Why Traditional Media Companies Cannot Innovate
April 9, 2009
Eric Schmidt suggested that newspapers innovate to generate revenue. A reader sent me a link to an essay called “Startup #119: Why Startup Innovation Kicks Corporate Booty” by Joseph Ansanelli here. I found this write up quite good. I downloaded it and printed it out. I think I will be able to reference it in my upcoming iBreakfast talk about Google’s newspaper “issue” in New York on April 23, 2009.
Mr. Ansanelli hits the nail on the head. Technology is not the problem. What is? Mr. Ansanelli identifies three factors: People, freedom, and failure. In my opinion, a large media company is a political animal fueled by soft skills. Instead of figuring out technology, the media wizards talk about color. Color is important as is design. The problem is that innovation in a media company is different from the type of innovation one finds in a engineering centric start up.
Mr. Ansanelli wrote:
You need to invest money in lots of projects and only a few will succeed. Corporations cannot typically afford to do this. Which is why the most common route for successful innovation for large corporations is through acquisition of these companies. It is far less expensive and risky to acquire an ongoing business that has proven itself then to invest in the 50 different ideas to try and find one that works.
With newspapers starved for cash, in my opinion, innovation is going to find itself starving for cash. No money, innovation will die from a lack of oxygen.
Stephen Arnold, April 9, 2009
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