From the Editor: Ignore the Periphery At Your Peril
Never let it be said our columnists can't see the forest for the trees. In this issue, our contributing arborist, D. Eadward Tree, offers a frank assessment of the threat facing traditional magazine publishers. According to Mr. Tree, it's not the Zites and Flipboards of the world releasing magazine-like products on the iPad, nor hoary tech behemoths such as AOL and Yahoo pushing further into the content space. It's the "reasonably talented, technology-enabled part-time outsider," unaware or unconcerned with old publishing conventions, willing to meet evolving audience expectations about how and when content is delivered.
Some might call this crazy. After all, expertise—and capital—matter more than Web savvy, right? The most successful publishers today are leveraging well-known brands, not sitting on the periphery poaching followers—right?
It makes one wish they could consult a world-renowned economist. As it happens, advice on business development and strategy was in the offing recently at the Yale Publishing Course from Richard Foster, a senior faculty fellow at the Yale School of Management. Foster presented an analysis of historical market cycles and what they mean for publishers, turning dry numbers into a scintillating tale of the rise and fall of major power players over the decades.
Capitalism, Foster said, is at its core a process of "creative destruction" driven by new technology and competition. Understanding this dynamic can illuminate "warning signs and mistakes that confound executives because they misread what they are seeing in the environment."
Like their counterparts in other industries, publishing executives often look for threats in the wrong place. Over the last 20 or so years, "Core competitors in the magazine business … beat each other's brains out to acquire each other," Foster said, while on the periphery there were hundreds, if not thousands, of tiny start-ups getting ready to revolutionize the industry. "If you want to see the future, you look at the periphery," he stressed. "Do not look at the core. The periphery will tell you what's going to happen."