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Media companies struggle to build technology

Most media companies have struggled to become technology companies.

Why it happens:

  • HR: Great engineers prefer to work in companies where they are the primary value creators. In most media companies, the technology team is seen as support.
  • Poor economics: Media is a low ARPU business and hence cannot afford great engineers.
  • Lack of vision: Most media companies tend to reinvent the wheel that eventually become cost-centers instead of adding to competitive differentiation.


Pixar: Most technology-first companies think capability-first. In contrast, media and other consumer Internet Products companies think audience-first. For example, Lucas Films, the makers of Star Wars, couldn’t make the most out of Lucas Films Computer Division. Steve Jobs bought it and converted it into Pixar, which too at its core initially was a tools company.

Washington Post:

“Bezos saw the value of building SaaS (out of Arc CMS), but he warned the team that support could be a drain on resources… He was proved right, as some customers have pushed for custom features & required a degree of hand-holding. … Incubating a tech startup inside a larger company—and drawing in the investment and talent needed to build it into a larger enterprise—can be challenging. … Mr. Prakash at times pushed for greater investment in Arc and argued that as a stand-alone company it could do a better job recruiting top engineers, by offering them equity and giving them more freedom to work remotely than was possible at the Post, the people said.”



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