A few weeks ago, I was driving to my favorite Mexican restaurant, Los Ocampo in Minneapolis (check it out if you haven’t already), when I started listening to Science Friday hosted by Ira Flatow. The topic was fun. They had done a show in 1994 on whether people would someday read newspapers online. More than two decades later, they brought the same guests back on the show to examine what they had said and how their predictions turned out.
The 1994 show had two experts — an investment banking analyst who focused on the newspaper industry and a newspaper publisher. These experts acknowledged that there were benefits to having your news online, and someday we may see news on a “flat panel with a clicker,” but they didn’t think it would make sense for the majority of people. They claimed the technology was too expensive and that only a very small percentage of people have the necessary equipment – a computer and a modem.
Joe Morton, the newspaper investment analyst said to Ira “Something that’s important to remember about this is that the percentage of the population that is interested in doing this is very small, and likely to remain very small.” When Ira asked straight up “What makes you think consumers want this?" Bill Mitchell from the San Jose Mercury News replied, “The demand for this is very limited”.
So back in 1994, a newspaper expert and a newspaper executive thought that online newspapers, while cool and interesting to some, wouldn’t really take off. Almost exactly two years later, Yahoo did its IPO, with a market value of $848 million. On its homepage was — you guessed it — the news. And we all know what happened with print newspapers.
Of course today it’s hard to imagine that intelligent people who were once experts in the field, could be so wrong about how the Internet would change the way be consume news. It just seems so inevitable, but two things come to mind:
First and most important, things that seem inevitable or obvious today didn’t always seem that way. In fact, at one time they seemed rather far-fetched. Conversely, things about the future that today seem inevitable may actually not be so. The winners of today may not be the winners of tomorrow.
Second, with regards to getting opinions from experts who have a vested interest in the status quo, I was reminded of the Warren Buffett quote “Never ask a barber if you need a haircut.”
For most posts like this, check out How Did Employers Ever Enter the Health Insurance Game? & DirecTV or Cable?