The Search For The Mythological Magical Business Model Bullet

from the give-it-up,-it-doesn't-exist dept

One of the things I've noticed over the past few years, in discussing the various business models that are working for content creators, is that one of the regular criticisms we get is that "this won't work for 'x'." Or something along those lines. Basically, they want to write off any success story as an exception, and yet they like to use any "failure" of a business model experiment as proof that innovative business models can't work. That all seems backwards to me (after all, if a single failure disproves a business model, then we can conclude that the business of selling CDs or movies "failed" the first time one of those offerings flopped).

I was thinking about this a bit more after reading Mathew Ingram's take on Paul Biggar's long post mortem on why his greatly hyped NewsTilt collapsed and shut down after just a few months. That post is interesting, though not surprising if you've ever worked in a startup (especially one that's failed). NewsTilt was trying to "solve" the "problems" facing the journalism business, but the founders admitted they didn't really care about journalism that much -- which was a pretty big problem. Still, what caught my attention at the end of Ingram's post, was where he notes (paraphrasing David Cohn of the journalism startup spot.us):
There is no magic bullet that will suddenly save the media industry, or transform ordinary journalists into independent-thinking online media businesses.
I'd expand on that, and note that there is no "magic bullet" that will suddenly save any content industry that's in a state of disruption today. And that's okay. But it's part of the problem. The folks who were used to being able to rely on artificial scarcities had a crutch for a business model. It let them lean on that artificial backstop, rather than really think about more creative (and, potentially, better) business models. But, just as relying too much on crutches without exercising your legs can make those muscles atrophy, those who rely too much on artificial scarcity let their creative business modeling ability atrophy as well. So they all want to know what the "magic bullet" is, and have trouble accepting any answer that doesn't involve a magic bullet. If it's not a magic bullet, it's an "exception" or it "won't scale," and thus, it doesn't matter.

But that's a huge mistake. Because one way or another, all of these industries are changing rapidly. And while certain models will become more standard, none will be a magic bullet. It's always going to involve experimenting and adjusting as the world changes. Those who are waiting for the magic bullet seem to think that if they just keep asking for a magic bullet, the old models crumbling around them will stay up. That's not how it works. The old models are crumbling, whether or not there's a magic bullet. So rather than complaining about the lack of a magic bullet, isn't it about time you started experimenting with what is out there?
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Filed Under: business models, magic bullet


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  1. identicon
    out_of_the_blue, 4 Oct 2010 @ 11:22am

    Hasn't been a crutch so much as a feather bed.

    I don't think you consistently or sufficiently factor in that "content creation" relies on *limited* acts that can be sold an *unlimited* number of times. That automatically moves the setting from reality to nearly literally fantasy: "money for nothin'", as Dire Straits said. Because "content creation" actually produces *nothing*, certainly nothing *necessary*, it only works with a sort of faith and when there's no other choice.

    Taking that as so, and applying it to "news": turns out that valuable social services are difficult to glean income from, and increasingly so with lots of competition. Advertising is just not going to work in diffuse outlets; all present funding mechanisms only work when focused into a few channels. To me, that argues for social subsidies to people whom we all agree perform valuable services -- paid for by taxing the hell out of those whom we all agree are *not* contributing to society. Otherwise, we end up in the dark for news, under a plutocracy that fosters a police state, because that's the "business model" currently succeeding.

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