Why No Disruptive Business Models Emerge Inside Media

(MoneyWatch)  Before you conclude that what follows is entirely orthogonal to the media industry, please allow me the luxury of considering a few details of what I've been up to lately. Bear with me, please, this may be a winding path.

The past few days I was visiting the California Institute of Technology in Pasadena. CalTech is up there with M.I.T. as one of the two most respected scientific universities in the country, though once you're west of the Mississippi, it's actually no contest.

One thing that struck me during my visit at this center of brilliance was the ongoing importance of basic research for our society, our population, and yes, our industries. There is, of course, an element of the scientific method of research that closely parallels that of our greatest journalists, and that is the rigor of working from a hypothesis toward conclusions, supported by fact, in order to yield new "stories."

I hadn't thought of it this way until our tour guide (who also doubles as a Phd student in neuroscience and my oldest son, at his fruit fly research lab at CalTech) described how and when he and other scientists choose to publish their latest results. "It's just enough when it is a new story, maybe just a chapter in an unfolding story."

This, of course, is the way of all media. We are set up, on the creative side, to produce the next story. On the business side, we must be optimized to produce the revenue not only to cover the cost of generating that story, but of carrying our collective operation forward.

But it all comes back to the story.

The second insight that hit me as I was driving the 400 miles back north to my home in San Francisco was of an entirely different nature: Where do disruptive business models come from? My traveling companion and I were discussing how Zipcar and CityCarShare have utterly disrupted the traditional car rental industry in the past few years.

"The rental car companies could have innovated car-sharing," she said.

"But they didn't," I answered.

And that is the point. Most people employed within well-established industries do not have the imagination, nor the incentive, necessary to invent disruptive business models. Thus, these come from outsiders. The only option left for the traditional player is to copy the innovator, acquire the innovator, or somehow use legal and political muscle to suppress the innovator.

I told you this would get to media, dear reader. So, think about how our media industry as a whole has reacted to the multiple threats to its traditional cash-cow status -- to Craigslist, which has improved the classified advertising model. (Blame Craig for killing newspapers.) To Google, which has improved the user's ability to find news. (Blame Google for killing newspapers.) To the Internet generally, for vastly expanding people's access to news and information about everything imaginable. (Blame the Internet for killing print media.)

And now we come to Twitter, and the social media revolution that is transforming everything we've come to understand the past 15 years about networked, interactive media. (Dismiss it as a fad.)

The pattern here is defensive. There has been an almost total collective failure by mainstream media companies to recognize the threat, and therefore the potential, of disruptive technologies since Tim Berners-Lee opened up the global supermarket of digital information to anyone willing to log in and browse.

Why? These media executives got way too comfortable. They forgot that old adage in journalism -- that you are only as good as your next story -- probably because most of them were never journalists in the first place, but hangers-on with a stake in the way things were, not the way they might be.

Whatever it has been and whatever it becomes, and even however you may define it, the media industry is about creativity -- on the content side, the business side, and the technology side. The people who play it safe, who hold their ears against the drumbeat of change, are doomed to be swept away.

And so it should be.

Those open to change, who embrace change, those who apply their own creative thinking to changing circumstances will adapt and survive, and -- if they are very lucky -- even thrive.

But, at this point in history, this is not a safe industry for ass-kissers, the risk-adverse, or conventional thinkers. It's time now for those of you who fit those descriptions to exit, stage right. Then, even those who remain better hold on, because this is going to get bumpy.