Competition and the market are like water, they go where they want
Here’s a way to think about it, inspired by Merlin Mann: Imagine that next year your company is going to make 10 million dollars instead of a hundred million dollars in profit. What would you do knowing that your profits were going to be far less than they are today? Because that’s exactly what the upstart with nothing to lose is going to do. Ten million in profit is a lot to someone starting with zero and trying to gain share. They don’t care that you made a hundred million last year from the old model.If I’m an upstart publisher or a little-known author, you can bet I’m happy to sell my work at $5 and earn seventy cents a copy if I can sell a million. Smart businesspeople focus on the things they have the power to change, not whining about the things they don’t. Existing publishers have the power to change the form of what they do, increase the value, increase the speed, segment the audience, create communities, lead tribes, generate breakthroughs that make us gasp. They don’t have the power to demand that we pay more for the same stuff that others will sell for much less. And if you think this is a post about the publishing business, I hope you’ll re-read it and think about how digital will change your industry too.
This post by Seth Godin is so spot on, it hurts.
So please all you producers of music, movies, pictures etc. all you publishers of newspapers, don’t fight the digitalization of your industries. It’s a war you have already lost and will never be able to win.
Rethink your business models and follow the market or – even better – create a new market. There are plenty of great opportunities out there. And if you find yourself stuck in a declining market in 2-3 years from now (it has already happened as I posted in “Prepare For The Digital Age: The End Of Newspapers“), don’t blame the digital age for it. Markets will always be changing that’s there nature.
These are amazing times. Embrace them.
2. January 2010 @ 13:53