Since January of this year we’ve seen entire markets collapse with much of the blame being put on the economy. Automobile manufactures going into bankruptcy. Banks and Wall Street needing to be bailed out. Newspapers dying, Television viewing in the decline and major publishing and media entities are struggle to survive.
John Fine writes in Business Week: Time Inc.’s ad revenues shrank 30% in this year’s first quarter, compared with the year previous, after falling 20% in the last three months of ’08. Time Warner’s finance chief, John Martin saying at an investor conference that “today we have no intention and no current thinking of doing anything with the publishing business…. It’s really hard to make a macro call on the state of that business in the midst of this cyclical downturn” for magazines.
Henry Blodget writes in AdAge: The traditional TV industry — cable companies, networks and broadcasters — is where the newspaper industry was about five years ago: in denial.
Specifically, the TV industry’s attitude is the same as the newspaper industry’s attitude was circa 2002 to 2003: Stop calling us dinosaurs. We get digital; we’re growing our digital businesses; we’re investing in digital platforms; people still recall ads even when they fast-forward through them on DVRs; there’s no substitute for TV ads. And traditional TV isn’t going away: Just look at our revenue and profits!
After saying all this same stuff for years, the newspaper industry figured out the hard way that, eventually, reality intrudes. You can’t stuff the genie back in the bottle. And in the next five to 10 years, the TV industry will figure this out, too.
There are hundreds of other examples of old industry models collapsing and yet the common response by industry leaders is to blame the economy or the internet which are one in the same.
If It’s Not The Economy Then What?
What we are now witnessing are the “results” of revolutionary shifts in market factors that are now manifesting themselves in economic terms. The “shifts” didn’t just happen rather they have been increasing in momentum every year for the last 20 years. 2009 simply became the tipping point of changes created by technology. While the marketplace has been seeking and creating perpetual innovation the suppliers have been a sleep at the wheel. The “result” of industry leaders being a sleep at the wheel now equals $1 million of debt per family in the United States. How do you like those kind of results?
Heads In or Out of The “Cloud”?
Blaming the economy for your bad results is like telling your Board we’re bankrupt because the customer was wrong. You can blame little old me for not buying but little old me has left your market and joined a different market. I am part of a crowd that communicates in a cloud. The cloud is a collaborative space of massive communications seeking and sharing innovation. While our “cloud” is bright and exciting your cloud is “dark and frightful”. The traditional media paints perpetual gloom and doom in your “cloud” and you use it as an excuse not to “shift” to our “cloud”. Simply put industry leaders have their head in the wrong “cloud”. Subsequently Big Brother had to bail them out to avoid a total economic collaspe.
An economy is the result of market forces. The cause and effect of market forces is innovation. Innovation is spawned by the application of knowledge. Knowledge applied is the result of communications. Communications is the economy. Today’s economic results will be improved by perpetual innovation that comes from the crowds communicating in a productive and prosperous cloud. Get it?
What say you?