With a few notable exceptions, major media companies have not been known for their innovation in the digital age. After first spending years with their heads under the sand pretending that online media wouldn’t supplant their traditional business models, they have largely created defensive digital products, hoping to keep from falling behind rather than looking with a fresh eye to the possibilities of the digital future.
It’s telling that the news of the week is that of Instagram‘s sale to Facebook for a sum greater than the market capitalization of the New York Times. Does anyone believe that traditional media companies, with all of their layers of bureaucracy and ingrained culture, could have created a digital product that would grow to be as quickly valuable as Instagram, or which could have gathered as many passionate users as the similarly hot Pinterest?
The answer is no, but it’s worth examining the reasons why not, and what needs to change if these traditional companies are going to finally evolve enough to innovate and compete — and to create the kind of valuable digital properties that are springing up everywhere around them.
One way that a few organizations are approaching this issue is by working to bring digital media entrepreneurs into the fold, with in-house incubators and grants for innovation.
The Knight Foundation has long nurtured media startups. With their latest news challenge competition, Knight has adopted the Tumblr blog platform and reduced the application to a seven-question elevator pitch. The mission of the new entrepreneurial society is speed: identify good ideas, get them funded and support the business execution. Hundreds of startup accelerators like Y Combinator (here’s a list) and the burgeoning crowdfunding movement (here’s another list) make it easier for entrepreneurs to get funded in the same way YouTube is being used to filter and identify creative talent.
Michael Maness,VP of media innovation & journalism at the Knight Foundation, told me recently about a couple of notable projects to bring innovation into media, the Public Media Accelerator and the Philadelphia-based Project Liberty Digital Incubator. “We realize that entrepreneurs need a comprehensive set of resources, and are developing a new program for the next group of Knight News Challenge participants,” said Maness. “We’ll be creating camps that mirror the Y-Combinator experience, and we’ll hopefully start to see other media organizations develop vertical accelerators like Turner’s Media Camp.
“On the hyperlocal front, I don’t see accelerators for local business startups, but we’ll start seeing local media projects crowdfunded,” he said. “For example, a new journalistic venture named Matter just got overfunded on Kickstarter; it’s similar to an earlier citizen funded journalism model Spot.us, a 2008 Knight funded startup.”
Meanwhile, David Austin, the senior director at Turner’s Media Camp told me a little about what a media company like Turner can do to bring startups in-house and nurture their development: “Traditional media’s strong suit is its quality content, and they need to find the most effective ways to get that content consumed,” said Austin. “Media Camp differentiates itself as an accelerator by providing entrepreneurs with channels to well known Turner media brands, and give them instant visibility. In the long run, we expect to build Media Camps in Los Angeles, New York, and overseas, and hope to impact how media is consumed on different local and cultural levels.”
These types of efforts point the way toward plenty of opportunities down the road for media companies that are willing to take the plunge. Media executives need to accept that the world has changed and adapt accordingly, and perhaps the next generation of agile startups may not be competitors destroying their value — but rather subsidiaries creating new revenue streams and value.