Despite its success, Squidoo could never be profitable if it were run the way, say, a newspaper is run, says Seth. Fact is, Squidoo, for all its popularity, is run by half a dozen folks. How many folks are in that big newspaper building downtown? How many folks are in your broadcast company?
One thing that makes digital media so disruptive is that it can achieve profitable scale without the need to make the same profits much larger and more traditional institutions require.
So when Mel Karmazin criticizes Pandora for not having a workable business model, he is not recognizing that Pandora probably numbers less than 100 employees with no towers and no satellites and no hefty talent deals. Just one big idea and the technological wherewithal to run with it.
So what's a broadcaster to do? One of two things….
Either make your broadcast company look like Pandora (or, more accurately, think you can. This is where most radio operators are headed, by the way).
Or provide exceptional and unique value to audiences and advertisers alike such that no digital interloper could hold a candle to you on your turf (you can accuse me of being vague, but the details depend on your situation, your resources, your competitive advantages, and your ability to embrace change).
In some ways, this is precisely what Sirius XM is doing – albeit in a form hampered by the best technology of 1995 and the limiting construct that "pay cable" is an apt metaphor for digital times. And hampered by a host of music-only channels which are completely redundant to a universe of alternatives. But other than that….
What matters now, says Seth, is being the best in the world at what you do.
Not being the cheapest or the even the most popular.
When was the last time your company talked about being the best?