These are scary times for cable and satellite television veterans. Hardly a day goes by without news about disappearing viewers and shrinking revenues. And why? It is called industry disruptive change or otherwise known as digital disruption.
We live in a moment of history where change is so speeded up that we begin to see the present only when it is already disappearing.
So said R. D. Laing. R. D. certainly has that right, doesn’t he? Think about it for a moment and I’m sure you can come up with several examples.
These are the cable and satellite providers that many of us fork over more than two thousand dollars of our hard-earned money to, year after year. And even though we’re seeing more ads and less real programming than ever.
The cable/television industry is going through what we call a “disruptive” change, a phenomenon that has transformed many other industries.
A crucial point to remember is that you can’t dictate change by mandate. You can’t overpower, but must attract people and empower them so that they can take ownership of the cause and make it their own. You need to accept that people will do things for their own reasons, not for yours.
Most of all, remember that every action has to have a clear purpose and be directed at influencing specific institutions. So before taking any action, ask two questions: Who are we mobilizing, and to influence what?
The bad news is that when the dust of disruptive change settles, historically even the best-run companies typically end up in the loser’s column. In the computing industry, for example, Digital Equipment Corporation missed the personal computer (P.C.) in the early 1980s, started to fall apart in the early 1990s, and got acquired by Compaq in 1998.
Dell Computer’s low-cost business model destroyed Compaq, forcing a merger with Hewlett-Packard (H.P.) in 2001. Dell’s continued incursion into the P.C. and printing office now threatens H.P., which announced more than 10,000 layoffs last year in an effort to remain competitive.
It’s the same thing that happened to the book industry with Amazon.com and now e-books on demand. It’s the same thing that happened to the financial industry when they started trading stocks online instead of using traditional stockbrokers.
And to the record companies that once ruled the music industry with an iron fist. And the typewriter industry with the advent of word processing on the computer.
In 1892, George Eastman formed the Eastman Kodak Company to “make the camera as convenient as a pencil.” It was an idea whose time had come and by the early 20th century, Kodak emerged as one of America’s largest companies and Eastman one of its most successful entrepreneurs.
It wasn’t just that one idea that made the company so successful, it managed to stay on the bleeding edge for over a century, pioneering impressive new advancements in photographic paper, development and image processing. In 1975, it invented the digital camera, which would lead to its downfall as a major corporation.
The problem wasn’t that Kodak didn’t understand the potential, but that it became stuck in its operating model. It was so huge and so profitable, that almost any other opportunity seemed small by comparison. While Kodak is an extreme case, many others fail in new markets for similar reasons, they fail to bridge the gap between innovation and operations.
Why Amazon Is Most Innovative Company? Our Answer May Surprise You
The list goes on and on.
Did people stop traveling? No… they stopped paying travel agents. Did people stop talking on the phone? No… in fact, they started carrying their phones in their pockets wherever they went! Did people stop buying stuff?
No… but enough of them stopped buying it at big box department stores that the industry is now collapsing almost overnight.
People want what they want when they want it, where they want it, and how they want it! And if we don’t figure out a way to give it to them, they’ll get it somewhere else.
We live in the age of digital disruption – a time when organizations are challenged to transform . . . or die. That’s not an overstatement in an era where household brands are both materializing and disappearing on a near-daily basis.
Technology is advancing at a mind-boggling pace, and innovative businesses are launching all the time, each raising the bar on consumer expectations just a tad higher. The average business is massively challenged by the demand for near-constant transformation.
The forces of digital disruption are radically altering how we all access and consume information, communicate and socialize, shop and purchase. Ubiquitously connected devices, social networks, cloud services – these and other innovations have already essentially inverted the relationship between sellers and buyers, between brands and customers.
Consumers are empowered by information and shared opinions, and they are emboldened by choice. They have developed an appetite for rich and rewarding interactions, and they rarely hesitate to seek alternatives when disappointed. Increasingly, companies will succeed and fail according to the quality of the digital experiences that they offer.
So what is going on with alternatives or substitutes to cable and satellite services? For everyone who LOVES television but HATES being forced into a raw deal, there’s been a lot of good news lately:
Industry disruptive change … new options
In the past month, more than 200 billion videos were viewed online. And these videos include real, full-length TV shows like the ones most of the millennials like. In fact, 83% of viewers aged 18-29 say they watch some, most, or all of their shows online.
And it’s not just a youth phenomenon…more Americans are now watching videos online than on TV. 58% now say they no longer need their TV at all.
Industry disruption examples … new technology
The Sony PlayStation, Microsoft Xbox, and Samsung Smart TV can all pull your favorite TV shows directly from the Internet to your TV screen.
So can the Boxee and the Roku, which cost around $100 at Wal-Mart. A new web-based service called Aereo even does it with no “box” at all.
New laws
On the morning of June 12, 2009, all television broadcast signals became digital instead of analog. That means TV shows are now downloadable data that can be watched conveniently on a computer, smartphone, or iPad.
And, as The Wall Street Journal points out, it also means that the cable and satellite companies are hoping you won’t realize that crystal-clear, high-definition viewing of most key sporting events and every network TV show takes nothing more than a new pair of digital rabbit ears!
Industries that need change … new independence
According to Forrester Research, 45% of households will soon own a device that allows them to “time shift” their viewing (like a DVR). By skipping commercials and breaking out of the network programming schedule, viewers can make TV a personal experience instead of a mindless “broadcast.” And 94% of us are also enriching that experience by multi-tasking with emails, text messages, cell phones, and social networks while we watch.
All these trends are starting to add up in a big way.
Notice for the first time … the percentage of households with a cable or satellite subscription is now declining for the first time in the history of television.
More than 3 million Americans have already cut the cord.
And Sunday Night Football is just the beginning.
Look it up … every Sunday Night Football, every Major League Baseball game, every NHL hockey game, every NBA basketball game, and every “March Madness” tournament game is available online for free or for a low subscription price. So is a lot of ESPN’s content.
Even the NFL is inching toward direct distribution. In addition to the Sunday night games, you can watch every other game online with a “tape delay”.
I mean, millions of Americans dropped newspapers, long-distance telephone service, bookstores, traditional stockbrokers, record companies, travel agents, and department stores, even though they were actually quite happy with those businesses. It’s just that something better came along.
The bottom line
And it has at least partially arrived and moving like a freight train. So if you are looking for alternatives cheaper than the $1000-3000 per year that you are now paying for cable or satellite, start your research for these alternatives/substitutes.
And as they become more available more people will switch, driving up the cable/ satellite costs and speeding up the ultimate disruption.
Today we need to manage not for stability, but for disruption. So instead of just planning against established metrics, we also need to continually ask what we’re doing to explore the unknown.
Not all who wander are lost.
