Economics can explain a lot. When looking at the sea change impacting every industry, and fitness and wellness is not immune, just follow the money for answers regarding what the future will bring. “It couldn’t be more straightforward,” said Randall Rothenberg, CEO of the Internet Advertising Bureau. “Today the average 20 year old can create a global TV network with tools built into a laptop. So from an Econ 101 basis, you have the ability to create unlimited supply against what has been relatively stable demand.” You get the idea – prices are headed down and given shrinking margins major players in each and every industry best get prepared.
Whether it be the WSJ or CNN, with all their overhead, they have no more access to an audience than a 20 year old. The thing is there are hundreds of millions of 20 year olds, some of them using Adsense, driving the price of ads down: driving everything down. The same is true for all other industries, eventually. It’s just that those most exposed to the trends, namely content creation around entertainment and information, are seeing it sooner than others.
Think about Yahoo. At 3.5 billion daily page views, it is one of the most visited website in the world. In 2008, its profits were $424 million on $7.2 billion revenue. Not bad, except when compared to 2005, when Yahoo had profits of $1.9 billion on revenues of $5.3 billion.
The main challenges these industries and organization’s face is letting go of past assumptions and methods in the manner they operate their enterprises. Watch Rita McGrath, Professor, Columbia Business School, discuss how companies can plan and pursue aggressive growth agendas with confidence by framing their strategic growth opportunities, testing assumptions, and creating a culture that acts on evidence and learning.