Wednesday, March 18, 2009

Death Spiral?

In business there is a phenomenon known as the death spiral, in which the measures intended to rescue a company or industry not only fail to stem the losses, they actually accelerate the decline. In the case of newspapers, the loss of readers and advertisers led to cuts in content and features and greater irrelevancy, which led to more lost readers and advertisers, which led to still more cuts, which led to ...

Which leads to the present, potentially fatal predicament for newspapers, or at least the one you're reading now.

What is the lesson for the rest of the business world?

No business or industry is exempt from challenges and competitive threats (what business hasn't been upended by the Internet, or the economy, or both?). None is promised, much less guaranteed, perpetual survival. What matters is not the nature or severity of those challenges, but how well prepared the company or industry is to evade, counter or adapt to those threats. Newspapers weren't; now they're facing the consequences.

By Bill Virgin, Seattle PI columnist. Full article:

Just got a cold feeling in the pit of my stomach that the above could be applied to the United States and our economic situation. Is China going to own us before this is over?

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