Wednesday I attended the Shift Summit at the Grand America Hotel here in Salt Lake. One of the speakers was Clark Gilbert, president and CEO of the Deseret News Publishing Company and Deseret Digital Media. His specialty is disruptive innovation which he has studied extensively at the Harvard Business School.
He talked about how titans of industry can be overturned, shrunk or entirely passed by because of disruptive innovation. The reason, he said, is because they’re at the top of their game and think of disruptive forces as “Not what we do.”
He asked what industries out there have been stopped dead in their tracks by disruptive influences. The first thing that came to my mind was music, so I offered it as an answer.
Clark then asked a series of questions:
Clark: “Who made the Walkman?”
Me: “Sony.”
Clark: “Who owns three music labels?”
Me: “Sony.”
Clark: “Who owns VH1?”
Me: “Sony.”
Clark: “Why didn’t they create the iPod?”
Bingo.
Goal number one is to identify disruption and get on that bandwagon before it destroys your industry/business/product. A loftier goal is to predict where disruption will happen and be the one to cause it.
The Million Dollar Question
Later someone else asked, “How can one tell if something is going to be disruptive?”
An excellent question.
Clark responded that it’s a lot easier to be a historian/academic than it is a CEO but offered this key insight in the form of a rhetorical question:
“Is it good for the consumer?”
Exactly.
Businesses get very involved in navel-gazing. They focus more on spreadsheets than they do trying to understand their customers. Two examples which are influenced by and the result of disruption: DVDs and DRM.
Digital Rights Management
Companies are so busy trying to protect their content (such as music and software) from piracy that they make it a royal pain in the butt for the people who paid to use it.
Case in point: registering software. You have to fork over your name, address, phone number and email address. Then you have to enter a difficult-to-type 32-character license key (which, if you ever lose, you’re out of luck should you want to reinstall the software) and then hope the verification process works. Adobe recently made their software check the license each time the software was opened, meaning you had to have an Internet connection to use Photoshop. Terrible.
Then you have to sign your life away and accept their “terms of service” which are long and written in legalese. My son probably belongs to Microsoft and I don’t even know it.
Meanwhile, the people who don’t pay for the content and steal it online don’t have to deal with the DRM which was meant to prevent them from getting it in the first place.
Who has the better experience?
DVDs
How about watching a movie at home? You can’t just put in the DVD and hit play. You have to sit through ten minutes of junk the studios want you to watch (multiple trailers, clip montages promoting the studio, seemingly endless “So-and So Studios” and “Produced by One Guy Productions” and “A Subsidiary of that Other Studio” and “A Fill-in-the-Blank Venture”) and, ironically, warnings about piracy, before you get to what you really want to watch: the movie.
Want to put the movie on your laptop to watch on a business trip? Nope. Kids scratch the disc? Out of luck.
Again, the person who downloads the movie off a torrent site for free doesn’t have to deal with any of the restrictions placed on paying customers.
Is there a solution?
I recently heard of an actor who pirates his own movies. Why would anyone do that?
He said he looked for the movie on iTunes, Amazon, Hulu and Netflix. He was willing to pay for it but couldn’t find it anywhere. His only option was to download an illegal copy. So he did.
Dear Studios, this is what is affectionately known as “cutting off your nose to spite your face.”
Here’s a crazy idea: make it easy for people to find your content and pay you for it. Finding anything you want to watch should be a no-brainer. The only trick should be to create a superb buying experience at a fair price.
