A working man works till the industry dies

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Some industries and businesses collapse because of a fundamental change in the market. Newspapers and payphones are becoming less relevant, so are video stores and bowling alleys. These represent the classic example of technology changing market demand, causing some existing and even entrenched industries to collapse.

But I think a lot of markets have failed or are beginning to fail simply because they aren’t doing anything new. As previous supporters die out, nobody steps in to fill their shoes.

One example of this is the racing industry, and specifically harness racing and greyhound racing.

For a time technology was racing’s savior. The introduction of simulcasting of race meetings meant punters could bet on any race they wanted to from the comfort of their own home – which caused handle and purses to shoot up.

The problem with this approach is that the people missed out on the thrill of the sport. That’s what you experience when you’re at the track with money on a horse coming down the home stretch, your heart pumping wildly as you slap the racetrack fence with your copy of best bets. Now, watching from home is fine with the existing customer base, they’re already hooked on the sport. But try turning the to the racing channel when you’re with someone who is indifferent to the sport and see how long it takes them to complain.

For most people horse racing is at best boring, at worst cruel, and generally agreed to be completely irrelevant nowadays. It’s space in newspapers has been steadily decreasing for decades, and the industry is currently facing what it calls a ‘wagering crisis’. Even die-hard fans are leaving the sport as Racetracks and Government try to milk a shrinking wagering dollar.

So what happened? Ask any horsemen and they’ll give you a diverse mixture of accusations. But I think that basically the public stopped caring. In New Zealand racing took off because a while back it was the only place you could drink after 6pm. This created long term fans some of which have still stuck around, but they won’t last forever.

The thing is that nothing has changed in the industry for years. There’s nothing particularly exceptional about it for media to talk about.

Parallel this to emerging web start ups:

Most people would agree that invoicing is about as thrilling as watching a bunch of horses go round a track, but have a look at the attention some of the emerging online invoicing startups are getting.  Companies like Blinksale (which I use for all my invoicing), regularly receive mainstream media and online attention, far more than their size should dictate.

The difference is that what they’re doing is new and innovative. There’s actually something there to report on, as opposed to horse racing which is stagnant.

Can anything be done about it? For the most part I don’t think there is any simple answer, at least not without big industry behind it. NASCAR  is unfathomably boring for the New Zealander’s, but they somehow found make cars going round in circles relevant to the everyday American.

The newspaper industry is the oft-cited example of a dying industry because it took them too long to realise their primary purpose had shifted from a news source to a news filter. Over the past decade newspapers faced with falling subscription revenue folded to the advertising pressure and released their content free online. The Financial Times managed to survive with it’s “Pay Wall” intact because it realized that people don’t mind paying for quality if it saves them time:

“It was pretty lonely out there for a while in paid land,” he said last week. “But it has become pretty clear that advertising alone is not going to sustain online business models. Quality journalism has to be paid for.”

…

The growth of paid online services under the Financial Times banner shows that the paper was right to maintain pay walls at a time when other media companies were yielding to the Silicon Valley mantra that “information wants to be free,” said Tim Luckhurst, a journalism professor at the University of Kent in Britain and a former editor of The Scotsman.

“It has proved, in one niche at least, that editorial journalistic endeavor does create value,” he said.

NY Times

I guess in sum, there are no clear cut solutions. But there’s more than one way to skin a cat, and doing nothing is the worst option.