Media and disruptive technology (or why change is so hard for entrenched companies)

What if we were to look at mainstream media's response to social media, such as blogging, thorugh the prism of disruptive technology?

This is an issue I've been mulling over since I heard Espen Andersen's talk on disruptive technologies, open source and mobile at Open Nordic conference in May: how does this apply to media?

It occurs to me that looking at media and social media through this prism must have been done before - but I haven't come across any such analysis, and, regardless of whether or not such analysis already exist, I think looking a the changing media landcape this way is a very useful thought experiment for trying to understand how big media companies tend to approach disruptive innovations, such as social media. Now, feel free to join me in this thought experiment, I'm just playing around with ideas here, but I think it's a very useful exercise.

What is a disruptive technology?
Espen quoted Clayton M.Christensen's book The Innovator's dillemma (which I haven't read) when describing disruptive technology:

1) your best customers don't want it,
2) it gives poorer performance,
3) if you did it you would loose money.

Core attribute: the incumbent market leader is the least suited to adopt it.

Two examples on disruptive technology listed in Wikipedia:
- Early desktop-publishing systems could not match high-end professional systems in either features or quality. Nevertheless, they lowered the cost of entry to the publishing business, and economies of scale eventually enabled them to match, and then surpass, the functionality of the older dedicated publishing systems.

- The music and movie industries see file-sharing as a very real threat to their livelihood. With technologies like Bittorrent becoming part of pop culture the current business model for these industries, selling physical units, has been completely shattered.

Seeing MSM/social media through this prism
I think sharing news via social media such as blogs, social networks, and microblogging sites also fit the bill here, because

1) your premium subscribers are unlikely to be the first to jump the ship

2) social media, like say blogging platforms and twitter, are often, especially in the first stage(s), less reliable than the big expensive content management systems mainstream news sites tend to run on/ it's cruder and gives less functionality

3) big MSM players are often hampered by their own size, prestige and institutional slowness (for lack of a better word) and utilising these tools effectively from an early stage is easier for a small nimble start-up with nothing to loose.

Also, according to Wikipedia:
"Disruptive technologies are not always disruptive to customers, and often take a long time before they are significantly disruptive to established companies. They are often difficult to recognize. Indeed, as Christensen points out and studies have shown, it is often entirely rational for incumbent companies to ignore disruptive innovations, since they compare so badly with existing technologies or products, and the deceptively small market available for a disruptive innovation is often very small compared to the market for the established technology. Even if a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing (and more profitable) technological approach."

The Entrenched Player's Dilemma
The latter point leads to The Entrenched Player's Dilemma, which is featured in Wikinomics, as the authors attempted to find out why corporations resisted crowd sourcing and mass collaboration.

"The problem with mature companies is that the very commercial success of their products increases their dependency on them. Making radical changes in the product's capabilities, underlying architecture or associated business models could cannibalize sales or lead to costly realignments of strategy and business infrastructure. It's as though popular and widely adopted products become ossified, hardened by the inherent incentives to build on their own success. The result is that entrenched industry players are generally not motivated to develop or deploy disruptive technologies."

I think we can even take this phenomenon down to the indivual level, rather than look at abstract entities such as companies: "People who have built up power and status in a particular specialty are scared of change that calls the knowledge and experience that got them there irrelevant," says Carrie Lisa Brown in this brilliant post (I'm not so interested in the Jarvis/Rosenbaum dustup described in the intro, but the last five paragraphs give a great description of some of the reasons change in the newsroom is difficult and often met with resistance)

There: I think this is a pretty useful prism for decribing why change is so difficult for many media companies. It's also interesting because describing the obstacles is often the first step towards finding solutions. Most notably, I can think of one media company that has been successful perhaps exactly because, at least to some extent, it has managed to break away from The Entrenched Player's Dillemma - I'll return to that in a separate post later.

Comments

[Piet Bakker]

On http://www.businessweek.com/chapter/christensen.htm
the first chapter of Christenson's book can be read.

[Kristine]

Thanks for the link. Perfect to look at during Christmas, when for once I might have some time to read and think:-)

[a_spod]

As an outsider, I get puzzled by this debate. Journalists will survive. That's a given. We're always gonna need you. ( *sigh* ;-) ) Amateur programmers haven't taken over the software industry—in fact the 'amateurs' are the professionals working in their spare time—and amateur reporters won't displace the professional media. (How would you fit in *your* work as a second job?) Of course, if MSM corporations don't adapt, then they’ll topple like disk drive manufacturers, and you'll end up working for a startup. But are you really invested in the corporations? And probably there are too many journalists to fund in the new model (A "journalism bubble"?) but there's no discussion of that. So what have I missed?

Incidentally, I was interviewed (for a job) by a CMS company that had been bought up by a local-media "conglomerate". And the boss pretty much concurred with what you've been saying: that the media didn't "get" Social Media. I forget his exact words, but it was something like "they're all still in top hats...living in the Victorian Era."

[Kristine]

Indeed: good point about MSM living in the Victorian age. At least some media execs seem to be doing exactly that. My point is not that I think journalism won't survive or that amateurs will take over, just that I'm frequently amazed how conservative and "set" many media industry folks are. This theory goes some way towards explaining why, but it's just some ideas I was playing around with - a useful thought experiment. But from here it's also interesting to look at how one can succeed by breaking away from this mentality.

[a_spod]

* Rolls around on the ground while pounding the floor and shouting: *

“But I wanna play around with your ideas too!” ;)

Anyway, temper tantrum over, is the MSM suffering from bog-standard management conservatism? Or are they more "conservative and \"set\"" than those from other industries? Would an MSM conglomerate take a different stratergy if the execs were replaced by those from a high-street retailer or a software house?

Another aside, I was chasing down an old IT “joke” about conservative management, and came up with this:

“Interviewees thought in terms of keeping their present roles for no more than two years...As a result they were only interested in results that could be created in a two year window.” [http://books.google.com/books?id=oO93wXNU2mMC&pg=PA210&lpg=PA210 - read down from chapter 11]

I don't know how much that might apply to MSM managers. But DigiDave's top picks all took more than two years to reach critical mass. (Fascinatingly Flickr grew out of a MMORPG called Game Neverending [http://www.ludicorp.com/news_list.php ])

Anyway, hopefully there's at least one more idea for you to play with. Keep well.

[Kristine]

Thanks: your comment made me smile and gave me something to think about, might return to these ideas later...