Rise of the Digital Consumer
I overheard two blokes, on the elevator, discussing golf last week. "Have you seen the app for The Masters? It's incredible - the best app ever." one of them said. I thought to myself: An app for a golf tournament now leads the technology universe?
Soon enough, I read an article in the New York Times that touted the very same app. The reporter said that the customized Masters app drew him in to the point that he'd stopped watching the tournament on television. Yet the network that paid to broadcast the Masters and the sponsors who bought rights to advertise during the TV coverage must be a little less enthusiastic about this great new app. All that bundling of TV airtime and broadcast advertising - and even shots provided by the Goodyear blimp - takes the sort of effort that requires a captive audience to make it all profitable. The issue is that the captivity just isn't happening anymore.
Why? Because we consumers are getting what we want ... the way we want it. In the 1970s there was an ad for Burger King that touted the same sentiment: "Have it your way." The idea was that you didn't have to accept an assembly-line hamburger with ketchup, pickles, and lettuce if, say, you only wanted mustard on the bun. It's taken a while, but the same phenomenon is occurring in the world of infotainment.
Consider the rise in popularity of web sites like Hulu. You watch what you want when you want it - without commercial interruptions. One side story to this changing viewer model was an expensively produced police drama that one of the networks decided to pass on after half a season. In the old days, that would have been the death knell for that particular show. But the producers shopped the show around to cable channels with the knowledge (or some might call it an amazing amount of confidence) that because their show was a quality production, it would find a following via cable and Hulu. And it did. Suddenly network executives, once the gatekeepers of everything on television, ceded a bit of their power to the end user.
The consumer is finally getting to choose what she wants to watch or read or buy. Think of the possibilities. Not too long ago, an aspiring novelist would have to shop his manuscript around to dozens of publishing houses. Nowadays a good writer might have a chance to bypass a publishing house and serialize his material straight onto an e-book or his own Web site. Then, supposing he gains a fan base, he could begin charging for ad space on his Web site from corporate sponsors who want to reach the highbrow, affluent readership that enjoys his books. Whereas it used to be solely the realm of a publisher to decide what books to print and market, now the user (the reader) can decide who will write the next bestseller.
Today, business models will continue to evolve. And one thing is certain: These disruptions have dislocated entire industries while empowering a new generation of consumers. Indeed, "having it your way" is having a direct effect on what's known as the middleman. The book publisher. The television network. The newspaper employing hundreds of reporters in dozens of bureaus around the world. All of these enterprises depend on the ability to control what gets to the end user. Now that the guy sitting in his favorite armchair can scan for a customized menu of news and entertainment, it leaves those organizations with fewer prospects to charge a premium for what they produce.
That's the disruptive power of innovation.