I believe that the secret formula for monetizing media is based on Techdirt’s CwF+RtB=profit. Connecting with Fans and giving them a Reason to Buy. Iron Maiden have known this for years as they had to connect with their fans instead of relying on radio promotion to get the word out.

Now that the traditional revenue channels are drying up because they don’t serve the market well, that fan connection seems to be working for Iron Maiden, where there latest CD is selling very well on CD and has limited unauthorized download.

Then again, when you consider the advice from the band’s manager on why they’re successful…

“Invest in the long term. Apply an image. Give the fans what they want. Tour and keep touring. Play the festival circuit. Embrace new technology. Be innovative. Be honest. Be original. Write good songs.”

…you realize that maybe the product from the MPAA studios and RIAA labels just isn’t that great any more.

I believe that the secret formula for monetizing media is based on Techdirt’s CwF+RtB=profit. Connecting with Fans and giving them a Reason to Buy. Iron Maiden have known this for years as they had to connect with their fans instead of relying on radio promotion to get the word out.

Now that the traditional revenue channels are drying up because they don’t serve the market well, that fan connection seems to be working for Iron Maiden, where there latest CD is selling very well on CD and has limited unauthorized download.

Then again, when you consider the advice from the band’s manager on why they’re successful…

“Invest in the long term. Apply an image. Give the fans what they want. Tour and keep touring. Play the festival circuit. Embrace new technology. Be innovative. Be honest. Be original. Write good songs.”

…you realize that maybe the product from the MPAA studios and RIAA labels just isn’t that great any more.

Technology changes business models. That’s a given. The problem is, the business models that are being disrupted are often very big businesses, with good profits and the company doesn’t want to disrupt those nice, regular, current revenue streams in order to accommodate a new one. The new revenue is (at least during these phases of disruption) very much below what they are now. No doubt you recall NBC CEO Jeff Zucker’s fear that that the Web will turn “analog dollars” into “digital pennies”.

The examples quoted include Netflix (who innovated and disrupted because they had no stores to protect) and Blockbuster (who had stores to protect; and Kodak who saw digital coming, new it was important but failed to act in time leading to massive layoff and factory closures.

The problem with waiting until you see a clear path forward to the sorts of profits that will be available in a disrupted industry, it’s almost always way too late for the disrupted to catch up. This is why disruption does not come from the major players in an industry, but rather from the small innovator who has no legacy to protect.

There are a few reasons for this:

1. Companies always misjudge the speed of trends, especially the rate of change. Things like digital revolutions start out slowly, and the quality seems bad. So companies in legacy businesses figure they have a long time to make the change. But the rate of change increases rapidly, especially once it “tips” and reaches a critical threshold. At that point, if you’re not fully invested in the new business, you’re, way, way, way behind.
2. It’s difficult to really understand the new technology/market unless you’re playing deeply in the space. This is the same thing we noted with people who claim that patents are necessary because once a good idea comes along others will just copy it. In many cases, that’s not possible. That’s because the truly innovative ideas require some real hands-on experience. Watching others do it is not the same thing.
3. It’s very difficult, culturally, to build up businesses that cannibalize your existing cash cows. The skill sets may be different, and people begin to recognize that these “new” people may be working on projects that replace the “old” people. That leads to a lot of resentment and makes it really difficult to actually hire the good new people — since they recognize they’re going to face those kinds of institutional restrictions. For them, it’s just easier to go to a “native” company that has bet entirely on the new offering.

Technology changes business models. That’s a given. The problem is, the business models that are being disrupted are often very big businesses, with good profits and the company doesn’t want to disrupt those nice, regular, current revenue streams in order to accommodate a new one. The new revenue is (at least during these phases of disruption) very much below what they are now. No doubt you recall NBC CEO Jeff Zucker’s fear that that the Web will turn “analog dollars” into “digital pennies”.

The examples quoted include Netflix (who innovated and disrupted because they had no stores to protect) and Blockbuster (who had stores to protect; and Kodak who saw digital coming, new it was important but failed to act in time leading to massive layoff and factory closures.

The problem with waiting until you see a clear path forward to the sorts of profits that will be available in a disrupted industry, it’s almost always way too late for the disrupted to catch up. This is why disruption does not come from the major players in an industry, but rather from the small innovator who has no legacy to protect.

There are a few reasons for this:

1. Companies always misjudge the speed of trends, especially the rate of change. Things like digital revolutions start out slowly, and the quality seems bad. So companies in legacy businesses figure they have a long time to make the change. But the rate of change increases rapidly, especially once it “tips” and reaches a critical threshold. At that point, if you’re not fully invested in the new business, you’re, way, way, way behind.
2. It’s difficult to really understand the new technology/market unless you’re playing deeply in the space. This is the same thing we noted with people who claim that patents are necessary because once a good idea comes along others will just copy it. In many cases, that’s not possible. That’s because the truly innovative ideas require some real hands-on experience. Watching others do it is not the same thing.
3. It’s very difficult, culturally, to build up businesses that cannibalize your existing cash cows. The skill sets may be different, and people begin to recognize that these “new” people may be working on projects that replace the “old” people. That leads to a lot of resentment and makes it really difficult to actually hire the good new people — since they recognize they’re going to face those kinds of institutional restrictions. For them, it’s just easier to go to a “native” company that has bet entirely on the new offering.

After 30 years of deindustrialization, Milwaukee is a shell of its former self and the Great Recession has left the city reeling. Into this mix on Monday, steps President Obama, here to celebrate Labor Day in a city where labor is on the rack.

read more

After 30 years of deindustrialization, Milwaukee is a shell of its former self and the Great Recession has left the city reeling. Into this mix on Monday, steps President Obama, here to celebrate Labor Day in a city where labor is on the rack.

read more