Why Local Media Companies Must Practice ‘Self-Cannibalism’

Exploration in the 17th century was mostly about profit, and this was especially true with the first English settlers who arrived at Jamestown in 1607. They built Fort James for the Virginia Company back home, a company originally formed to gain riches from the New World. Sometimes, however, the pursuit of profit runs smack dab into life and death itself, and this is what happened at Jamestown.

Last week, science proved that these people practiced cannibalism in order to survive what’s known as the “starving time” during the winter of 1609-10. The announcement — via USAToday — came from Jim Horn, VP of research and historical interpretation for Colonial Williamsburg:

“The ‘starving time’ was brought about by a trifecta of disasters: disease, a serious shortage of provisions, and a full-scale siege by the Powhatans that cut off Jamestown from outside relief,” said Horn, “Survival cannibalism was a last resort; a desperate means of prolonging life at a time when the settlement teetered on the brink of extinction.”

Mr. Horn told USA Today that verbal or written attacks on the Virginia Company often included reports of cannibalism, so rumors of the practice had always been there. Research on the remains of a 14-year old girl are conclusive, and we can now say with certainty that this was a practice of the settlers, at least during that dreadful winter.

One can understand such a situation and admit that perhaps, if it was absolutely necessary for survival, we, too, might participate in such a terrible practice, but there is a line beyond this horror that even fewer will cross. Self-cannibalism is the practice of eating oneself, and in business it also can become necessary for survival.

Gordon Borrell, the local digital revenue guru who, coincidentally, lives in Williamsburg, has been watching as local media companies have been feeding off the bones of their dead or dying companies. “There are certain parts of any media company’s body,” he told me, “that are not only quite tasty, but so nutritious as to help them survive the Great Digital Starving Time.” For media, the shift to digital is not only well underway, but new Borrell data reveals that a few companies are doing rather well. While local newspapers lead the way in digital revenue, the graph on the right reveals the Great Digital Starving Time.

“If yellow pages can’t jump into the search business (cannibalizing their print “search” product), they’ll become much smaller entities and perhaps become extinct,” says Borrell. “If newspapers can’t provide some amount of content for free, they’ll lose a huge chunk of audience. And if broadcasters can’t cannibalize their 6 o’clock news audience by providing that exclusive video online for people who missed the news, they too will lose audience.”

“A certain amount of cannibalization is advisable in these times. The trick is to know how much. I could make a great case for newspapers charging for local news content on the web to prevent cannibalization of their print circulation — and I’d win that argument. But there are other things (like ‘free’ classifieds) that need to be cannibalized from print in order to hold onto the business. So newspapers ask, ‘How can I make money from free classifieds? That’s crazy!’ The answer is, of course, ask Homes.com, which made $200 million last year off that model, or Craigslist, which made $120 million.”

Market cannibalization — the kind that Gordon describes — is something we should be willing to do. Steve Jobs launched the iPod, because he knew there would be a demand for a device with the cool iPhone stuff but without the phone, and rather than give that market up to someone else, he released the device himself. When asked why, he offered these famous words: “If anybody is going to cannibalize me, it’s going to be me.” The markets for video and printed news delivery are most definitely being cannibalized, but it’s not being done by the people who’ve owned those markets forever, and therein lies the problem and danger.

The reluctance to autocannibalize is precisely why we must have the flexibility and courage to launch separate products with separate staffs to compete with ourselves. The separation must be so complete as to include authorization to kill the mothership, if that’s necessary. It’s precisely this lack of separation that destroys creative opportunities for existing media companies and hands them over to outsiders — those businesses who don’t employ local people, don’t pay local taxes, and don’t participate in the local community chest. Much more is at stake during this Great Digital Starving Time than just how well existing enterprises survive.

This is why instead of protecting our products, we should look instead to protecting our customers, their experiences, and our relationships with them. Never begin a discussion about the future with a focus on our products or services. What does the customer want and need, even if our existing products are not a part of the answer? The world is changing and it begins with empowered consumers.

Mostly, don’t let individuals in our companies protect themselves at the expense of this customer focus, even if it’s the CEO and his or her personal bank account. Corporate malfeasance today includes the defining of business based on products made instead of customer need (or demand). Many will pass away during the Great Digital Starving Time.

Will you be one of them? Or will you see the wisdom of cannibalism, sacrificing the short term in favor of sur(thrive)al?

Terry Heaton is President of Reinvent21, a consulting company specializing in business reinvention for the 21st Century. He’s an internationally-recognized creative expert on all things web-related, especially as they relate to local media.