Old media needs to embrace change

By March 8, 2010Content

There was a good article on Techcrunch on Saturday covering an interview Erick Schonfeld had with Marc Andreessen.  In a reference to explorers landing in Mexico and burning their boats so looking forward was their only option the post was titled: Andreessen’s Advice To Old Media: “Burn The Boats”.

He makes an excellent contrast between the way technology companies embrace change whilst old media companies fight it.

On technology companies embracing change:

The one thing technology companies do really well is deal with constant disruption. “Microsoft is going through this right now,” he points out, “Ballmer is not complaining about it.” He’s tackling it head on. So did Intel when Andy Grove gutted it to shift from memory chips to microprocessors.

On old media fighting change:

Andreessen asked me if TechCrunch is working on an iPad app or planning on putting up a paywall. I gave him a blank stare. He laughed and noted that none of the newer Web publications (he’s an investor in the Business Insider) are either. “”All the new companies are not spending a nanosecond on the iPad or thinking of ways to charge for content. The older companies, that is all they are thinking about.”

And if you are wondering about the impact of the iPad, read this:

[Andreessen] points out …. No matter how many iPads the Apple sells, the Web will always be the bigger market. “There are 2 billion people on the Web,” he says. “The iPad will be a huge success if it sells 5 million units.”

Old media’s excitement about the iPad is symptomatic of an industry in existential crisis.  The smart thing in every company is to go where the customers are, i.e. the open web, rather than where your business model might work better, yet that isn’t their approach.  Until/unless the old guard learns to embrace change and think about what the consumer wants rather than how they can preserve their businesses they continue to lose out to new media businesses like Techcrunch.

Note – this is not a post about free vs paid content, an argument which I think is more finely balanced that comes across in Andreessen’s TC interview.  Right now my view is that it is difficult to come down emphatically on either side of this debate and I expect to see both more companies making free content pay as a business model and more companies innovating and successfully persuading consumers to pay.

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  • “Old media’s excitement about the iPad is symptomatic of an industry in existential crisis.” Holding onto everything which promises the same type of control over their domain and content. But by handing over their content into the iPad/Steve Jobs channel, they don't have THAT much control. And who knows what the App can. I bet I won't be able to push links and citations to Tumblr/Delicious & Co. as easy as I am able to do here (Firefox).

    True words aren’t beautiful, beautiful words aren’t true.

    Here is an annotated riff on the situation (http://michaeljung.tumblr.com/post/424728127/th…)

    Here is another opinion I have (http://michaeljung.tumblr.com/post/422544296/fu
    “[T]he time where you can reap huge profits (being able to build an empire/conglomerate) is over. That is pure economics. Thus, it -the competition- drives down your margin as you compete for customers with basically the same good (the same story that Michael Jackson died). The end of the story will be, (1) that this process (or transition effects) will plateau … sometime, (2) distinction between competitors will be the overall brand and product (talent, track record, quality), and (3) price differences will be narrow for general news.

    Basically, the business of publishing ‘what happened in the world today’, becomes a near-commodity, a digital commodity (laws of copy & paste, least ownership, creativity driven, distribution not controllable etc).”

    Here is another annotation about control (http://michaeljung.tumblr.com/post/271524673/fi…).

    Saving the status quo of anno 1995 is impossible. They can't save the printing presses made of steel. The printing press of tomorrow is made of fiber optics. Period.

    “We think about things differently when we are trying to invent something, instead of trying to save it.” (http://michaeljung.tumblr.com/post/255242941/we…)

    I think I got my point across 😉
    Keep on the good work.
    MJ.

    PS: Added you to my VC list and first to connect when I have a prototype/mock-up of my business to support the likes of NYTimes and Bloggers at the same time. Connecting publishers with readers vice versa.

  • danbloom
  • danbloom

    it's a noiveltsong about print newspsapers i call em snailpapers

    http://www.youtube.com/watch?v=BnZKIk1Krp8

  • danbloom

    maybe blog on my snailpaper song, pro or con, Carl BErnsetien saw it heard it said to me BRAVO, Diana McCellan at old Wash Star calls it “the world's first musical obit for newspapers”

    http://www.youtube.com/watch?v=BnZKIk1Krp8

  • The desire of old media to continue with stagnant business models is the same story being played out in the music industry
    http://bit.ly/bgFle3
    maybe burning the boats is an extreme (!) but the flexibility to adjust to new technological developments would be a desired given in the industry

  • I've recently been following the iPad craze. While I don't think that the iPad will save print I do think it will help transition print into the next wave of digital communication. I just heard an NPR article that said that as of May 3 Apple has sold a startling One Million iPads! This happened in only the first 28 days! They indicated that now 1 out of 300 Americans own the iPad and are showing it off to their friends. Now Apple’s App store has 12 million apps versus the 1 million they had at the April launch. These stats are incredible. It’s obvious that the iPad is taking off. The wildest thing that struck me is that this data only refers to the WiFi versions of the iPad; the 3G version was just released this past Friday.

  • Thanks Jeremy. Those stats are awesome. The Apple ecosystem is starting to look like it might be the only show in town for some time to come. I hope not.