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Pros and Cons of Being First Mover to Market

For a half century, it was an article of faith in the media world that being first to market was critical to success -- even more important than having the best product.

At the dawn of the TV age, the first stations got the best dial positions and strongest network affiliations. The first magazines to cover a niche generally were able to beat back any later imitators.

Little appreciated, the 'First Mover Advantage' principle does not seem to apply in new media, according to Kagan Research. It seems to have died in the great dot-com bust of 2000, when being first simply meant losing more money than later arrivals.

In the old analog media world, the business models were straightforward with just a few avenues for differentiation. In today's emerging digital media world, startups invent categories in which strategies get tested with painful trial and error.

The demise of the First Mover principle can be viewed as good news for traditional media companies. Their hefty cash flows combined with using their established "old" media as promotional springboards give them plenty of muscle if they are late entering promising market segments.

But so far old media companies -- which are nervous about overpaying for acquisitions -- have mostly fumbled. Common failings, according to Kagan's assessment: not keeping new ventures lean, being way too slow in spotting niches and not recruiting truly entrepreneurial executives.

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