Remember Kodak? Those in my generation certainly do because they were the powerhouse, the Microsoft, the IBM, the GM of pictures. They had the entire world at their hands in the area of photography and film. Being and early passionate SLR photographer (still have my old manual Nikon SLR) they were the Gods of photography. You only bought their film and they were trusted. They owned the market…
For a variety of reasons, they are all but gone today. Digital blew by them like a tornado in the Midwest or the hurricanes in Florida…they were left shattered and tattered. What happened? While I don’t profess to know the inner workings of Kodak’s decisions, from a bystander position, they couldn’t migrate from their “cash cow” business model to a different “leading edge” financial model…not without cannibalizing their revenue streams. So in this case, they were basically making a decision to become extinct.
I liken this to the newspaper industry and many of the current advertising agencies of today. They have built their “cash cows” on old or dead methods for deriving revenue. Newspapers discounted and ignored Craigslist…we know where that left them. Predictions are virtually every major newspaper will be gone in a few years because they couldn’t adapt to a new way of deriving revenue from a changing market…their classified advertising died.
Are advertising agencies any different? Are they going to be victims of extinction because the can’t (or aren’t) willing to change their old model? I believe so. Their model has been designed around helping companies advertise and act as the creators and aggregators of this advertising budget (usually a big number). But where are they advertising? Most are still advertising in media that is either dead or rapidly dying. So as their “ad recipients” start to go away (like the newspapers and magazines have) how will their model survive? Why will companies spend billions on declining numbers? They won’t…
There is a future for them, however, if they are willing to recognize they are the Kodak’s of the world and need a new model…even at the expense of killing the cash cow they currently have. Those that can strategically react, probably severing much of their existing revenue, and rebuilding in a new era that actually helps companies increase their brand and awareness will survive and thrive. To the rest…they will still be wondering why no one buys film any longer.
