Content is no longer King. Distribution is no longer King. Money is King, and in an increasingly troubled economy this Emperor has no clothes.
So says the insanely smart and influential media guru Jack Myers in this great post:
Decisions impacting the long-term health and vitality of the media and advertising business are being impacted by executives who have little at stake beyond short-term financial goals. At the most critical juncture in the history of the advertising business, decisions are being dictated by financially-motivated Emperors who care little about their subjects. They care little about the long-term health of media or the marketers who depend on media for their success. They do not share the passion for this business that has been the hallmark of generations of industry leaders. As the economy continues its downward slide, pressures for short-term financial returns will intensify. Investors will demand cost-cutting. VCs will seek exits from underperforming assets. There is a danger that investors will suck media companies dry and then release them as if they are corporate pollutants for others to clean up. As competition and pressures mount for advertising and media-dependent companies, there are only two solutions – to further commoditize and be the low-cost provider or shift to a longer-term perspective that builds brand equity and relationships designed to generate profits when the economy and business rebound in 2011 and beyond.
Strife in the radio industry is no farther than the nearest balance sheet. I hear over and over that many stations and groups are unable or unwilling to spend even the smallest amount of money on clear investments in their future with clear future payouts. Since when did our industry lose sight of Business 101: Investment leads to rewards, and the smaller the risk the smaller the likely rewards.
The rules aren’t re-written simply because we wish them to be so.
And make no mistake: The current downturn facing this industry will not be solved by cost-cutting, no matter how much you sharpen those pencils.
The way out is through innovation and investment. The way out is to preach your vision to your investors and back up that vision with investment and action.
Apple could make cheaper iPods if they wanted. They could package them in brown paper bags if they wanted.
But they don’t want to.
And neither should you.
Apple doesn’t do this because it makes a lot of money; it makes a lot of money because it does this.
And so can you.