Michael Kinsley had a piece titled “The Front Page 2.0″ in Vanity Fair’s May 2014 issue.
While it is a nice read overall, what struck me was the part about how NY Times chief wanted to position the newspaper in an era of blogs and digital publishing proliferation. Here is the section that is extremely relevant for the disruptive innovation thinking:
In a couple of recent speeches, the C.E.O. of the New York Times Company, Mark Thompson, has suggested that the high quality of the Times’s content—the very quality that alarmists claim is becoming unaffordable as a result of bloggers and other cheap competition—will be the paper’s salvation, because people will pay real money for it. (He cautions that the Times is sui generis and that this high-quality strategy won’t work for ordinary, run-of-the-mill papers such as . . . any paper other than the Times.) With admirable, or possibly insane, frankness, he says the Times’s intention is to reduce reliance on advertising and to squeeze its most loyal readers as much as possible to pay for the content they consume.
See what is coming? Disruptive innovators enter a market from the low end. The incumbents respond by securing the highest-end of their customer base. Christensen lets us imagine how incumbents communicate internally when they discuss the innovator’s threat. Let’s satisfy better our most profitable customers. Let the innovator capture the lowest end. Those customers are not bringing that much profit anyway.
It is clear how the story goes on from here. Innovator captures the lowest end of users, and improves its offering to allure the next tier. And the next. Then the next. Eventually, the most demanding, most profitable one…
NYTimes CEO’s remarks are right on spot to become a disruptive innovation case study in business schools.