For traditional media companies, the online strategy is “substituting pennies for dollars,” says New York Daily News publisher Mort Zuckerman.
That’s a fair assessment, although some may argue their online strategy is adding pennies to dollars. Behind that are lots of economic forces at work: disintermediation, new disruptive players, the power of the network, the loss of competitive advantages (or monopoly advantages) and on and on. Make your own list of woe.
The response of newspapers, television stations/networks and those lumped together as “traditional mainstream media” over more than a dozen years has been innovation in small steps instead of game-changing.
During the time U.S. newspaper and television chains have been trying to develop workable online business models, lots of companies have sprung up that have developed either successful business models or huge audiences or both. Others, many others, have come and gone.
Here are some convenient reference points:
- Amazon was founded in 1994.
- Yahoo was founded in 1995.
- eBay was founded in 1995.
- Craigslist was started in 1995 and incorporated in 1999.
- Google was founded in 1998.
- Flickr was founded in 2002.
- MySpace was founded in 2003.
- Facebook was founded in 2004.
- YouTube was founded in 2005.
- Twitter was founded in 2006.
Zuckerman’s quote comes from a story in PaidContent of the notes released Friday of a UK House of Lord’s Communications Committee that is studying media ownership. The committee visited the U.S. in mid-September and took the pulse of mainstream media.
A consistent theme is Zuckerman’s “pennies for dollars” dilemma and what Scott Karp calls the 10 percent problem.
There may be some hopeful signs; Greg Sterling says newspapers have finally awakened five or more years late. Well, good news is relative.