A & B Businesses And The Media

There are A Businesses that have customizable features - but they are extremely limited. For example Dell Computers added value to their product line in the 1990's by offering "custom computers". Dell did this by using point of sale data to determine how many of each possible customization consumers would want and built those in anticipation of projected demand - but Dell only offered a limited number of "custom" computers. A true B Business computer seller would build a personal computer from the ground up and maybe install specific software requested by the buyer - or even paint pinstripes on the case.

Mixing A Business models with B Business models is a recipe for disaster. For instance, in the early 1990's McDonalds attempted to compete with Burger King's "Have it your way" campaign by offering customized Big Macs. To understand the impending disaster, we should ask the question, "What's a Big Mac?" The answer: "Two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun." You can sing the ad, right?

When McDonalds decided to customize the Big Mac, they not only fought against their own advertising, but they had to completely retool thousands of kitchens - their production lines - so that customized Big Macs could be made. Many franchisees opted out of the new custom Big Mac, confusing customers, and in most of the stores where custom Big Macs were offered, the retooled kitchens and new staff training was inadequate. The new product failed, McDonalds went back to the one-size-fits-all Big Mac, and lost tens of millions of dollars on the promotion.

Moving from B to A can be just as treacherous. The most common example is of restaurant concepts that attempt to grow through franchising. While one or a handful of similar restaurants can be successfully managed by one demanding manager or chef to provide high-quality service, when restaurant concepts expand over large distances, they require specific operating protocols for everything - from how silverware is arranged on a table to exact proportions of ingredients in a dish for when the manager is away. What happens if the great dinner rolls aren't presented warm at every franchise? Variations open up possibilities for customer dissatisfaction and thus fewer repeat customers.

Applying A & B To Media Businesses

The disruption washing across media businesses can be directly tied to how media companies are distinguished as either A or B Businesses. For hundreds of years media had been an A Business. Printing presses were expensive, as were broadcast towers and audio and video equipment. Consumers were limited to the few organizations that could scrape together enough capital to buy the mechanisms needed for media distribution.

The internet's arrival changed all that, since media distribution through websites is now virtually free to anyone with a computer and an internet connection. Because the barrier to entry into the media business has dropped, it has become cost-effective to create highly customized media offerings - with blogs being the cheapest and most common offering.

Now, ask yourself: What kind of business is the Chicago Tribune? A or B? The print version definitely seems like an A Business. But what about the website? The main site seems A. Chicago Now seems like a bunch of B sites. Then again, all those Digg buttons, customizable alerts, somewhat geographically targeted news and the "You might like" box at the bottom of each article web page seems kinda B.

So which is it?

The consumer pressure for customization on the Chicago Tribune is highly evident through its pulled-in-multiple-directions website - and then even more evident when you look at its declining print product circulation numbers.

Daily Chicago Tribune Paid Circulation

From Chicago Tribune press releases.