When a business or industry is losing revenue, I often find there's a pretty huge blame game that goes on; especially in the age of disruption of traditional business models. Many times these can miss the mark. When something changes there is some pain involved, and that pain is usually not solved. You can never really go back.
Today, Apple announced a new initiative called "Apple News +". One of the features of the offering (it includes magazines and the L.A. Times as well) is a subscription to the Wall Street Journal.
"It [partnering with a tech company] will enable us to get our journalism in front of millions of people who have never paid for journalism before." said WSJ's publisher.
There is risk - the WSJ monthly subscription, of which they have 1.7 million subscribers, goes for $39 a month. The Apple deal is nowhere near that - it's $9.99 a month for a host of publishers - so the potential revenue cut is real. Also, rumor has it that Apple will retain 50% of the revenue, as a reseller.
The WSJ believes the value lies in broadening the tent in readership, so they have a chance at a vibrant future, in an ever-changing landscape. This has been a tough week for journalism, but it's pretty good news that in response to the new partner, the WSJ has hired fifty new editors and writers.
When we compare their strategy to racing's in the age of ADW's it's pretty much a 180.
ADW's don't take near 50% of the revenue to put your races in front of their customers, but we often hear how they're pirates, and the model is broken. Every fiber of the industry wants more of a cut. It's a constant complaint.
We often hear about racetracks not selling their signals to ADW's because they want these existing customers for themselves.
We hear about racetrack ADW's being better for the sport, because there is an off-chance more revenue will come from existing customers.
We hear about cannibalization of existing customers when or if someone wants to offer a new service.
Notice the difference?
The Wall Street Journal is talking about getting their product in front of "millions of new people" in a quest for growth, and is willing to partner and take less of a share as risk. All racing seems to be worried about is existing customers (I used that adjective three times above), and that they get too little of the pie.
There's a difference between the current state of racing and publishing, that's certain. However, the broad point I believe is strong. When you are trying to expand a tent in the new gambling and technological age, you won't do it efficiently by yourself. If you try to do it alone, everyone is left fighting for the same customer, and your product, your R&D and offering struggles.
Asking for 50% of a falling revenue number every year still results in falling revenue. It's especially a problem when you have no real hope of growing.
Have a nice evening folks.
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