Monday, January 09, 2006
Media 2.0 vs Media 1.0, pt 1 - Strategy Decay at the Core
What!! Are you kidding? No, really - you must be kidding. Wait - you're not kidding? Oh..uh...
AdAge: Time Inc's Ann Moore: Core Competency is Editing
Probably the biggest reason media sucks is that it doesn't even know it sucks. Now, I don't mean that in the way you probably think I do.
Certainly, the media industry is fully of brainy, even intellectual people who can quote Baudrillard and snigger and tell you that they know media sucks. That's not this problem, that's another problem (a kind of systemic inertia, or what we might simply call a lack of internal balls), which we'll discuss later.
I mean that many in the industry think that it can go on still sucking: they think that their strategy decay is just a minor misstep; that there are no substitutes for the resources, skills, and activities that go into media. Like, clearly, Ann Moore does.
The point I'm trying to make is that the industry doesn't - and rarely has - thought strategically. Right now, the assumption is that local monopoly effects are still enough to insulate media from strategy decay. In fact, at the limit, that means that the way for media to make more $$$ is for it to suck more - this is Clear Channel, Fox, etc, etc.
Now, that was true even five years ago. Today, the rise of the edge has made that assumption lethally obsolete. But because the industry assumes that it can go on sucking, they don't see the universe of value at the edge exploding. You'd be surprised how many media heads have no idea what Last.fm or Memeorandum are (lots).
What this is all really about is the decay of the core. It's trivial to note if editing is your core competence, you are, how can I say this nicely, sooooo dead (and it will be painful death, too). That's because editing at the edge - reconstruction - is orders of magnitude cheaper and better: it's a discontinuous jump in value creation.
You may have a core competence - editing - that creates core products - newspapers - but today you're possibly better off not having one. That's because you might, like Time, fall into a competence trap: your competence becomes a rigidity - it's the only thing you really know how to, so you keep investing in it; even when the market's collapsed it's value completely.
What media players - and players across consumers industries - need, in a world where value shifts to the edge, are, unsurprisingly, edge competencies: ways to leverage the edge.
Time don't need a core competence in editing; it needs an edge competence in something...anything. Time has to - has to - leverage the edge, because that's where the value creation has shifted. To focus on the core is to double down - to go from strategy decay to competence trap.
Most industries/companies have little in the way of true strategic thinking.