A New Look for an Old View

Focus: STOCKS

Marc Gerstein Image Marc Gerstein Editor, Forbes Low-Priced Stock Report

It's a pretty straightforward business, but this company has revamped its business model and will be gaining ground as the economy improves, writes Marc Gerstein of Forbes Low-Priced Stock Report.

Creative destruction is a term we’re likely to hear a lot as long as Mitt Romney is in the Presidential race.

In this regard, a January 14 Forbes.com article entitled “Creative Destruction Is Not a Management Philosophy” sums up the essence of what’s taking place at LodgeNet (LNET), the dominant supplier of television programming to hotels.

The business is OK given the tendency of hotel guests to watch regular TV and periodically order premium content. But indefinitely staying the course might lead to a poor outcome for LNET, given the way the world is changing—particularly the way the proliferation of laptops, smartphones, and tablets are making it easier for hotel guests to get in-room entertainment without using anything supplied by the hotel, except perhaps Internet access.

But LNET is doing exactly what Adam Harting, the article's author, proposes: avoidance of “more of the same” (the Kodak (EK) formula) and instead being “willing to learn from trends and steer in the growing direction” (a la Apple (AAPL), et al).

One new trend involves dealing with Hollywood in such a way as to give LNET access to new movies just 60 days after theatrical debut, well before cable and streaming services.