The Anti-Marketer

Wall Street Journal and Digg: A Brilliant Cram

Up to now, the Wall Street Journal has been one of the very few media outlets able to sustain a paying audience for its electronic version. They were able to do so because a) it was priced reasonably as an add-on to a paid newspaper subscription, and b) because of their unparalleled authority and quality of writing and research.  Basically, the WSJ brand was what enabled them to charge for it when no one else could.

But, long term, that was a losing battle.  Traditional journals have been slow to react to the changes wrought by blogging and social media, and even TV, cable and other media before that, and have been on a steady downhill decline for decades.  It is very uncommon to see someone in their 20s or 30s reading a "real" newspaper, and the trust gap has been rapidly closing with the younger generation now considering newspapers and blogs on par. 

In a very real sense, the print journal readership is dieing off, and as those in their 60s, 70s and even 80s take their subscriptions to the grave, they aren't being replaced with new readers. Holding out even this long to make basic changes to their business model has put at risk the very foundations of their business, namely the relevance and brand recognition that could sustain a future.

My partner at The Disruption Group, Mike Urlocker, has written extensively about disruption of traditional print media, so I will simply refer you to the lengthy list of analysis of this phenomenon that we've already done on the subject below:

Rampant Disruption of Traditional Media

• Newspapers: Disrupt This
• Shock Horror: News Slump
• Should Journalists Blog
• Future-proofing Print Media: Q+A with Matthew Ingram
• Guest Post: Journalists Must Adapt or Fade
• Newspapers, Who's In Charge? The Non-Customers
• Newspaper Coalition for Net Ads
• Death of Newspapers
• The Downfall of a News Kingdom
• Scoble and Microsoft on the Death of Newspapers
• Innosight Blueprint to Reverse Newspapers' Decline
• Bloomberg Media Disruptor
• Stop Press: TV Guide Halts Print Production - Who's Next?
• Five-Ws for Fixing Newspapers - Plus a Framework on How
• Four Questions for the Disrupted at Time Inc.
• Disruptive Media: Newspaper Redesign

It has been inconvenient for me, as a blogger, precisely because the WSJ stories often offer better information than other sources and a different take on the news, and so although I've referenced them, links to their articles have only been available to those who already had a paid subscription or who were willing to pony up to read that article.  But yesterday, that all changed in a brilliant stroke of business strategy between an old titan and a new one.

Digg Makes Wall Street Journal Online Edition Free

As of yesterday, the Wall Street Journal now adds a Digg widget to the end of all their online articles. And, any article that gets 'dugg' will be available to read for free if you go through Digg's site to get there.  The online journal is still a pay-to-read site, but this loophole ensures that anything I want to reference will be available to my readers, because all I have to do is Digg it.  Ultimately, that means the online WSJ is now free, as long as every article gets dugg at least once.  But, it also means that Digg gets a huge wallop of credibility and traffic thanks to the Wall Street Journal, and a whole new business audience.  And, the Wall Street Journal maintains some vestiges of its walled garden, but will have sudden street cred and accessibility with bloggers because of Digg.  Wow.  I wonder if this deal has anything to do with Murdoch's pending takeover of Dow Jones -- it certainly is one of the smarter and more aggressive plays for a traditional media player to finally enter the new world.

This is a classic example of what Christensen labels "cramming" in his discussion of disruption theory.  Basically, incumbents often ignore disruptions until it is too late to do anything about it, and then make valiant attempts to "cram" the disruptive innovations into their existing offering to try to forestall or block the disruption.  This can be accomplished through a purchase or merger (e.g. when Time Warner and AOL conjoined), or as in this case, by incorporating the new thing into the old in a way that is a bit kludgey, but offers a strong mutual benefit and breaking down of the walls. 

Most crams eventually fail.  The disruption either still wins because the business models are incompatible, or they eventually subsume the old business into the new and the vestiges of the old simply die off.  AT&T, for example tried various crams (buying NCR, buying cable networks, starting and then selling a mobile phone business, etc.) before selling each off and destroying hundreds of billions of dollars of shareholder value.  AT&T very nearly died in the process, and it was only the merger back into its former spin-off baby bell that saved the AT&T brand from extinction.  And, it still may not survive.

This cram, however, makes big sense for both sides, especially as an important signal by the Wall Street Journal that it will be a significant social media player.  Still, it will depend on what they do next. Print, and the capital that is tied up in buildings, printing presses, distribution networks, and massive staffs (most of whom aren't necessary in the new blogging world) is an albatross that makes all newspapers unable to effectively compete against the low-end disruption of blogs.  Even the venerable Wall Street Journal with its quality, brand and history can't survive forever if its subscribership continues to decline and advertisers either go elsewhere or demand lower rates or both.  They still need to fundamentally rethink their business model and make much more significant changes in the very near term, or this could also be a signal of the beginning of the end.

But I think Murdoch is smarter than that, and I look for more exciting and surprising changes to come.

Significantly, there is no mention of this deal to be found in the Wall Street Journal itself (strange that they said nothing, but let every other major news outlet report it), or I would have dugg the article so I could insert it here to show you, however, the folks at Digg didn't ignore the news.

• Using Digg and The Wall Street Journal Together: Review with Screenshots
• Digg Blogg: View Wall Street Journal Online Articles from Digg

Other Relevant News

• Murdoch: WSJ.com Expected to Be Free (AP)

Are Broken and Disrupted the Same Thing?

That's a rhetorical question.  But, in a sense, the answer is yes.  At least for me.

A few weeks ago I managed to break my foot by doing nothing more extraordinary than walking on it.  I wish the story was more exciting, but I can't imagine a more dull and uninteresting way to break a foot.

There I was, packing for a business trip to Toronto when I stepped towards my suitcase and heard a loud, sharp crack, like a good-sized branch breaking, and next I knew I was on the floor in a lot of pain.

So, we went to emergency, spent about 4 or 5 hours to have a nurse practitioner confirm after looking at x-rays -- "Yup. You broke it", and then bring me a pair of crutches and a goofy looking styrofoam shoe, with instructions to see a foot doctor in the next two days.  And, for all their trouble, they sent me a bill for over $2,000.  Now, don't you wish your product or service had demand that was so inelastic that you could charge virtually anything for doing almost nothing?  That is a business in serious need of disruption!

On to Toronto

So, I got home around 2:30am, and still had to finish packing to get to the airport first thing in the morning.  You see, it wasn't just that it was too late to call anyone and postpone the trip, but it was an important strategy meeting, and people were coming from Ireland, so it would have been very costly and aggravating for everyone to cancel.  Anyway, it gave me an excuse to do what I thought was the right thing.

I'm going to skip the gory details of travelling with a broken foot that isn't in a proper cast yet, because I'm going to have another post just to talk about the incredibly miserable service I got from an assortment of airlines (not just to Toronto, but in a subsequent trip to Portugal as well), and how poorly people with a handicap are treated.  It was a real eye-opener, and I'm quite fortunate that in a few weeks, I'll be back to normal -- for many this is a permanent way of life. I had no idea how frequently the needs of people with handicaps are either simply ignored, overlooked and disregarded, or, that there's a seamy underside that looks to take advantage of people who need help.  More on that in a future post.

So, in Toronto I learned to use the crutches, and narrowly avoided a face-plant on freshly cleaned marble floors thanks to the strong arms of two guys that were walking with me. Strangely, although marble is one of the most deceptive and slippery surfaces when wet, the cleaning staff apparently didn't see the need to put out signs warning that the floors were wet.  Hmmmm.  Basically, Toronto was a dry run for what it would be like flying to Portugal the following week to do a keynote address at the International Marketing Congress.  I survived with the sponge slipper for a couple of days, and didn't break anything else, so we'd have to say that was a successful trip.  Oh yes, the meetings were good too.

And then Portugal

As soon as I got home from Toronto, we got to a doctor and had the foot looked at. Surprisingly, he too confirmed that the foot was broken and charged me an additional $360 for that information.  He wanted to put me in a full cast right away, but when he heard that I needed to travel to Portugal, he shook his head (I think in disgust and disbelief -- obviously he thought it was a mistake and that I should simply accept my fate and be immobilized for 6 weeks right then and there) and offered a temporary Air-Cast, which for all the world looks like a Robocop appendage.  See picture.  Oh yes, and another $250 in the meter for that.  Neat contraption, in that it allowed me to deflate the airbags inside and/or loosen the straps as my foot and leg swelled on the plane.  They advised me that if I didn't do this, there was a good chance my leg would need amputation by the time I got to the other side, and that was the reason not to put a proper cast on at that time.  When all was said and done, we'd spent another half an hour, and another approximately $800 for almost nothing.  Who needs the mafia when we can simply visit a doctor?

The Air-Cast did make me a little more mobile, and certainly protected my foot better than the sponge slipper, but it was truly a hulking and inconvenient thing to have to wear.

Of course, the whole point of this story was to get to Portugal.  It was my first trip there, and despite the foot, it was an immensely enjoyable visit.  The people were great, the food was great, the wine even better, the seaside was great, my hotel was nice, the culture was very comfortable, my hosts were gracious and welcoming.  In fact, the only downside was the whole airport experience.  Another industry in serious need of disruption, although not so much on the cost-saving low end -- this is already a well-served space, and the corners being cut are apparent everywhere.  Oh well, as I said, a future post.

Disruption Point

Appropriately enough, the conference title was The Disruption Point, and my keynote put forward the thought that Disruptive Innovation doesn't happen without Disruptive Marketing, using some case studies and graphed results from The Disruption Group's disruption scorecard tool.  That's something I'll be exploring here in more detail in the coming months, so I won't dwell on that now, but I thought as I was delivering my talk how ironic/appropriate it was that I was delivering a talk about innovation, marketing and disruption while I was disrupted in a wheelchair.  And, how unique.  I don't recall ever seeing a keynote address done from a wheelchair before, although I'm certain someone has at some point, if only at a conference for those bound to them. I suspect many speakers would have cancelled, but I had put a great deal of thought and effort into this and wanted to see how the audience reacted. I also wanted to go to Portugal, so the location definitely benefited the organizers.

What was especially interesting for me was to get a European view of disruption and innovation.  The growing strength and especially the single market opportunity for the EU seems to have spawned a new spirit, willingness to take chances, ambition to grow, recognition of opportunities at home and around the world.  In short, European capitalism seems to have new life and there is some great energy over there, and desire to learn and try new things. 

In contrast, the US seems to be a litte bit on the ropes in comparison.  I think we are weary of the Iraq war, the falling dollar and rising prices, especially for oil, fighting terrorism, dealing with airport hassles, the hangover from all the corporate fraud and Sarbanes-Oxley compliance, the failing mortgage market and the toll it is taking on banks and homeowners, encroachment on freedoms that we have always taken for granted in the name of "enhanced security'" (an oxymoron if ever there was one).  Basically, virtually everything is in the dumps at the same time.  We need a good recession and some political and economic housecleaning to clear out the fog and get back on track.

But, I digress.

Again, in a near future post, I will give a review of some of the other interesting Disruption Point presentations at the International Marketing Congress.  Suffice it to say that I was pleasantly surprised at the depth and quality overall. Although there were the obligatory sales pitch presentations from a few, overall this was a much more informative and well-assembled conference than I often see stateside.  I really enjoyed meeting a number of the other speakers, and I think we will stay in touch and continue to share insights.  It definitely helped build out my network some.

I especially enjoyed chatting with the president of the French National Marketing Association, Francois Laurent.  He is a crusty guy with a train of thought at least equal to the controversy I cause, as you might discern from his blog and upcoming book title "Marketing is Dead". Here's what he had to say about the conference (automatic translation to English version here). I've been invited to write a guest post on his blog, and I'm hoping he will do the same for me.  We'll let you know when that happens.

My presentation was well-received and despite the disruption, the trip to Portugal was very worthwhile.

Home of Disruption

So now I'm safely home, have a full cast on my foot, and am already chafing to get rid of it.  It's certainly no fun trying to do anything from visiting the restroom, to going up and down stairs, to getting dressed, to bathing, to going out anywhere.  As I said in a recent email, I can't believe that we can send miniature cameras inside someone's heart and do robotic surgery controlled by a doctor 1,000 miles away, yet when it comes to healing a broken bone, we still have this archaic and inconvenient 150 year old technology to fix things.  I could have arthroscopic knee surgery, or laser eye surgery, and be back to 100% in a few days, but break a bone, and your life will be disrupted for at least 6-8 weeks.

Consider me broken and disrupted.