In seeking to understand the value of your business you put a cash value on the barriers to entry. But which are the truly hard barriers that a customer will value, and which are you just counting on being tricky because they’ve served you well in the past?
A telecoms company with wire in the ground has a high barrier to entry — anyone wanting to compete has a vast investment to make. A juice vendor selling pressed orange juice on the street corner has almost none.
In the media sector most of the barriers have been crushed, shaken or in some other way agitated. The music business used to make a living as an A&R department backed by a great big bank. Now the A&R is ‘outsourced’ to social media, and the bank is a lot less big than it was.
Or a broadcaster was a reputation badge that drew sufficient audience to attract advertisers to fund its commissioning.
Or a newspaper was collected and distributed news. The barrier to going out and finding the news used to be high. So was the barrier to getting it to people that wanted to read it.
Barriers to entry are those things that are hard. It used to be hard to find out what was going on, or to know what music people liked, or to show advertisers how valuable you are. But it’s not any more.
The new barriers, I think, are the same as they used to be, just more easily viewed as behavioural barriers instead. Conducting a thorough competitive landscape review doesn’t just look at those competitors who are offering the same thing as you; it looks at those activities and behaviours that are competing for your customers’ attention.
The behaviour I want as a music fan isn’t merely to have it delivered to me. That’s easy. (Or, at least, I think it’s easy which means it has a low perceived value, so I won’t pay much to a company that does only that.) The behaviour I find hard is finding good music. Music I like. And to know that you need to know me.
The behaviour that’s hard in news vending isn’t collecting and distributing it. Google Trends will do the first, and about a thousand sharing tools will do the second, and both free to the consumer. What’s hard is sifting the important stuff from the dross. And to do that you need to know my tastes and preferences.
These are the instincts of the editor. The editor is important. The editor does what is hard.
Media companies looking at the long term shouldn’t be trying to prop up their existing barriers (although I do recognise that it may be necessary in the short term because everyone’s got to eat, right?) Media companies should be looking at the behavioural demands they fulfil in their potential audience that are genuinely hard to beat: reputation, audience understanding… whatever you have that is genuinely valuable.
Put a value on that, and give everything else away for free.