Clayton Christensen on the threat of innovation and transition to new technology
Patrick Smith @ TheMediaBriefing Experts' Blog - on 9/9/12
What we write about on TheMediaBriefing can be summed up in one word: disruption. The emergence of one industry or means of production (digital media) to very, very gradually replace an old one (say, newspapers) is something many of us face.
One of the hardest things to grasp is how those two worlds are different and how hard it is to manage the current, largely profitable business while also investing in the new one. This in a nutshell is what stares professional media business in the face.
Last week’s edition of BBC Radio 4′s excellent In Business series presented by Peter Day tackled this head on across several industries, from print-on-demand photobook services to collaborative car design and primary healthcare professionals (listen again via the iPlayer, you lucky UK-based licence fee payers).
I’d recommend that programme in its entirety but stop for a moment and listen to Clayton Christensen, Harvard Business School professor and author of The Innovator’s Dilemma.
He argues that in many industries established businesses are displaced by new technology and low cost startups. Even though their first products aren’t good enough to be taken seriously, startups eventually refine and quickly upgraded their products so to become genuine competitors.
And as Christensen puts it, the transition is the difficult bit for established players: “The challenge is that there isn’t a single silver bullet that solves this problem. The core problem is that the core business doesn’t just die overnight – you don’t get an email on Monday morning from the general manager saying, ‘Ladies and Gentlemen, last Friday we were disrupted.’
“The new business with the new technology emerges and becomes quite substantial even as the old technology and the old business model is still very strong. So you have to preside over two business models simultaneously and not hold the new to the standards of the old.”
Sound familiar? Looking at the tumultuous world of measurement, advertising buyers and planners still pay great attention to the old models of media metrics: BARB, RAJAR, ABC, National Readership Survey and so on. Online metrics play a role as digital budgets swell – total UK online adspend in 2012 is estimated to reach £4.78 billion in 2012, with display breaching the £1 billion mark for the first time (via IAB).
In the new world as in the old, what are the things we track? Reach. Not relevance or the success in attracting a target audience to use, often, a publisher’s digital products, but old-fashioned eyeballs. As Christensen outlines, this is judging the new technology by the values of the old.
As I wrote last week, the largest digital display advertising players in the US are all non-traditional publishers. The upstarts are winning as the incumbents protect their profitable, but time-limited, core business models.
Another Christensen point worth considering is: what makes someone buy a product? A person might have certain characteristics that make them likely to buy a newspaper like the New York Times, he says, such as being an academic, being aged 50-something and having kids.
But people don’t buy media products because of who they are, but what they want to do. “If you want to be successful you need to understand not just the characteristics but the job people need to do,” as Christensen puts it.
For B2B media as much as consumer media, what are the jobs that your readers and users want to get done? Are you in danger of allowing a low cost competitor fulfil than role better than you?
Image via Alex E. Proimos on Flickr, via a Creative Commons licence.