Thursday, July 23, 2009

"Great ideas alter the power balance in relationships. That's why great ideas are initially resisted." Hugh MacLeod

"Every really new idea looks crazy at first." Alfred North Whitehead

"Nothing is more dangerous than an idea, when you only have one idea." Emile-August Chartier

Today's image: Road to heaven by fd. Beautiful. Thank you for sharing.

Jeff Zucker is wrong

The NBCU chief is famously quoted as saying media companies were replacing "analog dollars with digital pennies" (which he later updated to the alliterative "digital dimes"). He's wrong.

Allow me to offer a passage from The Innovator's Dilemma by Clayton M. Christensen (Highly recommended, Amzn):

"Established firms' decisions to ignore technologies that do not address their customers' needs become fatal when two distinct trajectories interact. The first denies the performance demanded over time within a given value network, and the second traces the performance that technologists are able to provide within a given technological paradigm. The trajectory of performance improvement that technology is able to provide may have a distinctly different slope from the trajectory of performance improvement demanded in the system-of-use by downstream customers within any given value network. When the slopes of these two trajectories are similar, we expect the technology to remain relatively contained within its initial value network. But when the slopes differ, new technologies that are initially performance-competitive only within emerging or commercially remote value networks may migrate into other networks, providing a vehicle for innovators in new networks to attack established ones."

"Entrant firms have an attacker's advantage over established firms in those innovations - generally new product architectures involving little new technology per se - that disrupt or redefine the level, rate and direction of progress in an established technological trajectory. This is so because such technologies generate no value within the established network. The only way established firms can lead in commercializing such technologies is to enter the value network in which they create value. As Richard Tedlow noted in his history of retailing in America (in which supermarkets and discount retailing play the role of disruptive technologies), 'the most formidable barrier the established firms faced is that they did not want to do this.'"

Broadcasters have been in this movie before. Whether it was the emergence of FM radio or the not on the radar unaffiliated UHF station that suddenly gained shelf space parity when the advent of CATV carriage killed the need for that goofy second antenna. The established, successful value networks of AM radio and VHF TV worked to create and empower management that came to be genetically blind. Taking the wayback machine to 1965 one could fairly say broadcasters were not willing to trade AM dollars for FM pennies, nor were they interested whatsoever in the trade of VHF dollars for UHF pennies. Other examples are within easy reach. The majority of broadcasters passed on early CATV opportunities, finding the front end much too capital intensive and the notion of folks "paying" for TV to be patently ridiculous. Broadcasters are not alone here. It was not that long ago that my fellow cable MSOs generally agreed that PPV was nothing more than a minor niche play limited to the one-off (the occasional major prize fight), accepted VOD as nothing but pie in the sky, and reasoned that customers having their own dish would forever be limited to unwired rural areas never to be a competitive threat within the MSO's franchised territory.

The emerging player is too often discounted by the incumbent mindset, it was ever thus. Modern media history is replete with "overnight" success stories. New markets and competitive space created out of nothing. Ryan Schreiber the multimedia mogul that reinvented music reviews and crushed the music magazine/fanzine incumbents from the basement of his parents' Minneapolis home. TMZ changing the game in the celebrity gossip food chain, starting as an online brand and moving into syndi-TV. Interesting to note, TMZ was the first to flash the death of Michael Jackson.

Zucker's pennies/dimes argument is nothing new, what it represents is the dilemma, the thesis written about in Christensen's very well done writing. Tom Webster, digerati lead-in-residence at Edison Research, writes about social media being a low cost high reward opportunity, in his words it's a "no-brainer" and he's right. (Life Rewards Action - The Infinite Dial).

The first step in any effective 2009 rehab program for broadcasters is a change in the working vocabulary. From a daily usage of "BUT", the too frequently thrown "OR" to an adoption of and preference for that other more opportunity-laden and richer conjunction "AND"

Mind the counsel of Dr. H.S. Thompson "Buy the ticket, take the ride."

You must choose to play, or not. Wait no longer for the confirmation that comes in the form of diminishing returns. Come to the understanding that money is a trailing variable. Game on.

All that's important is what's coming out of the speakers
and on the screen(s), everything else is a footnote

Bonus: John Furrier is now blogging with contributors at The SiliconANGLE. His title page marked "Computer Science meets Social Science." Bonus 2: Trope is the new Meme.

Random note of interest: Last time the U.S. government requested that broadcast media standby and stand ready to broadcast emergency messages to the public: 1962. Cuban missile crisis. Request made via CONELRAD (Key Station System). Last time the U.S. government requested an online service not go down for scheduled maintenance: 2009. Twitter during the Iran election protests.

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