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Jack White Upends “Because We’ve Always Done It That Way”

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Over the years, “Because we’ve always done it that way” has become a bit of a caricature. We picture someone in the boardroom answering “Why are we doing that?” with the dreaded habitual response. I don’t remember the last time I heard someone say that, and yet…it is done repeatedly.

It’s not to say that “because we’ve always done it that way” should never be the answer. When something works well, it should be done again with an open mind to how it should perhaps evolve. As we sit on the cusp of 2025, “because we’ve always done it that way” somehow just feels more dangerous, more alarming, and potentially more detrimental than ever.

When you consider the concert business, you’ll find lots of “because we’ve always done it that way”. Since ticket sales shifted from in-person (anyone else ever camp overnight to get tickets to their favorite artist?) to online, the model has largely remained the same. On-sales are marketed through typical channels (email databases, digital, and some traditional media), and live events are more often than not announced and go on sale many months or even more than a year in advance. When they are announced, they come out of nowhere, dropped in your lap.

Just last week, my kid informed me that Avril Lavigne would be playing in our town in June 2025. He won’t be buying them now for a multitude of reasons. As my son explained, “You want me to pay hundreds of dollars for a show next summer when I don’t have the slightest idea if I’ll be in town?” He will inevitably forget about the show until next spring, only (maybe) reminded as it gets closer when he sees a social media post.

This is “because we’ve always done it that way”.

Then, there is Jack White’s way.

Transparently, I’ve been a Jack White fan since a record rep took me to see the White Stripes’ Elephant Tour in 2003. Jack White shows followed the concert on-sale norm until he flipped it upside down in 2024 beginning when he released his latest album, No Name.

Jack White

Jack White performs at Michigan Central Station (Photo credit: Jgphotographydetroit / Shutterstock.com)

The record release gave us the first whiff of something new in the air.

  • With no lead up whatsoever, White released the album on a Friday in July, but only on vinyl for fans who were shopping at his Third Man Records stores in Detroit, Nashville, or London. This, of course, generated buzz.
  • It wasn’t for another week (August 2nd) that White dropped the album on streaming services. This, of course, generated buzz.
  • His first show playing songs from the new album took place at American Legion Post 82 in Nashville (Capacity: around 600) as a benefit show so the venue could buy a new sound system. This, of course, generated buzz.
  • What happened next was extraordinary. He started announcing other shows at intimate venues. Sometimes a few days in advance, sometimes the same day. As the show crisscrossed the country, and sometimes the world, he played a game of “will he or won’t he” with your city. When he played Washington, DC, might he go west to West Virginia or north to Pennsylvania? (It was PA). Any other Wisconsin shows after Milwaukee? (Yes, Madison). How many shows in each city? Some cities got one. Some got multiple shows in different venues in the same city. Sometimes on the same day. I followed this sequence, visiting his social media platforms every single day. Hoping he’d play my town certainly, but more importantly, watching with fascination. This absolutely generated buzz.
  • Then finally, White announced an actual world tour, with more traditional routing but smaller venues than he typically plays. Unsurprisingly, the entire thing sold out nearly right away.

When you have that conversation to consider how to get more eyes and ears on your brand in 2025, watch out for the negative obstacles and roadblocks you’re putting up before you even get started. If you’re in the entertainment business, how can you leverage your brand to generate buzz in unique and different ways?

“Because we’ve always done it that way” will only end one way. And you won’t like it very much.

Press Releases

Coleman Insights And Partners Launch Game-Changing Validate Audio Attribution Platform For U.S. Radio Stations

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Media research firm Coleman Insights announces the introduction of Validate, an innovative new attribution platform that helps radio stations demonstrate the impact of their advertising campaigns. Validate helps radio stations show advertisers exactly how over-the-air advertising campaigns generate consumer impressions and drive traffic to websites. The launch follows a new agreement with Kamloops, BC-based Pattison Media, which created Validate, and Vancouver, BC-based Momentum Media, which operates and is the worldwide licensor of Validate, through which Coleman Insights has exclusive rights to sell and market the service in the United States.

“Validate will deliver remarkable results for radio stations in the U.S.,” said Coleman Insights president Warren Kurtzman. “For decades, advertisers have sought concrete ways to measure radio’s impact. I’ve been involved in the sales of services to radio stations for 40 years and I have rarely felt such a universally positive response to a new idea like I’m seeing with Validate.”

Cox Media Group and Connoisseur Media have already signed on as charter subscribers to Validate. The commitments of these two groups follow extensive discussions with the board of directors of the RAB, whose members will receive discounts on Validate subscriptions.

“Radio needs tools that make the impressive results we deliver very clear for advertisers,” said Rob Babin, Executive Vice President, Radio at Cox Media Group. “We believe Validate does that and look forward to our partnership.”

“When I first saw Validate, I knew it was something that could generate revenue for our stations,” said Connoisseur Media CEO Jeff Warshaw. “We look forward to being among the first radio groups delivering this important information to advertisers that demonstrates the power of radio.”

Validate combines streaming listening data with audience estimates from trusted ratings providers, using a proprietary algorithm to estimate total audience reach across both streaming and broadcast. By reporting on ad performance almost instantly, Validate allows radio sales teams to give advertisers real-time feedback on the effectiveness of their campaigns. A unique conversion tag further enables advertisers to track website engagement from listeners exposed to campaigns, capturing data for up to 90 days after exposure.

More information is about Validate is available at www.ColemanInsights.com/validate.

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How United Airlines Is Trying To Win The Trust Image

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Transparency. It’s easier said than done.

Brands have traditionally held back information from their customers, for reasons that may include:

  • Fear of exposing vulnerabilities
  • The perception that the customer “can’t handle” the information
  • Perceived lack of control
  • Concern about negative impact on the brand’s image

On the other hand, think about the positives that can result from transparency:

  • Deeper customer trust
  • Strong consumer engagement
  • Building positive images

The last point, related to why companies choose or don’t choose to be transparent,  is telling. Some companies think it’s a negative, while others see it as a positive.

For years, United Airlines ranked at the bottom of survey after survey.

United Airlines

Photo credit: Wenjie Zheng / Shutterstock.com

Several of the initiatives that United has put in place include purchasing newer planes, investing in technology, and working to reduce its cancellation rate. None of these initiatives are particularly unusual in the airline industry.

What United is doing, related to transparency, stands out.

Most airlines are now pretty good about letting you know right away when a flight is delayed. But does your airline share details like this?

“Your flight is stuck on the tarmac because we don’t have enough staff to open the door in Newark”

“Here’s a weather map detailing why weather is affecting your flight.”

Photo credit: Shutterstock

United is trying to win its customers’ trust, a powerful image in the aviation industry, so the company has decided it’s worth the risk.

Building perceptual images is how brands grow, which leads to customer base growth. When images decline, customer bases decline.

If United wants to win the image for having the newest planes, it can’t just buy and fly new planes. United must tell its customers and prospective customers that they fly the newest planes.

This is no different for a radio station attempting to win the music discovery image or for a podcast trying to win the image for its category, whether it’s True Crime or European History.

Content won’t win the game alone. It must be paired with consistent and aggressive branding.

Time will tell if United’s transparency initiative moves the needle on the Trust image.

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Sometimes The Buzz Is Bigger Than The Song

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If you watched the Grammy Awards on February 4th earlier this year, you may recall Beyonce sporting a cowboy hat, a premonition of what was to come. “Texas Hold ‘Em”, the first single from her forthcoming album Cowboy Carter, dropped one week later during the Super Bowl. It was the latest in a series of big cultural moments for the superstar, who crossed boundaries to wide critical acclaim with Renaissance two years earlier.

If you’ve listened to Cowboy Carter in its entirety, you know it’s not really a Country album. Some songs fit certain genres and others are more challenging to define. But the reality is, Beyonce wore a cowboy hat to the Grammys, sports one on the album cover while waving an American flag, put “cowboy” in the name of the album, and released “Texas Hold ‘Em” as the first single. For better or worse, Cowboy Carter was branded as a Country project from the jump, and that led to an obvious question.

Would Country Radio play it?

If a Country programmer read Billboard on February 26th, she may have felt quite compelled to do so. “Beyonce’s Texas Hold ‘Em Hits No. 1 on Billboard Hot 100” blared the headline. The article mentions how the song hit number one on Billboard’s Country chart a week earlier, the first Black woman to achieve the feat. At that point, it had accumulated 29 million streams, up 51% from the previous week.

Beyonce

Beyonce hit #1 on the Billboard Hot 100 and Country charts with “Texas Hold ‘Em”. (Photo credit: A. Carter/Shutterstock.com)

February 26th was also the day “Texas Hold ‘Em” first appeared in our Integr8 USA national callout research in both our Country and Pop tests (at that time, our Pop formatted chart included CHR and Hot AC. Today, the two formats have their own reports). On both Integr8 USA Country and Pop, “Texas Hold ‘Em” debuted towards the bottom. But in Country at that early stage, the Like a Lot score was more than double the Dislike a Lot score. By mid-April, the song was 95% Familiar to Country listeners and plummeted to last in our Country research in a trended decline. This was driven by high polarization, with its “Dislike a Lot” score at least double that of every song but one other on the chart. Despite a different format and sample specifications, “Texas Hold ‘Em” didn’t fare much better on Integr8 USA Pop. Despite its big cultural moment, massive press, and strong streaming numbers, the song simply didn’t resonate with radio listeners.

Contrast this to “A Bar Song (Tipsy)” by Shaboozey, who was featured on two songs on Cowboy Carter. “A Bar Song”, released on April 12th, is in hundreds of millions of streams territory. It first appeared on Integr8 USA Country on May 13th with a 3.74, which ranked it a middling #18 out of 30 songs. But unlike “Texas Hold ‘Em”, Shaboozey’s Integr8 USA graph inclined each week. By August 12th, “A Bar Song (Tipsy)” sat atop the Integr8 USA Country chart with a 4.23, at number one ahead of “I Had Some Help” by Post Malone featuring Morgan Wallen.

Shaboozey’s “A Bar Song (Tipsy)” grew to claim the top spot of Integr8 USA’s Country chart

As is often the case in callout research, polarization is the unseen secret sauce that our subscribers will point to. While streaming numbers are very useful, and we take them into account when selecting hook lists for each Integr8 USA format, they hide the crucial component radio needs that streaming does not.

On-demand platforms, as a one-to-one medium, only need demand from that person. Radio, as a mass-appeal medium, needs to keep as many people tuned in as possible. Higher negatives equal a greater risk of tune-out. “Texas Hold ‘Em” has decent passion scores in our research. But it also has big negative scores, which doesn’t matter so much for streaming but really matters for radio.

We’re continuously learning new things with Integr8 USA, as it uncovers useful anecdotes for subscribers for Pop, Hot AC, Country, and Alternative. We’ve seen historically core format artists releasing songs that would seem like no-brainers that end up being duds in our research. We’ve seen a song with huge amounts of airplay from a buzzworthy artist performing just ok in Integr8 USA CHR and near the bottom on Integr8 USA Hot AC. We’ve seen some artists perform very well across multiple formats (like Shaboozey).

The proliferation of sources for programmers to grab information is great in many ways, but potentially detrimental in others. Don’t ignore other airplay outside of your own. Don’t ignore streaming numbers. Don’t ignore the buzz and cultural moments. But utilize callout research, local if you can, or a high-quality national option like Integr8 USA, to clearly understand how each song fits in your strategy for your listeners.

Press Releases

Coleman Insights Relaunches Integr8 USA National Callout Service

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RALEIGH, NC, SEPTEMBER 18, 2024 – Media research firm Coleman Insights announces changes to its Integr8 USA national callout music testing service, which the company launched in May 2023.

Integr8 USA originally served three formats with new music research—a combined Pop test for CHR and Hot AC, as well as tests for Country and Alternative. In response to client feedback, Integr8 USA is now offered for four formats, with CHR and Hot AC served with their own services. The new structure brings Integr8 USA into alignment with client strategies for both formats, including focused audience targeting and pacing that reflects each format’s respective music cycles.

Integr8 USA now offers 34 weekly new music reports and four recurrent reports. This slight reduction in the number of reports previously offered is more in sync with the strategic needs of music programmers and allows Coleman Insights to lower the price of the service to subscribers.

“This relaunch of Integr8 USA brings the service more in line with what our subscribers tell us they need,” said Coleman Insights president Warren Kurtzman. “The changes we’ve made make Integr8 USA more affordable and an easier fit into our clients’ 2025 budgets.”

Integr8 USA subscriptions are now available to radio stations, groups, and record labels for CHR, Hot AC, Country, and Alternative.

More information is available about Integr8 USA from Coleman Insights here.

Press Releases

Quest Global Research Group Inc. Acquires Coleman Insights, Expanding Offerings and Enhancing Client Services

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Oakville, Ontario – Sept 5, 2024: Quest Global Research Group Inc., a leader in the market research industry, is pleased to announce its acquisition of Coleman Insights, a prominent media research firm. This partnership will enable both companies to broaden their offerings and deliver enhanced services to clients across the market research community.

Founded in 2003 in Ontario, Canada, Quest is one of the industry’s leading online market research companies, operating in over 70 markets and employing over 200 people globally. Quest’s portfolio includes the online research data collection company Quest Mindshare, the panel management company SampleGurus, online panels Opinion Champ and Panel Champ, and the industry’s leading data quality platform: dtect.

Since 1978, Coleman Insights has delivered research that has helped media companies in more than a dozen countries build strong brands and develop great content. The company, which is headquartered in Raleigh, North Carolina, has been a leader in the radio, podcasting, and streaming industries.

Coleman Insights’ integration into the Quest family will create a more comprehensive suite of services, leveraging each organization’s strengths to better meet evolving client needs. Combining Coleman’s strategic insights and Quest’s data collection capabilities, services, and technologies will offer more innovative solutions for solving clients’ biggest business challenges.

“We are thrilled to welcome Coleman into the Quest family,” said Greg Matheson, co-CEO of Quest. “This acquisition is a significant milestone in our growth strategy, enabling us to expand our service offerings and provide even greater value to our clients. The synergies between our companies will drive innovation and allow us to better support our clients’ needs.”

Coleman Insights will continue to operate under its brand and its existing team while benefiting from the expanded resources and capabilities of Quest. “After partnering with them for more than a decade, we know that Quest shares our commitment to quality and client satisfaction,” said Warren Kurtzman, President of Coleman. “By joining forces, we can enhance our offerings and provide our clients with a broader range of services, all backed by the expertise and resources of a larger organization. This partnership marks an exciting new chapter for Coleman Insights, and we look forward to what we can achieve together.”

For more information, please contact:

Jay Nachlis

VP, Consultant

jaynachlis@colemaninsights.com

 

Nicole Antic

Director, Business Administration

nantic@questmindshare.com

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Why Podcasters Must Urgently Adopt A Video Strategy

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Good morning from the world’s largest podcasting conference, Podcast Movement in Washington, DC! From the first time I attended this great event in Philadelphia six years ago, I felt an energy that always excites me about returning.

No one should debate podcasting’s strength as an audio medium. Like radio, there is power in the spoken word, in the ability to paint mental pictures and tell stories. It is magically portable. Easy to listen to on the go, whether in the car, while taking a walk, or riding the subway.

If you think about the ways early podcast consumers listened to podcasts, you might visualize this:

Apple Podcasts

Photo credit: Mojahid Mottakin / Shutterstock.com

The Apple Podcast logo was essentially the de facto logo for the medium, a true indication of the power of branding. Apple was the right platform for podcasting because the app was native to Apple devices—no need to go to the App Store and download it.

But consumer habits change.

While iOS is still the leading operating system over Android in the United States, it’s not by a ton (about 60%-40% according to TechRepublic), and globally Android dominates iOS (about 70%-30%).

So, it’s no longer just about the convenience of the native app on your phone. It’s what brands win the mind of the consumer. And it’s important to note some crucial changes that have taken place.

While Apple is a favorite of many creators, a remarkable thing happened to two other platforms on the consumer side.

  • Spotify went from 30 million active users in 2013 to 626 million in 2024.
  • YouTube went from 532 million active users in 2019 to 868 million in 2023.

Consumers made a behavioral shift to Spotify and YouTube because their brands grew, and they offered content their audiences found appealing. If you’re not putting extra energy into these platforms, you’re not fishing where the fish are.

One year ago, I presented the landmark “New Rules of Podcasting on YouTube” study at Podcast Movement in Denver with Steve Goldstein of Amplifi Media. This benchmark research project explored the perceptions and usage of video among American podcast consumers. Here are three key takeaways.

  1. 73% of podcast consumption is dominated by three platforms…YouTube, Spotify, and Apple.

One of these platforms is all video. One has publicly stated in recent months that it is going all-in on video. On my personal Spotify account, I’m now getting video podcast recommendations on my home page before audio versions.

  1. Consumers don’t see podcasting as an audio-only medium.

We were intentional in our study to not use the word “listen” when referring to a podcast because we felt it was important to understand whether consumers see podcasting as an audio-only medium. They used to, but they don’t anymore.

  1. More podcast consumers now say they consume their favorite podcast via audio and video than just audio.

If a fan of your podcast searches for a video version and it’s not there, do you think YouTube or Spotify’s algorithms will suggest other shows that will take your audience away from yours?

Of course they will.

After I presented this study, many subsequent conversations followed with creators and networks. We acknowledged that there is no “one size fits all” video solution for every podcast. Not every podcast needs to, or even should, offer complete episodes on video. Even if starting with the usage of video as a marketing tool, using trailers and clips, it is a great place to begin the journey.

And yet, there were two words I knew I could count on hearing from all of them.

“Yes, but”.

“Yes, but the views are miniscule relative to the time we spend”.

“Yes, but YouTube’s advertising restrictions are horrible”.

“Yes, but no RSS feed”.

“Yes, but we can’t sell it”.

“Yes, but I don’t have the staff”.

“Yes, but it’s a trend”.

As my therapist might say, your feelings are valid. But they miss the big picture.

Most of the research I conduct for podcasters at Coleman Insights is perceptual research. We may take a deep dive, for example, into the behavior of fans of Kids & Family podcasts or fiction podcasts. Maybe we’re digging into perceptions of sports podcast users.

This type of research is very different than top-line usage analytics, which don’t dig into brand images that influence behavior. Perceptions in podcasting are changing, and that is changing behavior.

In a couple of hours at 10:15 AM EDT, I’ll join a panel for a session called “Stop Leaving Impressions On The Table: Vodcasting Is Podcasting” moderated by Carl Weinstein, COO of Locked On Podcast Network. Locked On features a local podcast for every team in every major sport. Weinstein’s network jumped into vodcasting (video podcasting) years ago, and fully resisted “yes, but”. I asked him a few questions about their experience.

Q: When did Locked On embrace video? Why was it important for Locked On to embrace it early, when most podcasters are only now considering it as an integral part of their strategy?

A: We began adding the video simulcast of all our podcasts to our entire lineup in 2021. It was less about embracing it early than it was about meeting the audience where they were. The signs were already there in 2021, actually before then, that the audience was already defining a podcast differently than the industry was at that time. To reach the total potential audience, we needed to move towards them and could not expect them to move back towards us. We jumped in with both feet and never looked back.

Locked On Podcast Network Chief Operating Officer Carl Weinstein

Q: How has it performed compared to audio and what are some of the key differences? Why do you think it’s been so successful for you and not as successful for others?

A: Performance has been amazing. I think largely because we tapped into a totally new audience and also because discovery on the primary video platform, YouTube, is so much better than discovery on the traditional audio podcast apps. Hard for me to speak to what others are experiencing, but I think for us, we are tailor-made for the video platforms and experience. Our podcasts are daily, our podcasts are shorter than most others in the market (30 minutes or less), and we cover sports, targeting one of the most passionate, widest-reaching affinity groups in media.

Q: Seems many creators are concerned about tracking and attribution with YouTube. How have you handled that?

A: We have an amazing advertising ops team. We have developed our own systems and processes for tracking and reporting and have worked with our advertising partners to optimize each for their needs. We are also on OTT, both VOD (Video On Demand) and FAST TV (Free Advertising-Supported Streaming Television), so with each platform we must address a unique set of requirements and needs. Not necessarily easy, and certainly time and resource-consuming, but totally doable and worth the effort.

Press Releases

Coleman Insights Reveals Surprising Findings About Michael Jackson and Van Halen In New FACT USA National Music Tests

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RALEIGH, NC, AUGUST 12, 2024 – Media research firm Coleman Insights is releasing data from its FACT USASM National Music Tests for the Mainstream AC, Hot AC, Country, Alternative, Classic Hits, Classic Rock, and R&B formats.

In the FACT USA test for Mainstream AC, of the 80s, 90s, 00s, 10s, and 20s, the decade right in the middle—the 00s—performs strongest.

In the FACT USA test for Classic Hits, with four songs in the Top 10 and 12 of the Top 100, Michael Jackson is the best testing artist and, as Senior Consultant John Boyne notes, “It’s not even close.”

In the FACT USA test for Classic Rock, the firm notes a very poor showing by one of the format’s traditionally biggest artists. Van Halen has just one song in the Top 100, and 10 songs in the Bottom 100.

Coleman Insights will continue to release FACT USA “Facts Of The Week” on its social media platforms each week, with findings from Hot AC, Country, Alternative, and R&B still to come.

FACT USA subscriptions are now available to radio stations, streaming services, and other users, and results for all seven formats will be ready in time for implementation prior to this year’s Fall radio ratings period. For radio stations FACT USA subscriptions are capped at $5,000 per station, with lower prices for stations in smaller markets. Subscription packages are also available for national platforms.

More information is available about FACT USA from Coleman Insights here.

Blog

All Hail This Branding Lesson From The Donut King

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My favorite thing about a long flight is discovering movies I’d never heard of.

My most recent find is “The Donut King” (if you’re an 80s film geek like me, you just whispered “Of Chicago” under your breath. If not, never mind, moving on…)

“The Donut King”, at its core, is a tremendous underdog story. It focuses on Ted Ngoy, a Cambodian immigrant who fled the oppressive Khmer Rouge regime in the mid-1970s and made his way to Southern California. He was trained to make donuts at Winchell’s, which operated around 200 stores on the West Coast at its peak. He purchased his first shop, Christy’s Donuts, in 1977, eventually expanded to 50 locations, sponsored other Cambodian refugees, taught them to make donuts, and was ultimately responsible for a California donut empire so entrenched, it foiled Dunkin Donuts’ plans in the state for decades (it has only recently pushed hard into the Golden State).

Ted Ngoy learned to make donuts at Winchell’s before starting his own empire (Photo credit: mikeledray / Shutterstock.com)

It feels a bit like a Behind The Music episode – tragedy, triumph over tragedy, a rise, and fall. There are many lessons to be gleaned from “The Donut King”.

But as is very typical of me and my marketing/branding brain, I hyper-focused on one thing that happened in the 90-minute film.

The pink box.

Not every donut store today uses a pink box, but a pink box certainly has become synonymous with donuts. But in the 1980s, no donut stores used pink boxes, generally only white ones.

That is, until Westco, the company that supplied the boxes to Ngoy’s stores, offered up boxes made of leftover pink cardboard stock that happened to fit a dozen donuts perfectly. They were cheaper, meaning a few pennies saved per box meant big savings over time.

So, the pink donut box may have happened by accident, but it doesn’t mean your pink box needs to be an accident.

The pink box has become synonymous with donuts (Photo Credit: The Image Party/shutterstock.com)

Broca’s Area is the part of your brain that anticipates the predictable, and literally tunes out what it knows and expects. Stimulating Broca’s Area engages our excitable, surprise emotion. In the 80s, if you’d seen a white box every time you stopped for donuts, seeing another white box would be unremarkable. But a pink box would stimulate Broca and capture your attention.

The principle drives “The Purple Cow” by marketer Seth Godin. You’ve seen so many brown and black cows in your life, so when you see one it’s just another cow. But what would you do if you saw a purple cow on the side of the road? These days, you might stop and take a selfie with the cow, perhaps a TikTok upload, #PurpleCow of course.

Why?

Not because it’s a cow. Because it’s a purple cow. And only because you’ve never seen a purple cow before. If purple cows started showing up everywhere, it wouldn’t be remarkable anymore.

What, never seen a purple cow before? (Photo credit: Davide Rigon/shutterstock.com)

What is perhaps the greatest thing about the pink donut box is just how simple it is. It didn’t even require an increase in budget, it was cheaper! But it was different, so it captured attention.

When you’re brainstorming the next marketing idea, the next way to promote a song, the next video for social media, the next design for the app, you should think strategically about how it will benefit and grow your brand. But also consider, how will it stimulate Broca? How will it surprise? How will it be different?

What’s your pink donut box?

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Netflix’s Streaming Pivot Included a Surprisingly Harsh Decision

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The list of companies that failed to pivot when their industries underwent major changes is long.

Blackberry couldn’t pivot to touchscreen smartphones.

Kodak couldn’t pivot to digital photography (ironic, since Kodak invented the first digital camera in 1975).

Blockbuster couldn’t pivot to streaming.

The story of how Blockbuster had a chance to purchase Netflix in 2000 for $50 million is perhaps the biggest business whoops of all-time (though if you think the Netflix we know today would exist under Blockbuster’s stewardship, you’re missing the entire point).

While I’ve always been fascinated by Netflix’s ability to move away from its core DVD-by-mail business to become a streaming and content-producing powerhouse, I never knew until now just how brutally they did so.

Netflix

Photo credit: Shutterstock/sitthiphong

In a recent New York Times interview, Netflix CEO Ted Sarandos discusses the company’s evolution and the realization that their DVD business (which was doing very well) would not last forever.

“In periods of radical change in any industry, the legacy players generally have a challenge, which is they’re trying to protect their legacy businesses. We entered into a business in transition when we started mailing DVDs 25 years ago. We knew that physical media was not going to be the future. When I met Reed Hastings in 1999, he described the world we live in right now, which is almost all entertainment is going to come into the home on the internet. And he told me that at a time when literally no entertainment was coming into the home on the internet. And it really helped us navigate this transition from physical to digital, because we just didn’t spend any time trying to protect our DVD business. As it started to wane, we started to invest more and more in streaming. And we did that because we knew that that’s where the puck was going. At one point, our DVD business was driving all the profit of the business and a lot of the revenue, and we made a conscious decision to stop inviting the DVD employees to the company meeting. We were that rigid about where this thing was heading.”

“We made a conscious decision to stop inviting the DVD employees to the company meeting.”

Photo Credit: Shutterstock.com/yuriyt

As a manager, I’m not sure I could ever be that cutthroat. But I can’t entirely pick it apart. When your entire universe, knowledge base, and salary comes from one thing, it certainly can color and bias your view of a new thing that’s going to destroy the thing that’s your current lifeblood.

Sarandos acknowledges how harsh it sounds, but explains, “It got the whole company in the mindset that we shouldn’t keep investing in the old business. It’s going to prevent us from investing in the new business, and the new business is going to get us to the next place.”

There are obvious parallels to other industries. And though I’m not suggesting you start disinviting members to company meetings, the Netflix lesson makes it abundantly clear that brand and industry evolution on this scale requires dramatic internal philosophical and cultural change.