3. Disruptive Innovation
PS3 vs. Wii• “Playing the Game
Differently”
• Creates a New Market
• Transforms or
Destroys Current
Market
• Products Become
▫ Simpler
▫ More Affordable
▫ More Accessible
▫ Customizable
• Drives Growth
4. Technology is Going to Advance and
There is No Stopping it, Even if it
Ruins an Industry…
9. VOIP
• 35% of Businesses Use VoIP
• Allows For One Phone Line
• Avoids Long Distance Charges
10. Communication
• Post Office to Today
• Communication Forms are
Merging
• Mobile Computing Could Replace
Desktops and Notebooks
11. Music Industry’s Current State
• Lower Profit Margins
• Whatever song you want, whenever you want
12. New Music Industry Business Models
• Subscription Services
▫ Pandora, Spotify, Grooveshark
• Digital Download Services
▫ Apple iTunes, Amazon MP3
• Partnering With Tech Companies
▫ EMI and Warner
• Online Album Promotions
▫ The Killers
13. Ethical Questions
• Difference Between Downloading Free Music
Versus Listening to Music for Free Over the
Radio or Internet?
• Is Downloading Free Music Unethical?
16. Disruptive Innovation
• Helps Create New Markets
• Disrupts an Existing Market and Value Network
▫ Can Take a Few Years or Even Decades
• Displaces an Earlier Technology
• Unpredictable
• Designed for a Different Set of Consumers in a
New Market
• Lowers Prices in Existing Market
17. AKA Creative Destruction
• Leads to Paradigm Shifts
▫ A Change in the Basic Assumptions or System
Conditions
▫ Permanently Disrupting the Framework
• The Idea of Punctuated Equilibrium With the
Emergence of New Eras
20. The Future of Hollywood
• Digital Content
• Netflix and Hulu Plus are
Looking at Original Content
• Consumers are Willing to Pay
for Access to Content
• Ticket Sales have fallen 200
million since 2002
21. Early Adoption Risks
• Picking the Wrong Technology
▫ HD-DVD vs. Blu-ray
• Not Following Real Consumer Trends
▫ GM’s Hummer
• Further Technological Innovation
24. “You don’t know when the transition
period will start. The idea is to
understand that it will…
and become prepared for it.”
-Dr. Timothy Bishop
Future Studies, University of Houston
Warner (15%), Universal (30%), Sony (25%), EMI (10%), and Independent labels (20%)Partnering with tech companies to provide free music
Hasbro- received intense competition from video games, attempted and failed to transition- Tiger electronics, dropped electronics division in 2009 and moved into tv and movie related merchandiseGM- Hummer not fuel efficient, too big, not safe, last one produced in 2010Kodak- dominated photography industry for 30 years, slow to move to digital photography despite inventing the technology, finally transitioned but was playing wrong game and didn’t adjust to low profit margin in new industry, could not compete, declared bankruptcy earlier this year; no vision for future and wanted to delay move away from film (still making lots of money), Sony, Canon, Fujifilm