Tuesday, June 28, 2005

Newspapers' Big Mistake

In a cautionary essay : How Transistor Radios and Web (and Newspapers and Hi-Fi radio) are Alike, Rich Gordon points out the similarity between how newspapers today are confronting the technologies of the Internet and the introduction in the 1950s of the portable transistor radio. When the transistor radio was first made, the U.S. radio manufacturers rejected it for its poor sound quality. Radio manufacturers in the US continued to cater to their existing market for vacuum tube radios. They failed to understand the disruptiveness of this new technology. Transistors appealed to the people because of their portability. The US companies didn't move int thi market allowing the the rise of a Japanese company, Sony.

Gordon points out that there are strong parallels with newspapers and the Internet today:
[. . .]it’s clear that a new generation of consumers prefers web sites to newspapers, because this generation values different things in media. Last year, the Online Publishers Association’s “generational media study” found that young adults 18-34 consider the Internet their first choice for weather, sports scores and stories, national news and breaking news. Older adults (35-54) were less likely to turn to the Internet first for these types of information.

[. . .]

As today’s young adults get older, it seems quite clear that their on-line and print usage habits will remain different than those of their elders. Like the young adults who kept buying Japanese consumer products as they got older, they are likely to keep relying on the Internet for news and information.

[. . .]

Newspapers’ problem in the Internet age is not, mostly, their content. It is, instead, the package (or device) the content comes in that compares unfavorably to the Internet in the eyes of young people.

Hence the imperative for the newspaper industry: engage young adults on the Web.
Gordon feels that the newspaper industry is making the mistake of focusing on the traditional customers who give it the highest profitability -- at the moment. Newspapers are using the Web to serve the same customers they make the greatest profits from in print — classified advertisers. This was the same mistake committed by the US Radio manufacturers in th 50s. Newspapers should instead, he advises, capitalize on the new disruptive technology by using it to serve a new consumer market.

Gordon suggests:
Newspapers that take disruptive technologies seriously should, instead, be creating new interactive products geared to young people. And web sites are only part of the picture.

After all, thinking back to the lessons of rock ‘n’ roll radio, portability may be the most important media attribute for young people. And a new generation of portable devices — cellphones, iPods and PlayStation Portables — might be today’s transistor radios.
Very interesting and compelling argument. Read the full piece here.

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