A great interview over on Investor's Business Daily with Michael Miron, a digital media consultant and former CEO of ContentGuard (registration required). Miron is discussing the general fear that media companies have about the disruptive threats facing their industry. The threats are quite obvious. The democratizing power of the Internet allows anyone to create their own content; the digitization of media facilitates the seemingly profit-free sharing of previously hard-to-access content. What Miron points out is that disruptive change almost always creates net growth. He reflects on his experience at IBM:
"I was at IBM in 1981 the day the personal computer was announced. We had raging debates about mainframes vs. PCs. It turns out that PCs weren't a substitute for mainframes. It was a massive, radical expansion of the market for computing power. Today, it's 10,000 times bigger than anyone would have credibly said in 1981."
Sometimes that growth is in different spaces, but it almost always occurs. For example, in the MP3 space recording companies certainly have lost out as CD sales have plummeted. But new, attractive profit streams have emerged in the form of ring tones, MP3 players and subscription-based audio services. Existing companies can seize these profit streams, if they recognize the potential early and view the development as an opportunity, not a threat.