Waste. Consumers can smell it a mile away. They hate it. They know they are paying for it somehow. Waste is inefficiency and successful businesses of today and tomorrow find ways to strip it out. These organizations are labeled “disruptors” and they will continue to upend established businesses and models. At the core they are really:
1. Recognizing, indentifying and stripping out waste creating a tighter value proposition.
2. Leveraging the internet for distribution
3. Leveraging the computing power of internet connected devices
4. Often, using some sort of network effect (i.e. social media, crowd sourcing)
Some rather obvious examples:
People listen to songs and prefer not to buy whole albums. Most albums apart from a song or two are just filler – waste. itunes and spotify are the obvious poster kids here providing direct access to songs without the waste.
People read articles and don’t necessarily read or buy entire magazines and newspapers. Much of magazine / newspaper content is filler, including the advertising… and not to mentioned the physical product is at some point waste and recycled. Huffington Post, Google news and other aggregators.. or publishers like Vox, Quartz, the Verge and Medium are all pioneers.
People watch TV shows, not channels or cable subscriptions. They certainly don’t want to pay for a bunch of channels in their cable bundle that they never watch. Netflix, Aereo and now HBO GO are great examples of organizations striving to get shows to viewers without bulky subscriptions and even advertising.
Wrapped around the waste in any category, is a clump of middle people, regulation, licensing, taxation and monetization awaiting to be dislodged.
It is very interesting that HBO has made the move augment the cable TV subscription model to go direct to consumers (in US only). What will really disrupt the TV subscription model will be when ESPN does something similar. However, with so much TV related revenue being paid to sporting leagues I struggle to see this anytime soon. Which is a shame because being a chord cutter myself – I know first hand that the only part of “TV” I miss is live sports. Sports right now is the glue in the subscription cable model…but there is lots of waste in the model and lots of opportunity.