As the newspaper industry wrestles with appropriate balance between our current business model and the dire need for disruptive innovation, we must be willing to forge ahead with new creations or innovations before we have the solid proof they will work and be profitable. This is true on both the advertising/circulation and content sides of our business. In other words, we must venture out onto the calculated and proverbial limb in order to survive the perfect storm we are facing at this time in our history.
That may not even be enough. The fact of the matter is that once we know something has an excellent chance of working, there is a very good chance we will already be too late. Our industry is notorious for slow movement. In today’s fast-moving innovation arena, by the time new technology and innovations hit the streets it's too late and we have already lost. The bottom-line, in order to be front and center, we must be willing to take the appropriate risks along with the lumps that come with those risks.
A recent New York Times article highlighted this when comparing Netflix with Blockbuster. I would add Redbox to the comparison or equation. Netflix has continually adjusted their business model and have tried things long before most would perceive the need to try these things. It goes without saying that many of their trials failed. Blockbuster, like many newspaper companies, failed to see the tidal wave approaching and they are paying for such foresight with “closed” signs throughout the United States. Due to that miscalculation on the part of Blockbuster, Netflix is left to battle the new upstart, RedBox, without Blockbuster providing any real competition. We could go on with similar comparisons in most every industry analyzed.
Much of this blog post is inspired by an article written by Mike Masnick at his “Entrepreneur Corner” blog where he outlined a few of the reasons companies succeed at innovation and likewise how many might fail when the going gets tough and disruptive innovation begins to cause discomfort:
- Misjudging rate of change: Newspaper companies tend downplay and misjudge the rate at which things are changing by believing they have more time than they really have. We know that most trends tend to develop slowly and the early models and technology are usually lacking in their ability to disrupt and create revenue. But something happens along the way: the trend slowly modifies the early shortcomings; it begins to pick-up steam; change develops more rapidly; finally it approaches and then exceeds the magical tipping point. Once you reach the tipping point, according to Masnick, if you aren’t on the bandwagon at this point, you are in grave danger of being rendered helpless in the next phase of the trend.
- Need to be hands-on: It is difficult to truly understand new technology, much less create it, unless you are an active participant. Newspapers have long taken the approach. We’ll watch it develop, and then we’ll hop on the train once the kinks are worked out. That might have worked in the past in the era of long developing and long-term trending phases of our industrial revolution. Yet in the age of the internet and modern technology, what is a trend today will be outdated in 24 months or less. If we don’t play in a hands-on way, we won’t be able to adequately compete with those whose deeper understanding allows them to maximize the disruptive tools!
- Be willing to cannibalize business model: Our newspaper culture and business climate must be pushed to the point where we are willing to cannibalize our existing business model. We have long thought that switching dollars is a waste of time, when in fact switching dollars to other programs is exactly what endears us to our advertisers and subscribers as they get new innovation while spending the same dollars. Advertisers and readers are spending as much or more than ever before, just not with us. Who wouldn’t love to have the same dollars we had only two or three years ago, only it is generated with the help of other platforms?
Mike goes on to say that this is the typical innovator’s dilemma. It explains why so few companies are able to survive the innovator's dilemma. Even if they know about it, they think they can wait. They think that they shouldn't invest heavily in those new technologies and new markets until there's a clear path to profitability, or a clear plan for how it “replaces” what's already there. The problem is that by the time they have the answers to those questions, it's too late.
Welcome to newspapers mentality 101!