Monday, July 07, 2008

An enduring puzzle

Say you were in charge of a struggling business. You face falling revenue, changing technology, and a host of new competitors.

Under what conditions would your best strategy be to give away your best product to your competitors?

I’m hard-pressed to think of one. Yet daily newspapers pursue just this strategy when it comes to cable news networks.

Repeatedly, we see newspaper reporters show up on Nancy Grace or Fox News to help them cover a story. Frequently, those print journalists provide all the facts while the hosts contribute only speculation and histrionics.

It is easy to understand why CNN and Fox do it. Getting free information fits perfectly into their low-cost model.

But why do newspapers allow their employees to subsidize the competition? In most cases, the newspaper does not even get useful PR. “Hawks do not share” and O’Reily, Grace and Greta rarely promote the newspaper that actually did the reporting.

Like I said, it’s a puzzle.

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