March 11, 2013
Clay Christensen, the Harvard Business School professor who has helped shape the thinking around technological disruption, has been analyzing the media industry of late — a market he believes is undergoing a fundamental disruption. During a recent panel discussion at the Nieman Foundation, he warned that many existing media entities are still thinking of their business in the wrong way and are not changing quickly enough.
“A key part of Christensen’s theory is that the incumbent players in a particular industry routinely fail to make the necessary changes to the way they do things, even when they can see the disruption occurring all around them,” explains paidContent. “In almost every case, they see the disruptors as not worthy of their attention because they are operating at the low end of the market, and either don’t see that as important or are too committed to their existing business models.”
But those low-end competitors open up new markets. “Although Christensen didn’t mention them by name, the obvious low-end competitors in the media business are players like The Huffington Post and BuzzFeed — both of which started at the low end of the value chain but have been moving up steadily, a trend that Christensen’s theory also describes.”
Christensen details his theory further, noting that a change is occurring in the media because of commodities. “As disruption occurs, it commoditizes a layer in the stack, so what used to be a high value-added activity that was very profitable and others couldn’t replicate, now becomes cheap and easy and anyone can do it. It used to be that news and information was one of those layers in the stack — no one could play that game like The New York Times… but now everyone has access to more information than they could possibly use.”
In order to manage this sort of disruption, he says, the key is to find those “value-added businesses or markets or functions — ‘jobs to be done,’ as he calls them — that news or journalism consumers are looking for,” writes paidContent. “One example, he suggests, might be taking in all of the information people are deluged by and telling them what is true and what isn’t.”
“Are there jobs for which there have not yet emerged viable competitors?” asks Christensen. “I’m awash in information, but I need someone who will tell me what is true, and it’s not clear that anyone has really done that job yet — The New York Times thinks they’ve nailed that, but it’s not clear to me that they have.”