Look to other sectors to learn digital lessons, says Guardian’s Simon Waldman
Customer publishing businesses need to look at the dramatic changes that have happened in other industry sectors if they are to adapt to the opportunities presented by the internet, claims The Guardian's Director of Digital Strategy.
Speaking at an APA breakfast at Microsoft's London headquarters this morning (16/02/10), Simon Waldman discussed the rapid changes that were occurring in all businesses. In a presentation entitled Creative Disruption or OMG: The Internet Ate My Business, Waldman said: "The internet is bringing a new physics of business...it's changing all the rules."
However, this isn't the first time that new technology has brought massive changes, claimed Waldman. Quoting economist Joseph Schumpeter from 1939 he said that many of the same comments he made about the railways were also applicable today about the internet.
"All conditions of location, all cost calculations, all production functions within its radius of influence; and hardly any 'ways of doing things' which have been optimal before remain so afterward."
Waldman pointed to the massive changes that the internet has already had in other sectors especially in the US where there has been a $6billion decline in recorded music revenues from 2000 to 2009 and a 40 per cent drop in demand for newsprint (2000-2008).
However, Waldman said that entrepreneurs had achieved some surprising successes within the digital market: "Who would have predicted the success of Natalie Massenet in launching a high end fashion store online (Net A Porter) or how well a DVD-rental business like Net Flix would do at a time when content is being digitized."
According to Waldman, the affect that the internet has on traditional business models depends largely on the type of product. With holidays for example it is the transaction that has been digitized while with newspapers and magazines it is the product itself.
He believes one of the next product areas that will go entirely online are computer games (at present, the vast majority of these are sold in physical form). And says that mobile will be the next big internet-based platform. "Mobile internet will equal PC-based internet in between 10 to 12 years."
Waldman argues that successful content-based business need to work on transforming the core ("stick to what you do, reinvent how you do it,") while at the same time as finding ‘adjacencies' - related businesses in high growth areas.
He points to the success of The Guardian in acquiring Autotrader which made a ‘brave leap' from offline to online and which is now a ‘£100 million profit business' and also to Germany's Deutsche Post which owns DHL and which has invested heavily in purpose-built ‘packet stations' where parcels from online retailers can be deposited for collection.
"Take the skills you have learned in customer relations and use them elsewhere," he advises.
The APA are running a training workshop on Tues 23rd Feb taking a more in-depth look at 'online content strategies'. Find out more and book your place >>
