Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, August 03, 2004

PVRBlog has a nice post about the integration race in the media industry - my comment:

...Nice post. Integration strategies are ways to exert more power over the market. After a market's been disrupted, and competition for revenues increases, integration races often start. Think about the aftermath of previous technological disruptions and you see integration strategies writ large.

Take a huge example from the early 20th century - cars - and think about how Alfred Sloan at GM used integration to exert massive power over an accelerating number of competitors (and suppliers) via scale and scope economies. So it's a natural response from a media industry that's under assault from nearly every angle.

I think the interesting question is - the costs of integration are pretty steep. First, you've gotta pay coordination costs to get the integration to work. Second, you've gotta make the right bet on the future value drivers (in this case, mass customization or not). Are these costs even worth it to begin with for the media industry? Put another way, is building scale and scope to grab more advertising dollars (and increase their efficiency) a smart move?

I think this is just another form of protecting decayed business models, and the media industry's digging itself an even deeper hole. In fact, AOLTW tried it a looong time ago, and it sucked even then. Forget integration; try some innovatio (for a change).

Uhhh...ok. Geekitude out.

-- umair // 11:39 AM // 0 comments


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