Return on Investment or Die
I’m always interested in the way people generally like to think of tomorrow as the same as today only better. Not different. Definately not different. The belief that tomorrow will have newspapers made of the same stuff with the same content for the same people… and YouTube will be there forever. You can put Microsoft onto that list, if you like.
First, any business can go broke if it forgets what its business is. Second, any business that isn’t making a return on investment is not in business – its in social donation, if anything. Third, any business should know when to change and how to change to adapt to the external environment and sometimes people are just failing to see the need for new business models. Not new because they’re better, just new because the reality of the world has changed.
Murdoch lost the vast majority of his advertising revenue in a large splat – the writing is on the wall for the newspaper business model and has been for a long time. Murdoch wants you to pay for content online by paying subscription fees. Good luck with that Rupert, but you don’t need to waste millions because you’ll fail and lose. It’s time to figure out a new way to do business, not a new way to get revenue from exisiting readers. Employ innovative people – ring Clay Shirky and pay him a gazillion dollars for some ideas. Then act on them. Embrace change.
YouTube is losing Google money hand over fist to the tune of half a billion dollars per year. The problem is that monetizing the crap is impossible so how do you get those returns back? Where’s that return on investment? Google is putting people off and tightening their budget. Would you sustain half a billion dollar losses with no perceivable payday during a recession? Nothing lasts forever, they say. And yet somehow we expect that to be true, as humans.
The truth is that the web has changed how we think about stuff, how we share it, and how we expect to exchange value in return for that stuff. The culture of free is almost exponential. Yet some people are making money by thinking about things in different ways. Murdoch needs to ring a few of those small bit players and ask – how do I make money? Again, I’d suggest they start at Clay Shirky.
The bottom line of any sustainable business is the increase of wealth from society to ourselves with an exchange of value for value. It’s return on investment or die. Expect a few more big players on the march or die route to sink. And, by the way, when they do – who owns your data? Where does that go? Have you considered your exit strategy?
And, if you’re in business and the world’s changing around you right now, maybe it’s time for you to think about new ways of spinning that dollar.
