Back once again with the fantastic Pam Atherton on A Closer Look Radio, Eric ties together the disparate topics of locavore restaurants, revolution in Egypt, and fake government shutdowns to what it all means for YOU and your business.
Back once again with the fantastic Pam Atherton on A Closer Look Radio, Eric ties together the disparate topics of locavore restaurants, revolution in Egypt, and fake government shutdowns to what it all means for YOU and your business.
One of the most important trends in corporate governance and business strategy in the last decade has been the feverish drive toward conglomeration. Banking, telecom, heavy industry, energy, pharmaceuticals, and funeral homes have been on the path of combining into ever large corporate entities. This has a broad reaching impact for everybody – workers, other companies, governments, and the investors who provide public capital.
There’s a fascinating piece from CNBC, which features some insight from Reformed Broker’s Josh Brown. It seems that for years, the business media has accepted that giantness is always a great strategic move. Here, there is some real discussion (!) about whether it makes sense to have a single corporate culture attempting to compete intelligently in a broad variety of businesses.
Brown’s point is cogent – sometimes conglomeration a good idea (Berkshire Hathaway) and sometimes…it’s just a whole lot of people with the same letterhead.
Back in the ancient days of, say, 1996 – back when we were erecting large stone monoliths in honor of the various tree gods in exchange for their mercy during the winter months – there was this strange superstition that one should pay authors and musicians and filmmakers for individual copies of their work. You got to “own” these copies and you were able to listen or read or watch anytime you wanted. Some people even got rich from this business of selling copies of artistic work.
Bizarre, isn’t it?
Now we have a host of digital music services that offer unlimited music for fractions of a penny per listen. But even stranger, we now even have things like Grooveshark which work like the original, gangster, Wild West, lawless version of filesharing circa 2000 – only prettier and easier to use. I’m listening to it now. It is positively baffling how well it works and how free it is.
We have entered into an age like no other, in which a human being born today will essentially have unlimited entertainment from the artistic output of a number of centuries available anywhere he/she goes, and for free.
Future generations will be able to spend a year watching situation comedies from the year 1985 – in real time – commercials and all – available for free in some far off Burbank computer server. Next year, do you want to do nothing but listen to Dixieland jazz and Glenn Miller-era swing? No reason not to. When you have finished, you can read every book published in Scotland in 1820 while listening to Creedence Clearwater Revival. Don’t forget to tune in for our free streaming marathon of Greek and Albanian soap operas! Followed by 2000 straight hours of the Manga Channel, a specially curated webzone for people who love extreme tentacle-centered Japanimation.
And not a dollar will change hands.
Let the implications of that development sink in. It means a lot for how future generations will act.
Yes, that’s the headline making the rounds, and I suppose it is a signpost on the way to the future of media. Twitter just raised an additional $200 million, bringing its market cap to $3.7 billion. We are then reminded that this is twice the market capital of the “New York Times Company,” which apparently produces a small local weekly shopper tabloid in the Long Island metropolitan area, so the comparison is a Big Deal.
Question: What does Twitter do to make money?
Google: They have a clear business model: give search and YouTube and mail away for free, and stuff them full of target ads based on what the user is doing at the moment. Brilliant, profitable, and results in a $500 per share stock price.
Facebook: They have managed to get every human being on the planet to connect to each other and post pictures of their respective pets and undignified moments from high school. The humans all agree tacitly to let this data be harvested, which is bought by market researchers and advertisers. Clear, a bit more complex ethically, but likely monetizeable.
New York Times: Long form, urbane in-depth journalism with ads on every other page. Clear, 20th century , maybe-profitable-again-one-day business model.
Twitter: …sponsored tweets? Some people pay for them?
First, while I love Twitter and find it functional, until I understand what they buy low and sell high, I will reserve judgment on their business model and what it means for other companies.
Second, they shouldn’t be compared to the New York Times. Yes, newspapers are on hard times. Yes, their model was more successful in the 20th century. But the insight provided by long-form journalism is not remotely equivalent to 140 character blasts about “Dang, it’s snowy and mah car is burried!”
Just because something is no longer hip does not mean you should underestimate its importance. If I said “railroads” and “Chevy Volt,” which term would have more relevance to the “hotness” of 2010? Well, Berkshire Hathaway dropped $44 billion to acquire the Burlington Northern Sante Fe railroad. Very 19th century in terms of hipness, I’ll grant you, but Buffett is no dummy.
When you’ve been in the business of forecasting for more than a decade, it’s fascinating to see how your past scenarios become current events.
More than ten years ago, I remember discussing the conundrum of digital imaging with the executives of Kodak. It’s not that they didn’t see this coming, it’s that there was no elegant way to repurpose billions in chemical factory infrastructure for a world of integrated circuits and hard drives. Looking back at 1999, it was difficult to see a world where Kodak thrived using anything resembling their old model of competitive advantage.
Today, Kodak has now been delisted from the S&P 500, along with the New York Times and Office Depot. Added onto the list of bellweather stocks is Netflix, a company whose shared are trading near $200, a company whose business model seemed like a long-shot at the time.
The whole point of analyzing future is to understand upcoming competitive dynamics. There will be new winners and new losers.
Competitive…Futures…yeah, I like the ring of that.
This is the official trend blog of Competitive Futures, a management consultancy that provides trend research and analysis for business and government around the world. Here, we update you on interesting trends we see as part of our work for our clients.
For managing partner Eric Garland's new author and speaker blog, please consult and bookmark http://www.ericgarland.co