September 21, 2005 1:53 PM
William, I couldn't agree more. We often talk about legacy IT systems and the burdens imposed upon a business, but it's legacy *everything* that burdens any organisation. And that's one of the reasons that a "new rules enterpise" --a concept I've described a few times here--will have signifcant competitive advantages. The new rules enterprise also includes the under the radar aspect you described, it stays private and you don't shout about what you are doing. You'll attract fewer competitors and they can't benchmark themselves against you either. Then you can acquire the established, older comanies. But probably all that is worth acquiring is the brand.
Posted: September 22, 2005 2:49 PM