Owning the Turf
Marc Andreessen is a pretty smart guy. He has accomplished all kinds of stuff including being the founder of Netscape Communications Corp. I stumbled upon an interview with Marc at a Portfolio magazine blog.
There is nothing quite like continued brilliance, and this guy has it in spades. Consider his frank statement on the future of The New York Times.
If you were running the New York Times, what would you do?
Shut off the print edition right now. You've got to play offense. You've got to do what Intel did in '85 when it was getting killed by the Japanese in memory chips, which was its dominant business. And it famously killed the business -- shut it off and focused on its much smaller business, microprocessors, because that was going to be the market of the future. And the minute Intel got out of playing defense and into playing offense, its future was secure. The newspaper companies have to do exactly the same thing.
The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you're one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90 percent of your revenue. Then you play offense. And guess what? You’re an Internet company.
Is this actually possible? Well, he made this statement well before the Christian Science Monitor did almost exactly as he suggested. That is amazing. I'm not suggesting you do anything crazy like follow his advice, but what if he is correct? What if the publishers who own a particular part of the information distribution turf did as Marc suggested? What if we turned off the press and went digital years before our competitors? Perhaps all you really need to do is buy into the fact that eventually we are all going to get there. If you can get past that hurdle, then it is only a matter of time. And if it is only a matter of time, it would behoove you to be there first.
I'm not sure of this radical newspaper proposition for magazines, but I do believe in owning the turf outright. I once published a unique title that was clearly the best in its field. I started to have competitors and we made an interesting business decision. We started our own second magazine to compete with. It was the second-best magazine in the field. After a while, all the competitors fled the area and we were the only ones left standing. Soon after we shut down the second title. We owned the turf.