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  • 04.04.11

Outraged! Will The New York Times Avoid Blockbuster’s fate?

Through the Internet our consumer culture evolved to expect a vast selection of stuff that is fast and free. The New York Times has finally introduced digital subscriptions, while companies who have been culturally inagile are continuing to go down, one of which, Blockbuster, is being auctioned Monday.

The
New York Times
has finally introduced digital subscriptions. It’s well known
that an orgy of free news available via the Internet has been killing
newspapers. Now the Times is finally catching up with a major cultural
shift.

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Many
readers who became accustomed to having the national ‘Newspaper of Record’ at
their fingertips are outraged. While it
was free, the Times‘ reporting became a public good that is now being taken
away. Before the Internet we wouldn’t
expect to receive a newspaper for free, but our culture changed. Through the Internet our consumer culture
evolved to expect a vast selection of stuff that is fast and free.

The
Financial Times rightfully calls “Cultural Agility the new competitive edge for
today’s global organizations.” They
define cultural agility as “the ability to understand multiple local contexts
and work within them to obtain consistent business results.” Where the ‘Pink Un’ gets it wrong is that
they’re stuck defining culture as being across boundaries.

Culture
describes the common attitudes, values and behavior of any group. The Internet changed consumer culture without
anyone getting a passport stamped. Consumers
were lured to the Internet through goods and services that were free or lower
cost than from brick and mortar retailers.
As a result consumer expectations changed, possibly forever.

Of
course, slashing prices only worked with the appropriate business model. Companies who have been culturally inagile are
continuing to go down. Two most recent
examples are Blockbuster and Borders.

Blockbuster
was culturally inagile by remaining a customer service follower. It’s online
competitors changed the culture of movie rentals by offering them with no time
limits. Blockbuster instead clung to an
outmoded, even arrogant, overdue penalty that eroded customer loyalty when it
was most needed.

As
online competitors began streaming movies instantaneously, the behemoth lost
the only competitive advantage it had retained through its expensive retail
presence. And with that it lost the
battle to survive.

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A
lack of cultural agility also played a major role in Borders’ bankruptcy
because it’s customers adapted to changes in technology far more nimbly than
the bookseller did. Borders’ sales
plummeted because it never effectively engaged in online sales and failed to
develop a competitive e-book reader. In contrast, the culturally agile
Barnes & Noble enjoys soaring online sales to new customers lured by its
NOOK e-reader.

In
both the cases Blockbuster and Borders, the companies forfeited the cultural profit
that can be achieved through cultural agility.
In fact, their cultural inagility contributed directly to their failure.

The
New York Times
is a business. It faces
rising expenses and falling advertising income. Personally, I’m happy
that they’re moving toward digital subscriptions. I was one of those loons who paid for the
Times‘ OpEd subscription years ago as a way to do my part. Yes, I also donate
to NPR.

Of
course, the digital subscription’s pricing it a tough one. Going from $0 to $200 for an annual subscription
is a very significant leap, and we’ll see if they can pull that off.

Many
people are genuinely outraged because they have become entitled to free quality
journalism. The companies who offered so much for free on the Internet changed
our cultural expectations as consumers.
Over the past few years these companies are attempting to change
consumer culture yet again.

We
were asked to be agile in embracing the Internet as a retail venue and we were
for a price. Now we’re being asked to be
agile again, although as the Times well knows, it’s certainly easier to give
than to take away.

About the author

Leaders rely on Michelle as an ally because she understands their world like no other consultant. Her clients call her their liferaft, because they have otherwise felt alone in a sea of people.

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