My desk was overrun with undone professional chores and everyone in the family but me was sick so I did the only thing that made sense this weekend: I spent many hours whacking weeds, pruning bushes and trees and reducing the chaos in my garden. While so doing I mulled how the economic concept of “creative destruction” is playing out in the media transformation now underway.
The term was coined by economist Joseph Schumpeter in 1942 ( Wikipedia) when he wrote that :
“Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in … “
Schumpter would have reckoned me a good garden capitalist as I shoveled up the leaves that had fallen into such a thick mat that they’d already become partially composed. I lavished this dark brown protosoil on my future tomato bed, and if the blade of the shovel chopped the occasional earthworm into two squirming halves, well that’s no reason to pause because ultimately, the destruction is for a good cause — in my case, a richer tomato harvest come summer.
The data suggest that creative destruction is underway in media. Consider advertising revenues, which I have elsewhere described as the bread, butter, jam and mother’s milk of media. If you look to page three of Universal McCann’s December 2005 report on advertising expenditures you’ll see that the four TV networks and newspapers together took in about $24.6 billion in national advertising last year, up less than 1.5 percent from the prior year. Internet firms had $7.8 billion in national ads, a 15 percent growth over 2004. In a spreadsheet I projected the 2005 trend forward. At the 2005 rate the Internet surpasses network television and newspapers in 10 years. (I should point out that Universal McCann makes no such projection; I urge you to print out their report as it is chock full of facts such as total U.S. advertising was 2.2 percent of GDP in 2005, and of this there was a roughly 60-40 split in favor of national advertising.)
So let’s assume creative destruction is underway in media. What harvest should we expect from new media? Tomorrow I’ll think about what the recently concluded Consumer Electronics Show suggests in this regard.
‘Cause if you ain’t Mass Media, you’re Mini Media