My big take-away from the South-by-Southwest (SXSW) Interactive festival this year was a further validation that big media companies -- traditional publishers of print content in particular -- are still searching for a way to halt their collective slide into eventual insolvency.
Surely, given their vast resources, the very best big publishers are capable of evolving their business model. At least, that's their hope for the future. But, how does an innovation-challenged organization avoid extinction when unrelenting disruption of the prior status-quo continues to erode their once dominant market position?
As I attended the various panels related to this topic, I was reminded of the book "Inside Project Red Stripe" by Andrew Carey -- the story of how six of The Economist's cleverest people tried to create the "next big thing" online and essentially failed, after investing six months in idea exploration.
Hope in the Trust Economy
Big media companies seem to now be clinging to the belief that their fate is somewhat contingent upon the perceived value of an established reputation -- as an example; they're a trusted-source of quality content that you won't find anywhere else.
The rationale goes something like this -- as long as they can perpetuate the facade of their unique trustworthiness, then they still have a fighting chance of competitive survival in the 21st Century.
That said, when looking for a viable solution to their numerous problems, self reflection on past strategic blunders doesn't appear to be under serious consideration. A case in point: the industry insiders still maintain (in denial) that their worsening situation is the fault of others, not theirs.
Craigslist is to blame for the loss of classified advertising revenue. Google is to blame for aggregating newspaper content, grouping it with non-traditional publishers and thereby confusing readers. Bloggers are to blame for producing good-enough quality content, combined with low-price advertising rates. The list of excuses goes on and on.
Competing with Amateurs isn't Easy
In the panel entitled "Media Armageddon: What Happens when The New York Times Dies?" we heard a New York Times employee lament how "professional" reporters are totally frustrated at being scooped by more agile bloggers who tend to publish the story long before the journalist is ready. Others on the panel made consoling comments about the unfair advantages of amateurs.
Ironically, the New York Times has had to deal with several setbacks that eroded trust in the organization's editorial staff -- one of the most recent being accusations of plagiarizing content.
In the panel entitled "Crowd Control: Changing the Face of Media, or Hype" an employee at CNN insisted that investigative reporting was alive and well at big media companies, even after the perpetual newsroom staff cuts. Others on the panel shared their thoughts about how complete and accurate new event coverage typically came only from the established news networks.
Yet, CNN was happy to report (after fact-checking?) on the existence of weapons of mass destruction, when there weren't any found in Iraq. Meanwhile, they neglected to report on Iraqi civilian casualties as a result of the many U.S. air raids during the initial invasion and occupation of Iraq.
Is that why some people say they now watch The Daily Show with Jon Stewart on Comedy Central for the most unfiltered news from around the world? Has news parody become the only remaining path to truth-in-reporting on network TV?
Earned Media in the Free Market
My favorite commentary at SXSW was the notion that perhaps the average American consumer is too stupid to know what quality research and news reporting looks like -- therefore, more people now read independent blogs.
Yes, that's right, it's the customer's fault -- they are to blame as well.
In reality, there's a growing free-market for trust in 2010 and there's also enough thinking people in America to sustain this market transition for a very long time -- if that's what it takes.
Thoughtful trust must be earned -- it's no longer implied by a mere legacy brand. You can't easily regain misplaced trust, it's worthless when you try to buy it, it's pointless to try and fake it. Those who truly are worthy of people's trust will have to compete with a multitude of others who have already proven to be equally or more deserving.
This, I believe, is a sign of much needed progress.
Update: most brands are inherently overvalued by their creators, when moving into a market adjacency scenario. Here's a case in point. Western Union thought they would be a major player in the e-mail services market, based on their legacy brand -- as a trusted provider of telex and cablegrams. However, they failed to fully understand the new medium, and they eventually shuttered their email business after a few years of deep financial losses.