For those of you who buy every marketing book you can get your hands on, “Blue Ocean Strategy” is no longer part of the new, new thing. In fact, the book was first written by Renée Mauborgne and W. Chan Kim way back in 2004 – before the Great Recession, and even pre-iPhone, Facebook, and YouTube.
I remember being in a meeting back then, and the wizened, all-knowing Dick Ferguson (formerly of NewCity and Cox) told me all about it. I should have listened to him.
In recent years, it's been Buzz Knight, Beasley Media Group's SVP of Strategy and Innovation, singing out of the “BOS” hymnal. And for good reason. At a time when traditional industries are embroiled in duplicating each other's efforts, while creating familiar products that are difficult to differentiate, the idea of going to a whole new place and creating something totally new is novel and has the potential to make waves.
The essence of Mauborgne and Kim's treatise is that many industries are “Red Oceans” – traditional, well-known, defined spaces – like broadcast radio. Over time, the competition gets bloody – as it has in radio for decades and decades – reducing growth and profits. You could argue that's precisely what's been happening to AM/FM radio, as rates have plummeted, along with advertiser demand. The competition has proliferated, not just with translators and consolidation, but with digital and tech companies rapidly entering the crowded audio space.
Enter the “Blue Ocean” – a wider, deeper area where there's potential to find previously unexplored market opportunity. When it all falls together, the blue oceanographers create “uncontested market space,” rendering competitors irrelevant.
Obviously, pulling off a successful “BOS” is not an easy task. It requires research, strategic thought, focus, and discipline. A great example from the entertainment industry is Cirque du Soleil, which defined its own uncontested space, rather than trying to figure out how to build a better circus. They created a completely different experience as a result – and one that has been sustainable, while remaining unique for decades. There is still nothing like it in the entertainment space.
And while Cirque may have cannibalized circuses to some degree, its true accomplishment was defining its own market opportunity, appealing to consumers looking for a unique entertainment experience – rather than just another event with lions, acrobats, and clowns.
That is very much radio's challenge. And here I'll take the liberty of bending the “Blue Ocean Strategies” rulebook a bit. While radio broadcasting companies can always purchase existing companies outside of the traditional AM/FM boundaries, a “BOS” for radio means seeking opportunities, innovations, and audience groups that no one else is chasing.
Now, at this point in this post, you might be thinking my predictable “Blue Ocean Strategy” might be an attempt to retrain the industry focus toward the valuable 35-64 audience – a dream that many in the Classic Rock space have on a weekly basis. Consultant John Sebastian is now launching a new format, designed to appeal to 55-plusers. (I hate to burst his bubble, but I inadvertently achieved that goal years ago with Classic Rock, and I'm successfully growing AARP shares with each passing year.)
A real “Blue Ocean Strategy” for many traditional companies with adult fan bases is to find a meaningful, authentic way to connect with young people – the up-and-coming generation of future consumers that has heretofore eluded radio.
But how do you “talk” to Millennials and Gen Zs without alienating those bread and butter adult demographics? You get in your boat and start focusing on creating “Blue Ocean” opportunities.
Here are three examples of adjacent brands – a credit card company, a video gaming website, and yes, a radio show – all achieving success by leaving their cutthroat “Red Oceans” behind.
Capital One Cafes – I spend time each year in a hot, young community, Delray Beach, Florida. Unlike most other areas of the Sunshine State, Delray is loaded with young people, many of whom are gainfully employed, and very much contributing to the local economy.
On the main drag, Atlantic Avenue, Capital One (“What's in your wallet?”) has opened a mashup of a coffee shop and a banking center. At the time it was built, this Baby Boomer wondered who in their right mind would want a latte at a place with ATMs and other financial services?
Millennials, that's who.
These Capital One Cafés are now being opened around the country. And unlike the in-your-face way banks go after new customers, Capital One is creating a slow-cook “Blue Ocean” environment, offering coffee drinks (from Peet's), locally sourced bake goods, free WiFi, and a nice place to just hang out.
The cafés were designed by the same company – Rockwell Group – that is known for its architecture in W Hotels around the globe. These new Capital One facilities exude the same vibe. iPads are scattered throughout these cafés, loaded with video financial lessons and quizzes. Soon, Amazon Alexa devices will be available there, too, with the ability to answer key questions.
Banks? “Red Ocean” dinosaurs that are all pretty much the same. Capital One Cafés? Clearly, “Blue Ocean” inspired all the way, with their sights set on attracting Millennials to the company's array of financial services. It's a space no other financial institution has figured out how to crack.
WaPo on Twitch – We've talked extensively in this space about how newspapers are profoundly challenged to attract young readers. As publishers throughout the country have learned – often the hard way – special colorful sections and even slick websites will not bring Millennials to the Fourth Estate.
But what if a newspaper sought a “Blue Ocean Strategy” on a totally different platform – beyond podcasting, social media, videos, and the other digital trapping? A platform that is a safe 180° from any of the conventional distribution outlets?
The Washington Post chose Twitch, a wildly successful website that primarily appeals to those into gaming – watching others play and engaging in social dialogue with players and each other. Twitch has a huge audience of young consumers with money to spend – 100 million unique users each month.
So, what's the WaPo doing on Twitch? Taking a swim in a “Blue Ocean” infested with Millennials – and their younger brothers and sisters. And there is no other newspaper brand in sight.
In full disclosure, Twitch is owned by Amazon – yes, the same folks who bought the Washington Post several years ago. And so, a special WaPo channel on Twitch makes sense.
But the potentially bigger win is familiarizing young people with a smart, savvy journalism brand – the only one of its kind prescient enough to create special content just for the Twitch platform. Will WaPo's Twitch experiment connect with young people game-hopping around Twitch? Even their strategic team cannot estimate the impact of this Internet sandbox, but it's also a given no long-time reader of the paper will be harmed during this experiment, as they continue to access their favorite journalists in print and online.
Beasley's eSports Initiative, XP – These days, radio broadcasters are jumping into new arenas with wild abandon. Podcasting is the latest venture that has captivated the industry, as company after company has taken a deep dive into the podcasting pool, either by creating platforms, producing content, or buying existing companies.
But then there's a brisk swim in the ocean blue. And that's where Beasley Media Group is headed with its acquisition of a radio show about gaming, CheckPoint Radio. The aforementioned Mr. Knight, CEO Caroline Beasley, and consultant Rick Scott are circling the waters in search of an esports “Blue Ocean Strategy.”
The show – already syndicated on more than 60 stations across North America via Westwood One – is the company's gateway drug into the esports space, one that is estimated to be worth $1.5 billion in revenue in just two years.
Most listeners to Beasley's portfolio of radio stations across the U.S. have no clue about esports, much less the audience that plays and watches it. But that's your blue ocean – an entry point to a younger audience that has rapidly moved away from AM/FM – or wouldn't know a radio from a toaster oven.
The company already owns two high-profile sports radio stations in Boston (WBZ/Sports Hub) and Philly (WPEN/Fanatic), so a sports foundation is already in place. Beasley's XP initiative is the way in the esports door.
In the world of athletics, esports is rapidly becoming mainstream, as the Golden State Warriors, the Luxor hotel in Vegas, are just a few of the groups investing millions into the platform.
But for radio, esports represent “Blue Ocean” real estate, a chance to go where no radio broadcasting company has gone before. It's a quest for younger demos, new lifestyles, and of course, revenue that goes well beyond the chase for a dwindling supply of “radio dollars” in the “Red Ocean” known as broadcast radio.
As strategies go, “Blue Ocean” adventures can be potentially dangerous, costly, and often carry a higher degree of difficulty. When conservative board members ask “Who else is doing this?” or “Where else is this working?” the responses tend to shrugs rather that proof of concept. Obviously, there are ways to stick the big toe into the “Blue Ocean that mitigate risk, like pilot programs, single market experiments, and back room operations that detract little from the bottom line.
But ultimately, a “Blue Ocean Strategy” transcends product improvement, and seeks to discover entirely new waters of opportunity. After all, the bloody “Red Ocean” that is traditional radio broadcasting can be a shark-infested environment made up of dog-eat-dog competitors, hondling media buyers, predatory sales reps, and a fickle audience looking for something fresh, different, and innovative. From up here in the crow's nest, a little “Blue Ocean” thinking might be just the thing broadcasters need to bulletproof its future as a viable medium.
The water's fine. Ready to take a dip?
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