One thing we can predict about the new ways that people will interact with television is that the new uses will surprise us. As has been the case with the way many new technologies have been adopted in the past.
I think we can expect significant shifts in people's television consumption patterns. I think we will see totally different time usage patterns, from snacking on little 5-minute clips here and there to all-out binging, such as seeing an entire season of shows in one or two sittings.
Consumers are going to be increasingly impatient with having schedules, formats and content dictated to them, and will be more interested in personally tailored experiences.
Such changes certainly will shift the funding model for television, in which network executives seem to think you are some kind of criminal if you skip their ads. One outcome is that advertising itself is going to have become more like entertainment than the ads we in the States are used to (which by and large are boring and an interruption). I think we will see higher prices to place finely tailored ads.
I think one trend that will surprise us is that many people will volunteer to receive ads � but only for products in which they are deeply interested. For instance, if one has a passion about a hobby or interest, you might volunteer to be informed of new products and services that are relevant. In this way, ads will become one more way to bond a community together.
What will get zapped are stupid ads for things we are not in the market for at all, and that is as it should be.
Advertisers and the media in general are going to have to create communities around their outputs. I don�t think that threatens mass market phenomena, by the way. I mean, if you add up all the *who wants to be a millionaire* watchers worldwide, it would be a significant number. Which reminds me also that traditional TV will probably have to retreat for primary to events that are time-specific, such as sporting events or contests. Everything else, I think will be consumed by people on an on-demand basis.
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- Posted Admin on April 20, 2007
Quick, do you believe that smaller, leaner corporate headquarters are associated with higher performance? A recent study published in the Strategic Management Journal suggests that such a taken for granted belief may not make sense. A very insightful bit of research -
Here's the citation:
Collis D, Young D, Goold M. 2007. The size, structure and performance of corporate headquarters. Strategic Management Journal 28: 383-405
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- Posted Admin on April 13, 2007
I was recently asked to comment on whether Web 2.0 is a 'bubble' - here's what I think.
Both web 2.0 and the dot.com surge are/were driven by a common human bias: this is to over-state the implications of major societal/business/regulatory changes in the short term and to under-state them in the longer term. The dot.com era companies were, in many cases, prescient. The problem was that they did not quite factor in how long the changes would require to generate cash flows in the near term.
If you look at the statistics, a lot of the predictions made for the dot.com era have by now come true. The Web is destabilizing industries ranging from media to retail to telephony. More and more people all over the world are buying via e-commerce. I believe something like 30% of retail transactions have some e-commerce aspect to them (whether it is searching or getting information as well as actually ordering on line). Efficient markets for everything from the stuff in your closet (eBay) to obscure sound tracks (ITunes and other sites) and even your mate (think match.com) have been facilitated by the Web. It just took 13 years, not 3, for the changes anticipated to become a reality.
The other big myth is that first-mover advantage will go to the biggest and earliest entrant. We found it wasn’t true in the Dot.com era (think Value America or WebVan), and I predict it won’t be true in the social networking/YouTube/Myspace era either. The extent to which a model is sticky is vastly over-estimated in my opinion. If all my friends are on Myspace and I go there because of that, what happens when they all move to another place? What’s to prevent them? More importantly, what happens when a site like myspace is
...so yesterday, my kid sister is on that...
and the hunt begins for a newer cooler place to be?
A lot of the flurry over web 2.0 is simply the realization of the power of the Internet and the maturing of some business models (eg, advertising based models) that were NOT foreseen during the dot.com era. Indeed, remember when everyone was so hot on eyeballs but nobody knew why? My poster child on this one is the $780 million Excite@home paid for Blue Mountain Arts, a free greeting card site that had 54 million unique subscribers, but no revenue model. Well, we’ve now found the revenue model and it is advertising. Excite had to sell the site for a humiliating $25 million a short time later to American Greetings. Today, it’s Provide Commerce selling roses to go with the cards that is racking it in, affiliated with the Blue Mountain site.
So what you are seeing now is a resurgence of investment and interest because the Internet-based revenue model (like the TV and radio models that came before it) promise to redirect the billions companies spend on advertising to where users are actually spending time.
Will it have some bubble like features? Absolutely. This unfortunately seems to be how we learn as a society about new business models in a major way. Bubbles have accompanied just about every major technological transition in our economy. Are there some differences between the dot.com era and now? Yes.
Some differences:
There is more emphasis today on having a revenue model and something to actually sell
More and more young companies are building up to be bought out, rather than to go IPO. This means that they are targeting a useful innovation for another company (like Google) rather than trying to lure investors into a big-bang IPO.
There is a bit more maturity about the whole Web phenomenon and investors are looking more for the fundamentals.
Many smaller businesses can now be started for a song, so the downside is lower if they fail.
Are there some dangerous similarities we should be alert to? You betcha
Waaaaay too much money sloshing around looking for a home. When $50 billion companies are in play by hedge funds and private equity investment firms, you know that some big investors, desperate for higher returns, are going to start getting a little careless about their investment standards just to get/keep the deals flowing. That behavior feeds a bubble in almost all cases.
This has the effect, counter-intuitively, on making normal M&A too expensive for normal companies. What that does is begin to put a premium on organic innovation (growth from within through corporate venturing) as well as smaller acquisitions to create new capabilities for established companies.
While all of this works as long as the party continues, once we start to see some of those debt-ridden large companies stall in the market or there is more regulation of these investment vehicles or interest rates come up, or risk appetites sharply drop, it’s like a game of musical chairs – the last investor standing will be dealing with a sharp loss of value.
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- Posted Admin on March 18, 2007
Our colleague, Walter Derzko gives some interesting insights into why good ideas don't get results - see his blog at -
http://smarteconomy.typepad.com/smart_economy/2007/02/why_good_ideas_.html
With respect to innovation, one study suggests that you need 3,000 ideas to get one commercial launch - see this article: Stevens, G.A., J. Burley. 1997. 3000 raw ideas - 11 commercial success! Research Technology Management 40(3) 16-27.
In a recent study my colleague Thomas Keil and I have just finished, we found that very different management processes are needed to make sure that outcomes other than launch result in good ideas getting circulated in a company.
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- Posted Admin on February 22, 2007
I heard a fascinating statistic the other day that really should give all of us pause. It seems that 2/3 of all jobs in America require a college education, yet only 1/3 of the potentially eligible population goes to college in this country. Either we are going to have to drastically ramp up our numbers enrolled, or we will face an even more serious skills crunch than we already have for employees with sufficient skills to work in our new economy. That was really interesting.
Another issue that I don't think we have grappled with very well is the fact that as the economic basis of our businesses change, the skills we need to deploy change as well -- and yet we make few provisions for upgrading skills throughout the life of an employee, consistently and on a planned basis.
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- Posted Admin on February 22, 2007
