52 Distribute and Be Damned
• Phase 2: Content (Radio, 1912–1925; Internet, 1993–1998). Consumers are established as a new class of user and production of content starts to become an industry.
• Phase 3: Advertising (Radio, 1922–1929; Internet, 1994–2001).
Consumers now form a large enough audience to attract marketers
and advertising is eventually accepted, often grudgingly, as a practical solution to the question of who will pay for content.
• Phase 4: Advertising becomes content (Radio, 1930–1949; Internet,
2001–2008). As consumers seek to avoid advertising, advertisers
blur the boundaries between content and marketing.
Buchwitz herself points out that this model should not be applied too
precisely, and that the interactions between content and advertising can
be very flexible in different circumstances, but this brief history of media
advertising draws attention to two very significant points: the first, that
digital media fits very much with consumer patterns of behaviour over
the past hundred years in that audiences rarely wish to pay the full price
(or, indeed, any price) for content if they can avoid it, and that advertising itself produced a disruption of media production at the end of the
nineteenth and beginning of the twentieth centuries.
Jonathan Taplin, in Move Fast and Break Things, observes that history is often marked by abrupt transitions, as in the Gilded Age of the
1890s when J. P. Morgan and John D. Rockefeller began their influence
of the US economy and political scene.
54
Taplin himself argues that the
current wave of digital disruption which is breaking apart the media
innovations of the twentieth century has moved from a process of democratic decentralisation to absolute monopolies, singling out Google in
particular as the company which has come to dominate a market more
completely than at any other time since Rockerfeller’s Standard Oil.
55
The term disruptive innovation was first used by Clayton Christiansen
and Joseph Bower in 1995 to describe the process by means of which
new entrants to a market could eventually displace established competitors.
56
As companies tend to innovate faster than their customers’ needs
evolve, they typically charge more for those innovations to early adopters and more sophisticated consumers; disruptive innovation comes
when a competitor – usually new to market – implements a process that
opens up such developments to the bottom end of the market, allowing
more consumers access to products or services that previously had been
limited to customers with either a lot of money or skill. By taking lower
gross margins or targeting smaller markets that are unattractive to established companies, such start-ups can take away market share. For
Christiansen and Bower, disruption is entirely normal in markets where,
rather brutally, leading companies consistently fail to stay at the top of
their industries and give way to late entrants: Xerox was replaced by
Canon, Sears by Walmart.
• Phase 2: Content (Radio, 1912–1925; Internet, 1993–1998). Consumers are established as a new class of user and production of content starts to become an industry.
• Phase 3: Advertising (Radio, 1922–1929; Internet, 1994–2001).
Consumers now form a large enough audience to attract marketers
and advertising is eventually accepted, often grudgingly, as a practical solution to the question of who will pay for content.
• Phase 4: Advertising becomes content (Radio, 1930–1949; Internet,
2001–2008). As consumers seek to avoid advertising, advertisers
blur the boundaries between content and marketing.
Buchwitz herself points out that this model should not be applied too
precisely, and that the interactions between content and advertising can
be very flexible in different circumstances, but this brief history of media
advertising draws attention to two very significant points: the first, that
digital media fits very much with consumer patterns of behaviour over
the past hundred years in that audiences rarely wish to pay the full price
(or, indeed, any price) for content if they can avoid it, and that advertising itself produced a disruption of media production at the end of the
nineteenth and beginning of the twentieth centuries.
Jonathan Taplin, in Move Fast and Break Things, observes that history is often marked by abrupt transitions, as in the Gilded Age of the
1890s when J. P. Morgan and John D. Rockefeller began their influence
of the US economy and political scene.
54
Taplin himself argues that the
current wave of digital disruption which is breaking apart the media
innovations of the twentieth century has moved from a process of democratic decentralisation to absolute monopolies, singling out Google in
particular as the company which has come to dominate a market more
completely than at any other time since Rockerfeller’s Standard Oil.
55
The term disruptive innovation was first used by Clayton Christiansen
and Joseph Bower in 1995 to describe the process by means of which
new entrants to a market could eventually displace established competitors.
56
As companies tend to innovate faster than their customers’ needs
evolve, they typically charge more for those innovations to early adopters and more sophisticated consumers; disruptive innovation comes
when a competitor – usually new to market – implements a process that
opens up such developments to the bottom end of the market, allowing
more consumers access to products or services that previously had been
limited to customers with either a lot of money or skill. By taking lower
gross margins or targeting smaller markets that are unattractive to established companies, such start-ups can take away market share. For
Christiansen and Bower, disruption is entirely normal in markets where,
rather brutally, leading companies consistently fail to stay at the top of
their industries and give way to late entrants: Xerox was replaced by
Canon, Sears by Walmart.