ethanbeute

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Disruptive Innovation: Clark Gilbert and Deseret Media

As a business, television is obviously being disrupted on at least two sides.  On the viewership side, lifestyle and technology changes mean less and less appointment viewing (and commercial watching).  On the revenue side, pure play internet companies with wholly measurable and cost effective solutions are creating far more competition for local advertising dollars.

In the face of this, I’m fond of saying that people will always seek and find great content and money will always seek and find people.  There are, however, several significant distribution, cost structure and business model hurdles standing in front of traditional broadcasters and publishers.

Where do you look for ideas and inspiration when in need of new business models due to fundamentally disruptive threat in and around your industry?  Perhaps to a former Harvard Business School innovation and entrepreneurship scholar who’s since gone real world.

The keynote address below was delivered by Clark Gilbert, president and CEO of Deseret News and Deseret Digital Media, at the Borrell & Associates Local Mobile Advertising Conference last September in Dallas.  I’ve watched it a few times and decided to give it the same treatment I gave a month or two ago to an excellent presentation from Gary Vaynerchuk of WineLibraryTV.com and VaynerMedia.

Based on his involvement at Harvard and in the Newspaper Next project, Gilbert makes two fundamental points about disruptive innovation.  First, only 9% of companies in disrupted industries survive the shift.  Let’s be generous and double that; still, fewer than one in five traditional broadcasters and publishers will survive if historical trends hold.  Second, a necessary precursor to that survival is the establishment of a separate division, physical location, profit/loss statements, sales team, content team, technology team, etc.  The teams should include a significant portion of “outsiders” to the traditional, disrupted industry.

Walking the talk, Gilbert now heads up the newspaper, radio, television and digital operations of Deseret Media, which is owned by the LDS church.  Certainly, the Mormon connection provides several advantages, like an automatic, worldwide audience that trusts you implicitly.  Regardless, he provides a ton of excellent insight in this presentation.

Because it’s a local mobile advertising conference, Gilbert covers well SMS, mobile/geo and deals programs.  In addition, though, he covers his entire turf, including the insanely well-trafficked KSL.com, among other properties.

One of the more interesting themes that runs through his full presentation is mindset, semantics, framing – changing the way you talk about something in order to change the way you perceive, understand and think about it.  Listen for key phrases that he repeats to help re-frame things toward a new perception or understanding.

I highly recommend the full version, but I can only embed here the 5-minute highlights edit posted to YouTube:

Borrell used this nice content tease on YouTube to drive traffic into his site for the full presentation, which can be seen here.

Here’s a content breakdown, so you can choose an appropriate in-point, should your time be limited:

1:20  The Newspaper Next project – how disruption happened in the past, historical look, put in context of newspapers

4:10  Gilbert starts, gives up on newspapers/media, refusing to learn, 10 years of communicating same message

6:10  Digital assets – what’s under his control as CEO of Deseret Media

6:45  Parallel story of disruption in another industry (mainframe, minicomputer, personal computer)

9:30  Waves of disruption, historical media trends

10:50  Empirical evidence that’s overwhelming, inarguable and irrefutable – in the face of a disruptive threat, you must have a separate division, location, p/l, sales force, content teams, etc.

12:00  Success rate of responding to predictive threat is 9%

15:30  Red Sox Nation effect – what the web allows

17:15  KSL.com stats

18:15  How he built his team

19:30  Strategy is never more than 49% of the solution

21:30  Symbiotic relationship between trust in news product and relevance in online marketplace – driving traffic

23:30  SMS – old technology, standard across platforms, local market spend forecast

26:00  Self-serve model beneficial and NECESSARY

29:00  “Deals” strategy, why you must have one

31:10  Why disruptive technology isn’t disruptive to customers who adopt it

33:30  Why Groupon, LivingSocial and other deals advertisers are vampires or leeches

39:15  Private labeling their deals program

40:00  Only legacy asset he inherited … brand trust

42:45  Why they’re selective about deals partners – don’t take all comers – elements of good partnership

45:30  How Google ruined relationship selling

48:00  Organizational structure required to live through disruptive innovation

49:45  Q&A starts

50:10  Groupon, fund raising and brand building

53:30  TV versus radio in driving subscribers to deal signups

55:00  How the sales team is organized

56:45  Cannibalization of other digital products by deals products? No Traditional media obsesses here

58:00  Digital content production – traditional journalists’ inability to decouple story telling from medium

01:00:00  Ramping up investment in digital media

01:03:30  On trust

01:05:15  Elements, factors and design of partnerships between 3rd parties and media properties

01:09:30  Optimism for media companies

Again, I highly recommend viewing the entire piece.  I’ve done so several times.

If you’re inclined, please share here anything you enjoyed, disputed or wondered about Gilbert’s presentation.

1 Comment

  1. Ethan,

    Great post, thanks for the links, I’ll be watching the whole thing on my 12+ hour flight home tonight from HNL, all business, no pleasure this trip.

    Not sure if you follow Om Malik, but thought you might like to see his post on the same topic http://gigaom.com/2011/02/23/old-media-is-being-unbundled-just-like-telecom-was/

    His final thought matches up pretty well with Gilbert’s (ReFrame Theory)he calls it (ReImagine)

    “Perhaps it is time for the media industry to come to terms with unbundling and re-imagine the definition of media. If it isn’t the medium, then what is it?”

    Whatever you call it, it’s like a 12 step program, first you have to hit bottom and admit you have a problem.

    Print is near the bottom but still very stubborn, Broadcast is still making money, 16 recent articles on Group earnings were all in the 20%+ growth range so will they really give it the ReFrame/ReImagine/ReWork that it needs to succeed and lead?

    Gilbert says SEPARATE DIVISION with Outsiders, not just a web dude down in the basement, how many will do that, it’s a big leap and the horse they’re on still has some legs, you might want to stick with his 9%.

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