The Guardian's decision over when to kill the cash cow

It was fascinating to read Picard's "Cash cows or entrecote" article the same week I read all about Newsweek killing its print edition and The Guardian being rumored to do so. The Guardian, it seems, is very publicly dealing with the exact same decision that Picard writes about in his article -- at what point do they "kill the cash cow" and drop print altogether? As this paidContent article explains, the Guardian's executives have determined that they're going to have to go digital-only at some point, and probably sooner than they initially expected.

But print is still generating the vast majority of its revenue, so that time hasn't come yet. Basically, it's trying to  rapidly ramp up its digital revenues to the point where it could turn off its print revenues and survive. It seems they're operating from a similar mindset as Picard: You can't kill print and hope you can then generate enough digital revenue to survive. You have to bring up the digital revenue first, and then kill print when you've reached that point and you're ready for the transition. Newsweek seems to be doing the previous strategy, which is being widely mocked as an instant loser. The Guardian is approaching things much smarter.

I think Picard's rule of waiting to switch until the whole operation (rather than just print) is losing money is a bit too conservative. But I do like the wisdom of his patient approach. It seems like a natural response to the foolish eagerness some executives might have after reading Bower & Christensen's article -- "This technology is disruptive! Quick, let's jump on it!" Instead, Picard is saying, "Sure, go ahead and pursue it, but don't drop your old technology until you've fully harnessed that new one." It's a needed bit of levity in the midst of the panic in the news industry over digital disruption.

Along those same lines, this is a good explanation from this week by Nicholas Carr of why more publishers don't drop their print editions. It covers some of the same points as Picard, but in more casual, non-academic terms.