Commentary

Printing Presses and Open Hearth Blast Furnaces

Today I am in Mexico City, preparing to address the IAB Mexico's annual convention. Yesterday, I had breakfast with folks from Activ@mente, Mexico's largest interactive ad agency, and a number of their top clients, regional marketing executives from P&G, General Motors and AeroMexico.

I had met the agency's founders, Gustavo and Ana, 10 years ago, and few people anywhere in the world knew what to make of online advertising. The breakfast was a real treat. We spent two hours talking about how online advertising is developing in the U.S. and what lessons we might take from it to better understand how the industry could develop in Mexico.

During the course of the discussion, as we were talking about the challenges that online is presenting for traditional media companies, I was asked what I thought about the future of mass media. I responded with a story about where I grew up -- a small town called Clearfield, in the mountains of Western Pennsylvania. It had a population of about 8,000 and to find any neighboring town bigger than 1,000, you had to drive an hour to a place called Altoona.

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As someone who now lives in Manhattan, I can safely say that it was in the middle of nowhere. When I was born, the town's economy was very strong. The county was one of the largest producers in the state of soft coal to make coke for the steel industry's blast furnaces in Pittsburgh. A special kind of clay was used to make firebricks to line those same furnaces. Since the 100-year-old design of the furnaces burned a lot of coke and had to be "re-lined" with new fire bricks every six months, folks in Clearfield were doing well. The mines and the brick factories employed thousands. In the 1960s and early '70s, steel was a major economic driver for Clearfield.

Things changed quickly. The open-hearth blast-furnace method for producing steel, which was so kind to Clearfield's economy, was falling out of favor with large customers of steel, like automakers and constructors. It was expensive, inefficient and produced raw steel when more and more customers wanted finished steel products, steel sheets or rods or beams. When the old steel companies didn't change, they went away -- and so did hundreds of thousands of jobs, including many in Clearfield and towns just like it. It wasn't because demand for steel went away. It didn't. Steel consumption actually went up. But customers for steel shifted their business to modern steel mills in places like Japan, Germany and Mexico. They said goodbye to the furnaces of Pittsburgh and Bethlehem, Pa.

What does this story have to do with mass media? Everything. I don't think that print or video or audio media is going to go away. Quite the contrary, I think that consumers are going to want more of it. However, the production methods and business models employed by most mass-media companies today seem too much like open-hearth blast furnaces and one-size-fits-all steel ingots -- and nothing like the highly efficient, electric-driven mini-mills that now produce most of the world's steel.

Printing presses, one-size-fits-all newspapers and 30-second broadcast TV spots can no more survive than could those monster open-hearth furnaces with all extraordinary flames. People that run them and produce them might love them, as do their vendors and suppliers and agents, but their customers are going away. They are finding more "finished" and relevant and efficient and effective media products that better meet their needs. What worries me? I don't worry too much about the mass-media companies. They control their own destinies.

Some day, they will realize that they are in the media business, not the printing press or broadcast tower business. Instead, I worry more about the eco-systems around them. I suspect that much like what happened when the U.S. steel industry collapsed, lots of folks working in ancillary businesses -- the Clearfields of the media industry -- will suffer, too. In fact, by the resumes that cross my desk, I am not certain that it isn't happening already. What do you think?

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