Why Bertelsmann Is Wrong To Compete With MySpace

from the try-to-do-something-different dept

Back in the day, Bertelsmann was one of the few more enlightened media companies. Under the leadership of former CEO Thomas Middelhoff, the company actually wanted to embrace file sharing, and invested in the original Napster. Middelhoff talked about how the internet was changing the media industry, and why the companies in the space needed to embrace the change. Then Napster lost its court case, the internet bubble burst, and the old guard rejoiced in saying that Middelhoff was wrong, eventually forcing him out of the company. However, it looks like Bertelsmann is now trying to get back into the internet game -- though a few years too late. Their latest plan is to build an "entertainment-driven social networking web site" designed to compete with MySpace. Of course, this is exactly the wrong way to go about things, for a variety of reasons. First, it's unlikely that Bertelsmann will be able to effectively compete against MySpace because it will be limited by the company's attempts to promote its own content. In fact, the article clearly states: "Bertelsmann aims to create a community for its music and video projects." Limiting the community to be just around Bertelsmann content completely misses the point of what made MySpace successful -- which was the freedom to let the community figure out what it was about. However, even more important than that is simply the idea of trying to compete head on with MySpace. We all know that social networks come and go (witness the NY Times retelling of the Friendster story -- a story that's been told many times before). However, you don't succeed by simply trying to compete with what's out there, you succeed by trying to fill a market niche that is left unserved by the current providers. If anything, it looks like Bertelsmann's attempt is to offer less. If anything, it sounds like it should follow the path of Wal-Mart's brief flirtation with social networking, that ended up dead before anyone noticed.

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  • identicon
    Mike F.M, 17 Oct 2006 @ 2:18am

    And now...

    ...that Google are on the scene it will be near on impossible to beat MySpace without some serious innovating.

    reply to this | link to this | view in chronology ]

  • identicon
    Sohrab, 17 Oct 2006 @ 2:26am

    but here is the question Mike, on this site, the idea of new markets and nitch markets are brought up that companies should go after them.

    But how does that process work? Board room, meeting and looking for nitch idea's? or just by sheer accident where I think how YouTube and Myspace happened

    reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 17 Oct 2006 @ 2:56am

      Re:

      But how does that process work? Board room, meeting and looking for nitch idea's? or just by sheer accident where I think how YouTube and Myspace happened

      The process works by looking to fill a gap or a need in the market (or, alternatively, creating a gap or a need in the market). Copying what's already in the market with added limitations doesn't cut it.

      reply to this | link to this | view in chronology ]

    • identicon
      Mike F.M, 17 Oct 2006 @ 3:07am

      Re:

      It is true that both TouTube and MySpace pretty much entered their niches by accident. And this was by being completely open to user intervention, letting other people choose where they went while giving them the platform to do it.

      However, some of the great innovations into markets were created during big meetings where people sat down and discussed the possibility of a niche market penetration, such as tablet PCs. These were planned and didn't happen by accident.

      reply to this | link to this | view in chronology ]

      • identicon
        Darwin, 17 Oct 2006 @ 8:25am

        Re: Re:

        Internet innovation is akin to really, really, ridiculously fast evolution. The fittest survive.
        Accident? Not really.
        Luck? Always helps.
        Innovative approach/niche market? Not a success guarantee, but will get short-term attention.
        Granted, the probability of success goes up astronomically when a bohemoth like M$ or Google purchases a service to offer under their respective corporate umbrellas.
        Still, people can only be led to internet services, but you can't make them habitually use them. The service has to offer something they need, otherwise it will be a short-lived novelty.
        Example: Gmail is a novel approach to e-mail that is actually an enhancement to the way standard web-based apps work. The new Yahoo! e-mail is a web-based desktop app. Neat. Congrats to Yahoo! on making it feel like I am using Outlook or T-bird. The new Yahoo! will probably keep existing users, but will it get significant new users?
        What will be next to crawl out of the pirmoridal web-ooze? Is true innovation still possible? When will "web 2.0" give way to "web X"? And what snappy graphical techniques will be required? And how long until non-computer companies co-opt the trend? Will anyone even care?
        I don't. My next big evolutionary step in computing will be turning my computer off. I think i'll go talk to someone - VOA (voice over atmosphere).

        reply to this | link to this | view in chronology ]

        • identicon
          TriZz, 17 Oct 2006 @ 8:53am

          Re: Re: Re:

          Ummmmm...youtube, no accident. Myspace - completely accidental. Myspace came to be because of a starving artist making his way through college decided to make, for a web developement project, a website where local bands could post content and be heard...

          ...that college project awarded him $565 million dollars and the fame of being "Tom from myspace."

          reply to this | link to this | view in chronology ]

        • identicon
          Knuttsachel, 17 Oct 2006 @ 8:53am

          Re: Re: Re:

          Very well said Darwin.

          reply to this | link to this | view in chronology ]

        • identicon
          SailorAlphaCentauri, 17 Oct 2006 @ 9:52am

          Re: Re: Re: by Darwin

          I do agree with what you've had to say about Internet innovation...but I still refuse to use Gmail.

          I don't care how innovative it is; when a person has 10+ email accounts, adding one more is not a top priority.

          I still haven't been told why it's so innovative. I've been using my Yahoo! email account for 9 years (starting from when my account was a rocketmail account before Yahoo! bought it...it's still the rocketmail handle) and while I'm not thrilled that the new Yahoo! interface is like Outlook, it's still my best account.

          But why am I getting so defensive? I don't know (I'm not a big fan of Google either, but I have to give them credit for what they've accomplished), but I do think that going into the Internet marketplace with essentially what is already out there to compete with it is a mistake. Especially since MySpace started out as a site for musicians.

          I will end my random rant now.

          reply to this | link to this | view in chronology ]

  • identicon
    Eric B, 17 Oct 2006 @ 5:36am

    Walmart

    Thanks for the Walmart tidbit. I missed that.

    reply to this | link to this | view in chronology ]

  • identicon
    Pete, 17 Oct 2006 @ 7:42am

    worked for Microsoft

    Copying what's already in the market with added limitations doesn't cut it.

    While I understand what your saying Microshaft has been cloning and killing the competition for years.

    reply to this | link to this | view in chronology ]

  • identicon
    Okita Soji, 17 Oct 2006 @ 10:28am

    Hey!

    I like Friendster. It's the Linux to my Windows XP...less popular, far more stable and sensible...ya know what I'm sayin'

    reply to this | link to this | view in chronology ]


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