According to well-known theory of scientific revolutions by Thomas Kuhn, science advances through scientific revolutions. During periods of normal science the majority of science community accepts the rules of the ruling paradigm, but when the amount of anomalies — evidence not in accordance with the ruling paradigm — grows high enough the science is led to a crisis, which later leads to scientific revolution. Scientific revolution leads to a new paradigm and a new normal science. Originally Kuhn intended his theory to explain just the progress of scientific theories, but his theory has later been used to explain developments in all kinds of realms of human experience.
Using Kuhn’s terminology we could say that business — and especially media business — is currently undergoing crisis caused by new means of communication and information distribution made possible by birth and growth of Internet. Economics used to be by definition about choice under scarcity, but internet and digitalization have made abundance a rule rather than an exception. The business models employed in the old paradigm are less and less usable, but it isn’t yet quite clear what the future of media business will be. The rules of the new game however seem to be incompatible with the old ones: where is the need for intermediaries, how to set price to media products when crowds expect everything to be free, how to compete in local markets when information travels freely across borders?
As we are currently in the phase of crisis, we don’t yet know what the world will look like in ten-twenty years. We don’t even know how long it is going to take before we can say that the transition period is over — maybe we will be in the transition state still thirty years from now. The communication revolution brought by evolution of Internet has been compared to the revolution caused by invention of printing press by Johannes Gutenberg in 15th century. Gutenberg’s invention started a process which led to reformation, enlightenment and development of democracy — the consequences of Internet revolution are still to be seen.
Effects of Internet revolution are obviously not limited to business world, however in media business the effects are seen most rapidly. Though we don’t know the outcome of the current revolution, we know from the history what has happened when some other industries have been revolutionized – maybe on a smaller scale. One very well known example is the revolution that Henry Ford brought to transportation by creating T-Model Ford. T-Model Ford has been celebrated as a break-through in industrial production, but it not only revolutionized the production, but also created a completely new market: affordable cars for every household. From this viewpoint it wasn’t just a production innovation, but also value innovation. But as is well known, it at the same time practically destroyed the previous industry of custom-made cars as well as industries providing vehicles for other means of city travel. The landscape which emerged through this revolution looked completely different from the pre-revolution landscape. The same will be true also of Internet revolution: not all companies currently in media business will survive the convergence.
However, to understand this change and to try to be part of the change instead of victim of it, we should try to understand the forces behind the change. Through this blog I am trying to document my own process of making sense of all this.
