Media houses do not need to re-invent their products, they need to re-invent themselves

Disney’s Peter Pan “All of this has happened before and all of it will happen again.”

We live in an infinitely digital world where everything we surround ourselves with is sparkly. Most people therefore have an aversion to look at history to get some guiding principles as to what is really happening in the world today.

And watching dying business models in our world struggling for the right to survive is quite amazing. If any of these captains of industries (like Rupert Murdoch) look to history they will find a grave yard of giants. My bone of contention is the media industry who is struggling to remain relevant, not only relevant but they are fighting for their livelihood, their right to exist in this world that has experienced a major paradigm shift.

About 110 years ago in New York City there was a very very rich organization. They were known as the Hansom Cab Company and had since their incorporation in 1868 stood for all horse drawn taxis in the Big Apple. They were intrinsic to the survival of the city despite being the most environmentally unfriendly city vehicle ever created. There were places where the piles of horse manure lay up to 12 meters high, rats lived of the crap, flies and diseases were everywhere. And they ruled the city with such power that the Hansom Cab company extended their operations to the UK and France. A true multinational.

Their product remained largely the same, a horse drawn cab ferrying people from point a to b for a fare. Yes they upgraded their product now and then like improved cart designs, advertising posters on the carts, horses studded for city environments. But when you have a monopoly you tend to innovate on the wrong things.

So by 1898 some bright spark saw this fad being developed in Europe called the car and being an entrepreneur (Electric Vehicle Company) he immediately invested and  bought over 100 electric cars to NYC to break the monopoly. But these Satan’s Mechanical Beasts did not really take off and eventually the company that imported them went bankrupt. But something had happened. This threat to their core business got the Hansom Cab Company to innovate like never before. Price fares dropped, the company volunteered to clean the dung off the streets they repainted, re upholstered the cabs. They imported new horses that could last longer on less food. In short, by the end the horse drawn carriage era the taxi cabs on the streets of New York was the pinnacle of evolution for their product category! There was nothing better.

The only problem was that the technology, the business model was defunct and no matter how fantastic the product was the time of the car had come. By 1907 there was a respite for the horse companies and they falsely believed they won against the electric vehicles because superior product innovation. But this was a short respite. To quote Wikipedia  “Harry N. Allen, incensed after being charged five dollars ($113.66 in 2010) for a journey of 0.75 miles (1.21 km), decided “to start a [taxicab] service in New York and charge so-much per mile.” Later that year he imported 65 gasoline-powered cars from France and began the New York Taxicab Company. The cabs were originally painted red and green, but Allen repainted them all yellow to be visible from a distance. By 1908 the New York Taxicab Company was running 700 taxicabs”

The fall of the horse drawn carriage was drawn out for a decade, from 1898 until 1909 but when the new technology got refined it was a bloody massacre that took a mere 12 months.

The media industry is going the same way. There has been a distinct paradigm shift in consumer’s media consumption. Heck even the concept of media is up for debate. I believe that the current media products released onto the market are the best ever. From quality to quantity there is a golden age for content. The only problem is the market has shifted.

Media houses do not need to re-invent their products, they need to re-invent themselves.