You probably have heard the old joke about two campers in the woods ….
Two campers are in the woods and see a bear. One camper immediately puts on his shoes. The other camper turns to him and asks, “Why are you putting on your shoes? You can’t outrun a bear.”
The first camper answers, “ I don’t need to outrun a bear. I just need to outrun you!”
I have seen a similar dynamic over the last year or so in traditional media. When I ask traditional media executives how are they are dealing with the recession or dwindling advertising dollars for traditional media, the response is usually that they may have seen a downtick in their business but the other guys are in much deeper trouble because they have (pick one or more of the following) – public shareholders, a smaller sales force, younger publications, a too focused demographic, a too broad demographic, a bad haircut, etc. The assumption is that the other guys are worse off and will fail first; therefore, they will be fine due to less competition. This is even worse than just trying to outrun their competitors – they are just trying to tread water and hoping their competitors will trip and fall.
If the Bear in the story is innovation in emerging media (pick your type and format – iTunes, YouTube, Facebook, etc.), just out running the other traditional players will not work. Companies need to innovate and push themselves – even if it means cannibalization – to stay ahead of the innovation curve.
Even when the Innovation Bear has gotten the weaker runner – it is still not satisfied. We have seen examples in the past of the stronger runner acquiring the weaker competitor in order to gain scale and fix the core business. It has been tried in a number of ways – geographic focused traditional newspapers (consolidation of the Philadelphia local papers), building national radio footprints (Westwood One) and cross geography (Cablevision’s acquisition of Newsday), etc. These examples all resulted in failure because they did address the core issue of fundamental innovation and instead relied on a short term, tactical quick fix or band-aid.
The Bear of Innovation in emerging media is smart, getting stronger and has a number of fundamental trends at its back (consumption patterns, demographic shifts, trackable advertising, etc.) Out running other competitors may be a good way to tread water and buy time as we wait for the economy to recover, but the Innovation Bear will continue to come until the core issues are addressed and the Bear is face down.