What are the chances that every decision you make is based on a misunderstanding of what is happening in the media industry? If we look at the history of the last 15 years, there is some evidence to support that view.
National newspaper circulations have fallen off a cliff. Regional newspapers have destroyed up to 90 percent of their value, business media companies have been zombified by debt, seen their print magazines decimated or both. TV audiences have been fragmented, and even digital ad rates seem to get smaller very year. It hasn’t gone well has it?
What, you must ask yourself, is the cause of all this? Well, surely, it must be the internet. So if the internet causes the problem, then we must face it head on and get digital. We will build state of the art web sites, and apps. We’ll keep busy with each new innovation and cling it to like a drowning man hanging on to the edge of a lifebelt with frozen fingers
Well maybe. And certainly we need to be doing these things to create new compelling ways to engage with users. But what if these things are nothing more than a life belt? A temporary relief from inevitable death and decline. Time is certainly running out as Jasper Jackson pointed out in his forecast of future newspaper sales.
And what if all this grabbing at lifebelts is failing to deal with the real issue. Media is drowning in a cold sea and we need rescuing. How did we get here? What should we do about it and was it really all down to the internet at all?
In business as in life, we tend to base our assumptions on the most recently received information rather than looking at the whole picture. What would change in our strategic thinking if we looked at the whole picture, without starting from the premise that it’s the internet that caused all this?
Finding strategy in mathematics
Let me start by persuading you of the power of Bayesian logic. Stay with me – it’s worth it. Imagine I lay out these five cups in front of you. I tell you that under one of the cups I have hidden a pound coin. Your task is to select at random one of the cups, hoping to pick the one with coin.
Made your choice? Good. Now I am going to remove three of the remaining four cups leaving only two, one of which contains the pound coin.
At this point a friend arrives to join you. My Bayesian question for you is this: tell your friend that one of the cups contains a pound coin, and ask him whether it would be better to stick with the cup you picked, or switch to the other one.
Your friend will likely say, “It doesn’t matter. There are two cups, one coin. It’s a fifty-fifty call.”
But it’s not. Had your friend understood all that gone before, rather than basing his judgement on what he saw in front of him, he would have come to a different conclusion.
– The first cup you picked had a 1/5 chance of containing the coin.
– Whatever happens next you can’t change the odds of the cup you picked at the beginning of the exercise.
– The other cup I gave you must only have a 1/2 chance of containing the coin. So you should switch cups every time – the odds are always going to be better.
The point here is that seeing the whole context of a probability decision can open up different solutions than when we only review what has just immediately happened.
Let’s think about this now within thjaspe context of media strategy. And let’s forget about the internet for a moment – I was writing in 1981 about the demise of local newspapers, long before the invention of the World Wide Web:
In 1995 there were 79 daily morning papers in the UK. By 1995, the year before we started even thinking about digital disruption, that had fallen to 18. As this chart for total UK newspaper circulation from 1951 to 1994 shows, the decline is long term and endemic:
(Stats via Press Reference)
Nothing to do with the internet then. It is probably true that the arrival of digital consumption has accelerated a trend that had begun long before, but it was disguised by mergers, launches, closures and artificially high advertising revenues.
So, how can we as an industry take in the whole view and switch our strategy? Perhaps the reason we have failed to make the internet model work despite more than 15 years of effort is because of all the rotten DNA of the print-only world. Those inherent flaws are now destroying our aptitude for building truly successful businesses in the digital world.
What the internet has done is laid bare the business model deficiencies that were always there and now we have to fix them.
