Most famously, he argued that railroads had lost out to other movers of people and goods because they perceived themselves to be in the business of running trains rather than in what they really did -- providing transportation in whatever form customers wanted.
The media industry should go back and reread Prof. Levitt's seminal article, because that's exactly the dilemma that confronts it today. Ink-and-paper media are reluctant to deliver their content to readers in whatever form they want because it's much more profitable to keep the information chugging down the tracks of the old format. Of course, as Ted Levitt visualized 46 years ago, the media companies don't have a choice. The internet is not a line extension to their brand; it is an integral part of their brand.
Fear of cannibalization
The problem is, of course, that right now the old media still make a lot more money than the new media, and the newspaper and magazine guys don't want to cannibalize their existing businesses by encouraging their websites to go after all those print-based ad dollars.
It's sort of like the dilemma U.S. car marketers face. They want to keep selling their hyperprofitable SUVs even though car buyers are opting for less expensive and more gasoline-efficient automobiles. Here's what it boils down to for both media and auto companies: A nonsale of an expensive unit is less profitable than the sale of cheaper merchandise.
Put another way, it's sort of like ad agencies continuing to evaluate complex media deals on the basis of cost when customers (clients) are more interested in opportunities. It seems agencies would rather nix a deal because it doesn't measure up to their preconceived CPM criteria than endorse it because it enables a client to reach consumers in new and unexpected ways. Agencies are trying to hold onto business using old models, and they are in danger of being written out of the equation. A missed opportunity can cost the client more in the long run than any short-term savings on the price of an integrated-marketing deal. And like the media they evaluate, agencies are in danger of clinging to their old ways because they can't figure out how to give clients what they need and want in the new media environment.
Creating relevant content
I've been hearing the word "relevance" pop up quite a bit lately in regard to what it takes to keep readers happy. For instance, Samir Husni, chairman of the journalism department at the University of Mississippi, debunks the idea that print is a dying breed. "The first time I heard print was dead was 1980 -- when I was a student," Mr. Husni told Stuart Elliott of The New York Times. He said the difficulty confronting print media as online media take hold has nothing to do with ink on paper. "It's a problem of creating relevant content. As long as the content is compelling, the readers will follow," he said.
Relevance also applies to websites. If I were running a website for a newspaper or TV station, I would heavy up on extremely local news (almost on a block-by-block basis). I'd do streaming video on very local issues, each one designed to attract a few thousand people (but very intently).
The 'Long Tail'
The world is coming around to thinking in a very targeted way. The new electronic media provide the opportunity for us to exploit the Long Tail of cyberspace. Chris Anderson, editor of Wired magazine, first talked about the concept two years ago, and his new book, "The Long Tail: Why the Future of Business is Selling More of Less," recently hit the shelves. If cyberspace enables marketers to move from mass to millions of niches, websites can zero in on extremely narrow segments.
And the narrower the audience, the more intense the interest. That's one kind of narrow view Prof. Levitt would have applauded.