If you're a Hollywood movie studio, you have grown accustomed to a big theatrical release and multi-millions in opening weekend box office, then super-profitable DVD releases, licensing, and the balance sheet joys of turning a hit movie into a multi-hit franchise.
Your deepest fear is being undone by channels of distribution or consumer behaviors which disable the way this world works.
Your response can be one of two things:
Either you can cut to shreds your production expenses, produce fewer movies, and drop them on-demand or straight to DVD or iTunes where they can, perhaps, at least make their money back.
Or you can add value to the experience which drives the revenue bus in the first place by crafting ever more elaborate tent-pole productions and enhancing the in-theater experience with IMAX or 3-D.
As anyone who has been to a 3-D or IMAX movie knows, not only is the experience greater but it is also much more expensive, i.e., more "valuable."
While it's true that Hollywood is following both strategies concurrently, it's worth noting that they're following BOTH strategies. They are not simply cutting costs.
And one thing Hollywood knows is that the big money is almost always with the approach that adds value.
One of the facts of life in our fast-changing age is that consumers are increasingly fine-tuned to recognize value, especially incremental changes in value. So what are you doing – what is your station doing – to increase the value of its offerings to consumers and marketers alike?
Cutting costs is a one-way path to commodity-ville. Adding value is what makes a brand a "brand" – worth consuming and worth partnering with.
Radio's constant monologue about how many people we reach and how inexpensively we reach them is an argument for commodity shoppers. "Our audience is cheap and large." Isn't it ironic then that the ad dollars we are losing are being lost to alternatives that are less cheap and which control smaller audiences?
Cutting costs can help you diminish the impact of a decreasing ad market when you're facing a buyer counting rating points.
Adding value can make you an essential marketing partner no matter what your Arbitron ratings are.
What have you cut in the past six months?
Now, what value have you added in that same time?