Posted by: Ivan lybbert | January 8, 2010

ABC News Killed Their Cash Cow

I’m not usually one given to expressing opinions outside my realm of expertise (some of you may wonder why I have a blog about Product Management then!), but I watched something unfold a few weeks ago that still has me scratching my head.

Everyone has their own way of digesting the news each day.  Some read the newspaper every morning, others digitally digest it on phones or computers, and there are still a few of us who like to watch it on TV.  Sure, when I want the facts as fast as my A.D.D. mind can take them, I’ll use my iphone and drink from that informational fire hose.  But on most days I’ll watch ABC News’ most successful news program, Good Morning America, while getting ready for work.  Somehow between Diane Sawyer, Robin Roberts, Sam Champion and others, they had a certain chemistry that always made me come back for more.

But then they changed it.

You know what happened.  Charles Gibson stepped down from the Evening News position, which caused ABC News to tap their best anchor candidate, Diane Sawyer, to the coveted seat, which caused George Stephanopoulos to get promoted.  I suspect they wanted to take Diane’s “secret sauce” to the ailing Evening News.   But with that single move, they lost two birds with one stone.  Don’t get me wrong, I love to watch each of these individuals and think they are very successful in their own right, but their combined chemistry was riveting.   Now we have Diane Sawyer conveying news in a way that doesn’t show her personal strength, and Robin Roberts doesn’t have a playful bantering companion.   Now they have two shows to fix, instead of one.

In my opinion, ABC News committed a rookie product management mistake:  they messed with their cash cow only to find it on the sacrificial altar.

If you’ve ever been a product manager over a product labeled a cash cow, you’ll understand the temptation to mess with it in the hopes making it “better”.  This happens when the product manager takes their eyes off the customer.  The insatiable desire to selfishly focus on “What can I fix next?” overpowers the company-minded “How can we give greater value to the customer?”

The trick with managing a cash cow is to maintain the same market share and revenue for as long as possible while keeping its operational costs down.  It’s a delicate balance that requires great understanding of the product.  The last thing a cash cow needs is a cowboy product manager to come in and start changing things without the knowledge of what makes their product successful, or unsuccessful.

Lastly, a product manager needs to know when to intentionally kill the cash cow.  This isn’t simply a balance sheet decision.  While most only think of the costs of keeping the product alive, one should also consider the opportunity losses of NOT creating a newer, better product with the same resources.  But before you kill the cash cow, make sure your new idea is actually a good one (D’oh!).

Who knows, maybe ABC News should kill the Evening News (does anyone really watch it anymore?), create Good Evening America, then make the news as interesting to watch as a sitcom.  Now that’s a product with legs!

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