Innovation in Media

The creation of Deseret Digital Media reflects a broader change happening in the traditional advertising and media marketplaces across the country. As you get to know our team members, you will quickly realize that they reflect an entirely digital worldview. We have team members who worked on Yahoo!’s original e-mail launch, pioneered AOL’s global outreach services, expanded Omniture’s Web analytics products, created the only in-market classified product to beat Craigslist, and helped develop Overstock.com’s pricing and e-commerce platforms. There is no question that we are a new media company.

Moreover, our president spent nearly 10 years at the Harvard Business School helping traditional media companies navigate the disruptive change created by the Internet. The theory of disruptive innovation is quite simple from outsider’s point of view, but extremely counterintuitive if it is happening to you.

The core idea is that companies innovate on a trajectory that sustains their traditional business. A disruptive innovation starts in a place that initially looks unattractive either because the business model is different or because the company’s traditional customers don’t originally find value in the disruptive innovation. Accordingly, new companies enter by finding a foothold customer outside of the traditional market before moving up-market and eventually attacking the industry leaders. Examples include bookstores, printers, computers, photography, retailing — and all forms of media.

The historical response of industries faced with disruptive innovation is not encouraging: less that 10 percent of established firms successfully capture a disruptive growth market. However, where success has occurred, these traditional firms have almost always set up a separate group to focus exclusively on the new innovation. Examples include IBM launching the PC outside of its main computer division and Hewlett-Packard separating out the ink-jet division from the laser printing division.

This is why we have created Deseret Digital Media as a separate division with a family of traditional media companies. Our sister organizations have leading brands and successful positions in their traditional marketplaces. They will continue to grow those positions. However, if we were going to successfully embrace Web marketplaces, we knew we would need a focused digital group. In fact, in a study of more than 100 local media markets, 100 percent of the Web sites that achieved 40 percent or more market share within their markets had separate Internet groups. You should feel confident that when you work with Deseret Digital Media, you are dealing with a team entirely committed to digital products. But even as we set up Deseret Digital Media as a separate group, we established cross-ownership ties to the other divisions. This allows each of our sister organizations to share in our growth, but lets us build a focus entirely on a digital future.

Despite the concerns of traditional organizations, disruptive innovations actually create new growth. More people buy printers because HP set up a separate group around the ink-jet technology. There are more songs downloaded, more books sold, and more movies distributed because of disruptive innovations at Apple, Amazon.com and Netflix.

Similarly, we hope to grow the reach and impact of our sister organizations in ways that would have never been possible before the Internet. Here are several examples: Deseret Digital Media works with thousands of advertisers on KSL.com who do not advertise on radio or on television. DeseretBook.com reaches hundreds of thousands of customers who do not live near a Deseret Book retail store. And more than half of DeseretNews.com’s users come from outside the state of Utah. Disruption can create threats, but it also creates wonderful growth opportunities!