Two Industries That Dis Paying Customers
What Happens When No One Understands a Business Model
July 2007 By Denny Hatch
|
In the News
The History BoysWe are a long way from the glory days of Mission Accomplished, when the Iraq war was over before it was over—indeed before it really began—and the president could dress up like a fighter pilot and land on an aircraft carrier, and the nation, led by a pliable media, would applaud. Now, late in this sad, terribly diminished presidency, mired in an unwinnable war of their own making, and increasingly on the defensive about events which, to their surprise, they do not control, the president and his men have turned, with some degree of desperation, to history.
—David Halberstam, Vanity Fair, August 2008
I found “The History Boys” and downloaded it for free.
It was scheduled to appear in the August 2007 Vanity Fair and I—a nonsubscriber to the magazine—was able to access it long before it arrived on newsstands or in the mailboxes of paying subscribers.
That meant I—a Web junkie—could discuss it at a dinner party while Vanity Fair’s paid subscribers sat there with egg on their faces, feeling ripped-off by Vanity Fair.
When my wife, Peggy, and I ran the newsletter WHO’S MAILING WHAT!, our paid subscribers were our livelihood and our extended family. We knew them by name. I spoke at their conferences, greeted them at conventions and answered any and all questions. In return, they paid for our mortgage, our dinners out and our trips to Europe.
The idea of screwing our paid subscribers in favor of a bunch of strangers was unthinkable.
Yet this is the current business model of the magazine and newspaper industries.
The Internet has thrown a wrench into the inner workings of an already complicated business model and only The Wall Street Journal has figured out how to deal with it.
How is your business dealing with the Internet?
“‘Free’ is a magic word,” said direct mail guru Dick Benson.
One of the great tragedies of modern business was to allow the worldwide Web to become advertising-driven rather than making users pay for the incredibly valuable information and entertainment it provides. In the words of Arkansas Democrat-Gazette publisher Walter E. Hussman, Jr., in his Wall Street Journal op-ed piece on May 7th, “How to Sink a Newspaper”:
One has to wonder how many of the newspaper industry’s current problems are self-inflicted. Take free news. News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.
Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper’s Web site and get that same information for free.
Takeaway Points to Consider:
* Never take your current business model for granted.* If you are giving away for free on the Internet the thing you are trying to sell, how will you get paid? How will your paying customers feel about you? How will your advertisers respond?
* Your paying customers are worth exponentially more than strangers. They deserve to be treated with love and respect and protected from the barbarians at the gates.
* Only The Wall Street Journal—and a few other publications—have figured this out.
* The twenty-something kids with the high-tech knowledge who dictated the protocols of Internet marketing at the end of the last century did not understand business. For them, all information and intellectual property should be free. They had never written a song, spent their life savings to make a CD and then watched it circle the globe to be downloaded by millions and be worth zip, nada, nothing in a matter of minutes.
* The old rules of business and marketing apply to the brave new world of the Internet.
Web Sites Related to Today's Edition:
Vanity Fairhttp://www.vanityfair.com/
“Alas, Poor Couric,” John Hagan’s New York Magazine Profile
http://nymag.com/news/features/34452/
Russell Perkins’ InfoCommerce Group
http://www.infocommercegroup.com/
Advertising Age Magazine 300, 2006 edition index
http://adage.com/datacenter/article?article_id=112563&search_phrase=&002;BMagazine+&002;B300
Companies Mentioned:
 |
|
|
|||
|
|
|
|||
|
|
|
|
