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Friday, September 08, 2006

Industry Note: Media vs Innovation

A question: how often have you heard the phrase "media innovation"?

This is a point I've been making to clients recently.

You've read enormous numbers of articles (listened to presentations, etc) about strategies, business models, tectonic shifts...but the words "media innovation" are as elusive as the Yeti.


This is the heart of the very big problems the media industry faces. It's been so protected for so long, it's forgotten not just how to innovate - but it's even forgotten the idea of innovating.

Though many people may talk about strategies and business models (etc), unless they approach these from the perspective of innovation - radical change - little insight can result; because these endless discussion all hinge on the same tired, obsolete assumptions.

What we must have is innovation - and it must stop being a dirty word; it must be a word that is discussed from boardrooms to newsrooms.

-- umair // 3:10 PM //


It is amazing that in a Schumpeterian industry like media and particularly television industry where companies are supposed to operate in a "gale of creative destruction" and innovation rules when it comes to competition, that it is just is not happening.

With the television industry there is no longer is any disruptive innovation or innovation of any sort. Platforms, broadcasters and content providers are half heartedly trying to get to grips with technology that their audiences and consumers have been using for some time. Whilst the companies themselves spend too much effort worrying over their content and what they have been doing rather than increasing the distribution spectrum so their audiences could be receiving the content.

The media industry has lead a sheltered life and is fast approaching a stage where it will face unlimited competition in an open spectrum world and the only thing it has to stand on is its long tail. It needs to start innovating and fast before it forgets what the game is.
// Anonymous Charlie Young // 4:52 PM

I think this question might be unfair. Media are parasitic on particular kinds of communication infrastructure, whether that's radio, TV or printing presses.

What the media industry innovate on top of those is particular *formats* like 2 inch books with a couple of short-stories for a dollar, or reality TV.

Complaining that the media companies aren't challenging their communication substrate may be a bit like complaining that Microsoft don't design better chips. MS generally leave that to AMD and Intel.

Equally, Murdoch is going to leave inventing actual new communication media to someone else, and then just try to innovate different formats on top of that.

Nah ... maybe I'm just wrong. The paradigm example of a genuine new killer format on top of existing technology, is blogging. And that came from the tech. industry.

Of course, Dave Winer goes round these days claiming he's in the media not the tech. business, which may be a fair assessment given his central role in most of the important format innovations of the last 10 years.

OK, so maybe I agree with your point that the media don't know how to innovate. But I'm not sure it's about "protected". What's happening to the media is so *different* and disruptive that the existing people just can't get into it. Needs entirely different fundamental assumptions about what value is and how it's organized.

We're just going to have to wait for them to all die off.

One thing I'm pretty convinced of. You can't invent new uses of tech. without understanding tech. Whoever is going to be doing the innovation will still need one foot in the software or engineering worlds.
// Blogger phil jones // 4:38 AM


Steve Jobs seems perfectly positioned to seive the opportunity of media innovation. Yet to read Umair, he lacks any strategic understanding of what direction to go. Strange.

BTW, I think I have a new description of the iTunes Music Store. While MySpace is a new music market/community, iTMS is just a digital monthly CD club. All it really offers is greater convenience and some cost savings, just like those CD clubs. :)
// Anonymous alcatholic // 9:55 AM

Oh, I forgot it also offers a new marketing channel for the labels and some mild consumer lockin, again just like those CD clubs.

Anyway my lame attempt at insight. :)
// Anonymous alcatholic // 9:58 AM

Alcatholic. Agreed. Jobs and Apple should have been leaders.

I think the problem is that Apple are too indebted to "creatives" where "creative" is actually the traditional mindset thinks in broadcast terms.

Apple haven't managed to rethink *design* as a dialogue with the community. If they did, they'd probably start something like Threadless for user-created iPod accessories.
// Blogger phil jones // 3:00 PM

Hi Charlie,

I couldn't agree more.


Remember there are many diff kinds of innovation. You are thinking about technological innovation - but the real returns (to firms) are historically in strategic and other kinds of innovation.


Jobs has had one great service innovation - iTunes. What's he done with valuable resource, from a strategic pov, is almost nil.

Your Myspace comparison is right on. Where do the returns go in a world where music (finally) gets viral, a la Snocap + Myspace? Where do marketing dollars go?


You have nailed the problem - though Apple is seen as teh creative, in fact, it's only real creativity is at the design level (vs b-models, strategy, etc). And this is the Jobs effect - creative (instead of the usual financial) myopia.

Thx for the comments guys, I enjoyed reading them.
// Blogger umair // 10:40 PM

Phil's kinda right on this one. Asking the media industry to innovate media is like asking the tail to wag the dog. But "parasitic" is definitely the wrong description. It's called adding value.

- A DVD without any content is a shiny, but otherwise almst utterly worthless piece of plastic (which a couple of centuries ago might have gotten you a piece of Manhattan, but that's a different story).
- Telephony is value added electricty, as one ConEd (?) exec used to explain. Low voltage, but high margin. And as talk gets cheaper and cheaper, lightening up the dark fiber with other media might make sense.

Good old media worked pretty good with good old hardware:
- limited supplies like scarce spectrum made broadcasting highly profitable
- format follows functionality: it's called radio if you can listen to it on a, well, radio
- ...

The last to major switches went perfectly well. CD and DVD generated billions for the media hard- and software industry.
But currently, the situation's a bit messy. IT and telcos are changing some important parts of the equation.

And so, finally, I have to agree with Udair. If Big Media wants to survive and prosper, they have to institutionalize innovative processes which run a bit deeper than scouting the world for the next Big Brother-spin off.
// Anonymous hubert // 6:24 PM
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