Following a dual-path strategy

Adding trend lines to the fragmentation and disintermediation of media forces us to consider that the local media company of tomorrow will be vastly different than the radio station, television station or newspaper of today.

Long-term prosperity for tomorrow begins with the assumption that we will be more than we are today. This is step one in the transformation from a single entity with one core competency to a vibrant local media company with a portfolio of properties and multiple business models.

This vision of tomorrow is what drives AR&D's Simulpath™ strategy, the following of two separate paths on the road to profitability.

Path one includes a host of tactics designed to extend our existing brand into the world of cyberspace.

Path two moves us directly into the disruption that is attacking our core.

Necessarily, we put more resources into path one today, but as our dual path efforts mature, resources will naturally swing to path two.

This is because path two is the road of growth. It plays by different rules, but it's only confusing if we make no effort to understand its core business tenets.

So it's important we look at where we're headed in order to accommodate this inevitable switch, for the profitable local media company of tomorrow will be one that necessarily attacks the inefficiencies of the mass marketing model that drives path one.

Broadcasting isn’t the only industry that’s had to face this uncomfortable reality. IBM was the mainframe computer company when the personal computer came along. Kodak thought it was in the film business until digital photography blew away its core competency. IBM found the courage to compete with itself and blossomed in the PC market. Kodak fought the change, and it nearly cost them everything.

Of course, the mass-marketing model of our Media 1.0 business will always have an audience, but it’s a mature business now. And as we look at the parallel path of Media 2.0, it’s clear there will ultimately be competition between the two for ad dollars.

So when we say that we need to move "into the disruption," we're saying we need to find the courage to compete with ourselves in very real ways. In this way, we become the disruption and can conduct ourselves on the same playing field as the internet pureplays who are after our revenue in ways we don't even yet see.  

The new structure of local media

What will emerge from the transformative stage of the next five years is a business structure that looks very different than the single-entity model of today, one that will include at least ten new axioms:

  1. We will be in the database business. In a user-driven world, this is inevitable, for the choices in information “pulling” belong to them. Our job is to organize everything to facilitate their pulling.
  2. Search will be our portal. There is no better way to enable users to find data than through search, and this will be where our real competition exists. The smart local media company of 2012 will allow users to filter information “on the way out” through search rather than “on the way in” through attempts to organize everything into categories.
  3. We will be regional with hyperlocal nodes. From entertainment to information, we simply cannot compete with the national and global efforts of established players, but we also don’t need to be limited by the boundaries of our DMA. This will be an area of significant downstream growth.
  4. We will run a local online ad network. A single web-based entity cannot out-perform the advertising potential of a network. Our job will be to organize that and split revenue with other local publishers.
  5. We will be in the information aggregation business. Content cannot be scaled as it used to be, and if everyone is making content, we need to be in the position to aggregate everyone’s work.
  6. We will enable commerce. Advertising is evolving to that which is personal, and the smart local media company of tomorrow will encourage this. As such, we will lead the way in putting businesses together with potential customers in a manner that goes beyond simply putting messages in front of their eyes.
  7. We will be in the niche-driven, social media space. In the world of consumer-generated media, new online communities are springing up every day, and we will certainly be a part of this in the future. The smart company, however, will build communities around information niches, rather than trying to herd users into any single entity.
  8. We will run user-specific mobile applications. The drift to portable information and knowledge is certain, and we will be a part of that through the development of applications that allow for user customization.
  9. Operational and organizational systems will be different. From our daily workflow to the skill sets necessary to perform our daily tasks, everything will revolve around multi-tasking, regardless of which path  we’re on. Versatility, flexibility, and adaptability will be required of every employee.
  10. We will work with today’s competitors. The old saying “half a loaf is better than none” certainly will apply to us downstream. We’ll see that creating online environments where users can find aggregated information is a better solution for them and that working together to create such solutions will be a necessary part of doing business in 2012.

    The time to begin creating the foundation for this model is now, and there is no time to waste. Speed to market is critical, because there really is only room for one major organizer of the local web.

    That will be determined by who has the courage to commit resources to building the foundation.