I've spent the better part of two weeks rummaging through all of my notes and late night, barely decipherable writings and sketches of the news and advertising media landscape. The result is the following slide presentation. I decided on this format because it forced me to be coherent and concise.
The danger is that it appears over-simplified. On the bright side it's more accessible and will hopefully provide a better foundation for discussion of points that need clarification and expansion.
There is one section in particular that is, for me, under-represented. That's organizational culture development. In my opinion traditional media companies are so out of touch with this it's killing them. Technology is fairly simple to imitate in a short time. So are practices that rely on understanding the market. Rallying the troops around a unified vision that they created, and one that will actually work, is a whole new ballgame for traditional media players. They don't know how to do it. It will take a huge commitment to learn at this late stage.
Unfortunately, the top-down mentality extends to faulty logic and behavior in other areas too. In the words of Dan Ariely, it's "predictably irrational", but very human nonetheless. There are five basic behaviors and mindsets that have contributed significantly to the current failing of traditional players to muster a proper business model.
- "Not invented here" thinking. Since we didn't create it, conceive it, plan for it, it must not be that valuable. We can watch it for awhile, but don't have to really do anything. Digital will happen when we say it will happen.
- Creaming the market, i.e. take the highest-profit part of the market. In other words, resting on laurels, wanting to be compensated for what they achieved in the past. Profit harvesting is another way to say it. Many publishers have told me they won't try a new idea if it doesn't cash flow something similar to their current product line.
- Emphasis on quality of the product or service from the perspective of producer instead of the consumer. Quality is always defined by the value derived by the consumer, not what the producer puts into it no matter the costs or effort. Consumers really don't care and aren't bothered to think about it.
- A corollary to "creaming" and quality is the concept of premium pricing. Traditional players have routinely raised prices over the past thirty years to maintain excessive profits and bloated budgets. (As a personal note, in 1987 I earned the equivalent in today's dollars $222K annually. I was in no way worth that much in a market that wasn't suffering from profit bloat derived from premium pricing). The fall from those inflated and unjustified price levels is very painful now as many are discovering.
- Traditional players have tried to maximize instead of optimize—trying to apply their products to everybody within reach. The product ends up serving no one really well.
Please feel free to shoot back comments, arguments, clarifications, anything that promotes getting something going.
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Very, very nicely done!
Posted by: bieber supra shoes | October 21, 2011 at 05:06 AM