Here is an excerpt from an article written by Justin Fox for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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I’m sitting at DLD, a new-media conference hosted by an old media company (German magazine publisher Burda) in Munich. Arthur Sulzberger Jr. of the New York Times Co. and Hubert Burda of Burda are onstage talking about their experiences in a transformed media landscape. I want to feel useful, so I start tweeting about it. I am not alone. A trickle of tweets with the #DLD11 hashtag soon becomes a roaring river, to the point that blogger Paul Kedrosky, who’s not here, complains about it.
One of Sulzberger’s utterances — “a New York Times article is tweeted every four seconds” — is itself tweeted every 10 seconds for an hour or two.
“Maybe let’s get rid of word ‘publishing,’” Sulzberger suggests. “What can’t define the work we do is the method of distribution.” (In honor of Alfred Kahn, who died last month, I suggest we replace the word ‘publishing’ with ‘banana.’) Burda says his company (which has its roots in selling sewing patterns) makes pretty good money selling stuff online. “The biggest Enttäuschung — what’s the word for Enttäuschung? [it's disappointment] — is that ad revenues from online are so low, 10% of print.” But, on the plus side, “people like to blätter [look through actual pages].”
Then Burda and Sulzberger leave the stage and are replaced by a panel featuring a couple of media executives plus Google’s Nikesh Arora (who I guess is a media executive too), LinkedIn founder Reid Hoffman, and venture capitalist (and Facebook investor) Jim Breyer. Breyer stands out — both in the room and the Twitter echo chamber — by sounding like an Old Testament prophet (or at least like Clay Christensen):
“traditional media companies unless they radically change … will be obsolete 10 yrs from now;” “if you were starting media company today no way would TV, magazine, newspaper be part of it … except maybe for sports;” “the fact of the matter is, newspapers are dead,” “my firm now has twice as many partners in Beijing as in Palo Alto;” etc.
By this point, I’ve given up on the tweeting. The likes of Robert Scoble, Bill Gross and Henry Blodget are far quicker on the draw — and far better at sussing out what will fascinate their many followers on Twitter — than I am. It’s media disintermediation at work!
Lots of industries have been turned upside down by innovation over the years. But no industry has ever had its disruption chewed over in quite such exhaustive, exhausting detail as the media in the age of the internets. I’ve been listening to these discussions about my industry’s uncertain future for 12 or 13 years now. Can’t we just get finished being disrupted already and get on with our lives?
Well, no, it doesn’t quite work that way. The disruption just keeps on going. One fascinating twist is that while Arthur Sulzberger and Hubert Burda can still show up at (and in, Burda’s case, underwrite) conferences like this and talk of their minor new-media triumphs, there’s no sign of such earlier disrupters as Yahoo! or MySpace or Pointcast or whatever. Several people I’ve talked to here in Munich expressed surprise, in fact, that Facebook hasn’t seen its business model disrupted yet.
How do you survive such a seemingly unending series of waves? The by-now-standard, Christensen-inspired corporate response to disruptive innovation is to create a separate operation, with different incentives and structure than the parent organization, to exploit the innovation. I can’t off the top of my head think of any huge successes of that ilk in the media world, though (can you?).
I used to think investing in the innovators might be the smart way around, but the venture capital business, which in theory does just that, has been in the tank for a decade. In the midst of all the talk about dying media companies at DLD, entrepreneur Yossi Vardi asks VC Joe Schoendorf when the last venture capitalist would go out of business. A few will survive, Schoendorf says.
Breyer (who is Schoendorf’s partner at Accel, a VC firm that appears headed for survival) at one point does say that “content developers are better off than ever before.” That is, those who know how to create media — stuff that people want to read, watch, listen to, play with — can make it through all the turmoil. Nice to hear! But somehow I don’t think developing content about people talking about disruptions to the content industry is really the ticket to success. Maybe the real secret to thriving amid disruptive innovation is not to to think or talk about it too much.
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Justin Fox is editorial director of the Harvard Business Review Group and author of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street.