Friday, April 7, 2017

The Content Trap

Getting ahead in the world seems like wading through a never ending swirl of new trends.  Research and analysis tries to keep up with developments.  As Bharat Anand started this book he predicted life would change during the process.  He was surprised by a project he became involved with forced him to adopt some of the book's thinking

In a world with relentless pressures and seemingly never ending technical innovations the author identifies two basic problems:  1).  getting noticed and 2). getting paid.  If you aren't different in business you will die.  The value of this book is a a deeper understanding of future business basics.

Traditionally advertisers have paid for the dissemination of information.  Now there is free information, including ads on the inter-net  Many newspapers are out of business because many people find it more cost effective to advertise online.

Schibsted, a publishing firm in Norway illustrates it is possible to take a print newspaper and convert to a very prosperous online entity.  They were able to persuade Germans to advertise their cars on the Norwegian website.  In South Africa, the Occar Pretorious shooting happened between press deadlines forcing the owners of one firm with an opportunity for a scoop to first present story online.  This forced them to change their focus.

Connectivity is the key factor.  User connectivity, product connectivity and function connectivity.  Schibsted asks 'how can we help our readers to help each other."  The strength of a network is its connectivity.

It is fixed costs that make upscaling so profitable.  Walmart always credited for tough bargaining with suppliers, but they are variable costs.  Other moves they made include rural locations, clustering, reduce advertising.  These steps reduced fixed costs.

Most consumers resent the bundling cable channels.  The author contends there are benefit for both providers and consumers.  The practice keeps the costs down as individual channels would have to have a higher price.  The consumer gets lower costs for their choices while the provider reduces fixed costs.

One fact hit me--You Tube offers their viewers a chance to skip watching an ad, but it is only after 3 seconds which is required in order to charge an advertiser.

Complementary items increase each others value and are an example of function connectivity.  At one time a CD was an ad for a concert, but now the price of obtaining music is cheap while concert tickets are more expensive.  The Michelin system for evaluating restaurants was originally intended to encourage people to drive more.

Some advice from an established advertising analyst, David Ogilvy:  "Information about the product is more important than persuading the consumer with adjectives."

Competition advantage ultimately comes from scarcity and differentiation.  Managing the two is the key to digital success.  Many examples are given how some companies stumbled or sometimes planned for better connections to demonstrate their value.

While in the midst of this book Bharat was asked to help design online courses for the Harvard Business School (where he was a professor).  Stumbling around he realized that students learn best when they engage with others.  Borrowing from concepts learned writing the course encouraged students to interact.  We all connect with others in ways not previously thought possible.

To get some more insights from Bharat visit:  https://www.entrepreneur.com/author/bharat-anand

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