Why did Blockbuster fail against Netflix?
Why did Barnes & Noble stumble while Amazon thrived?
Harvard Business School professor Clayton Christensen’s focus on innovation in commercial enterprises led to his first book, “The Innovator’s Dilemma,” which articulated his theory of disruptive technology. In the book, he argues that existing franchises are fundamentally frozen to adapt to new disruptive or emerging technologies because they’re getting rich from existing systems.
Whereas Christensen’s theories have been applied and analyzed in the context of technology firms, it’s clear that media — and specifically content — companies are also faced with this phenomenon. Take, for example newspapers: many failed to react and adapt to the onset of the Internet and World Wide Web in the late 1990s. By the time some were forced to adjust, it was too late. Mind you, even those who dove in to the revolution head-on suffered.
Analogously, today you are seeing online media companies that have a text-centric DNA fail to adjust and adapt to online video, even though video clearly remains the fastest growing segment in the fastest growing medium that is online media.
Most publishers of text content (articles) are reaping the immediate benefits of search engine traffic, booming contextual search and display advertising revenue, so they fail to re-engineer their content producers or condition their users (readers, in this case) even though plenty of marketers are starting to demand video opportunities and inventory, and around the Web users are increasingly watching content.
To these publishers, video is seemingly as foreign as online publishing was to the newspapers. It’s not necessarily their fault. If a publisher has commanded a large audience of 5, 10 or 50 million unique readers per month, the reality is that many of these readers are less interested today in videos than they are in articles. Indeed, adding videos to their sites fail to generate the kind of audiences that articles command. For this reason, some are introducing videos contextually, playing videos automatically (with sound off) alongside their articles, hoping to introduce and condition their readers to become viewers.
By contrast, new video producers are popping up at a torrid rate, distributing content cheaply via YouTube and company and commanding viewers that far outstrip the number of video viewers on the article-centric publishers.
Over time, there is no guarantee that the video producers will generate more revenue than their article-based brethren, and lacking an in-house sales team, the reality is that many never will. But the new media producers of video content who can create an evergreen base of videos and build audiences over time and engage marketers should find themselves in the disruptor’s seat. A few may potentially even command more valuable enterprises than those who stick to the tried-and-tested formula of articles, images, and little else.
But the fact remains: publishers are in the driver’s seat. Those who can learn from history and avoid becoming the latest victim of the innovator’s dilemma will find themselves in the lead when the checkered flag is waved.