Saturday, 5 October 2013

Dominance

We want to go where everybody else goes.

So I'm reading a story in today's "Los Angeles Times" about redesigning the Dodger Dog, the hot dog staple served since 1958 that has not changed a whit. Turns out the Texas Rangers have a two pound concoction and Atlanta has a hot dog with cole slaw and pulled pork, and I'm reading this article thinking the writer, Chris Erskine, has a good idea, one that could be implemented easily, but it will get no traction, because very few read the "Los Angeles Times" anymore.

The "Los Angeles Times" punted. Focusing on profitability as opposed to reach, it sacrificed its position as the voice of Los Angeles, its power is now minimal. Instead of cutting back, it should have been doubling down, like Amazon.

Bezos keeps inventing, keeps pushing, keeps reinvesting. His goal? To be the last man standing.

Pandora's problem is it's a one trick pony. Apple doesn't need iTunes to be profitable, it's just one element of its portfolio. Not that Pandora doesn't have reach today, but my point is despite all this hoopla about niche, turns out we're moving towards an era of dominance.

It's already happened in movies. The studios make fewer than ever. They've closed their indie divisions. All they want is blockbusters. Know why? That's all the public is interested in seeing! Despite all the boomers saying there's nothing to see, the truth is they don't go, they'd rather stay home. Which is one of the reasons we're in a new golden age of television.

But it's not only in movies, but music. We know who Miley Cyrus is, to the point that even Sinead O'Connor and Amanda Palmer are weighing in on her, but we don't know much more than the Top Ten, because that's all most people are interested in.

It's human nature. We want to feel part of society. We want to be able to go to a party and have a conversation, we want points of commonality, and the enterprises that figure this out will win in the future.

That's what troubles me about Apple's upscale mobile phone strategy. Once you start leaving people out, you're on the road to niche-ville, which can be very profitable today, but can be a disaster tomorrow. Mac sales were not going anywhere until the iPod gained traction. If Apple comes up with a new killer product, the company will continue to soar. Without it, it's a death spiral.

Take Google. It's the only search engine. There's no need to go anywhere else. Google understands dominance.

Apple used to too. That was the key to the success of the iPod. It was the ONLY music player.

In other words, the jump from the minor leagues is bigger than ever. If you're a profitable niche act, and you're happy, more power to you, but if you want to go mainstream, if you want everybody to be aware of you, that's a much bigger hurdle. In other words, while you sit at home railing against the state of pop music, saying this and that band is better, it proves you don't understand the game. Sure, some people want to go to the small show, but most want to go to the big one, with the major act, which is one of the reasons the club business has died.

If you don't strive for dominance and maintain your position, you're doomed. Credit Facebook, it's the dominant social network. It keeps reinvesting. It doesn't want to be left behind. It purchases Instagram. It keeps integrating elements invented elsewhere. It strives to be the only place we want to go, because our friends are there!

And just like the iPod, maybe Facebook is not forever, or ultimately its features are subsumed by another entity.

But my point is we're in an era where we're gravitating to the bigger and bigger, those playing for all the marbles.

And the public wants this. Because it makes the world coherent, it makes people feel connected. It makes them happy.


--
Visit the archive: http://lefsetz.com/wordpress/
--
http://www.twitter.com/lefsetz
--
If you would like to subscribe to the LefsetzLetter,
http://www.lefsetz.com/lists/?p=subscribe&id=1

If you do not want to receive any more LefsetzLetters, http://lefsetz.com/lists?p=unsubscribe&uid=0eecea7b60b461717065cbde887c8e25

To change your email address http://lefsetz.com/lists?p=preferences&uid=0eecea7b60b461717065cbde887c8e25




--
Powered by PHPlist, www.phplist.com --

No comments:

Post a Comment

Note: only a member of this blog may post a comment.