What Can Innovators Learn from Disruptive Streaming Video Providers?

The Internet has disrupted many industries over the past decade. The traditional television industry is now the latest victim of this disruption. Thanks to the wide availability of low-cost, high-bandwidth Internet access, on demand streaming video services have grown rapidly over the past few years. Such “real time entertainment,” as it is called, has taken a 62% market share in North America during the first half of 2013 according to a survey by Sandvine. Netflix has almost single handedly created a big disruption in this industry. It has a staggering 89% market share in video steaming services in the U.S., followed by HULU and Amazon Prime.

There are four main reasons that on demand services are growing and threatening to wipe out traditional TV.

Adaption to technology
The streaming services have very quickly adapted to new technologies. They started with online video streaming on computer desktops, but understood the rising demand of tablets and smartphones and started offering applications for Android and iOS. These new apps give users access to their favorite shows on the go from their phones and tablets. They now have the choice to watch on whatever device they want.

netflix and hulu plus streamers

Strategic partnerships
Netflix and Hulu have partnerships with leading movie and television producers, giving them access to many movies and TV shows, both new and old. The variety of entertainment available to viewers has attracted a huge number of customers (Netflix is said to have more than 40 million streaming subscribers globally). Netflix has also partnered with digital media streaming hardware and console companies to support their services, making it even easier for customers to access the entertainment they want, when they want it.

Cost structure
Murdoch-quoteBecause of the large user base and also low overhead – no physical stores and, in the case of Hulu and Amazon, no physical inventory – on demand streaming video services can afford to offer customers a good deal. They are typically freemium and subscription based. HULU offers some of its content for free with advertisements. If the viewer wants to watch ad-free programming, he has to subscribe for a monthly fee. The monthly subscription fee is very reasonable, especially compared to the cost of traditional cable television, or even the cost of traditional movie rentals.

Exclusive content
It’s easy and low cost for customers of on demand streaming video platforms to switch from one provider to another. Thus, there is a need for original content to keep customers interested. Netflix started producing its own TV shows – like the Emmy award winning “House of Cards” – which gives users privileged or exclusive access to shows that cannot be viewed on any other platform. Other services, like Amazon and Hulu, are following the same concept of producing exclusive shows, and have been in successful in getting viewers’ attention.

What can other businesses learn from on demand streaming video providers?

If you look back at the reasons above that on demand streaming video services have been so successful, you can derive several lessons that can help any organization be more innovative, even disruptive.

  1. Adapt to technology quickly, especially technology that your customers are using and that makes it easier for them to consume your product/service.
  2. Form relevant partnerships that help you deliver more to your customers – more variety, more cost savings, more quickly, whatever you can do better than the competition.
  3. If you can offer a comparable product/service for less than the competition by targeting a new market (young Internet-savvy movie fans, in this case) you will disrupt your industry.
  4. Invest in exclusive products/services/features to attract new customers and distinguish you from the new competitors who always follow in the footsteps of a true disruptor.

AmazonFireTVThe future of on demand streaming video services

The UAE has its own prominent streaming video service, Icflix, which was started a couple of years ago. The biggest differentiator is that it provides regional content to suit local audiences. As with other streaming services, membership is offered on a subscription model and rates are quite modest.

With the UAE having 77% internet penetration, I predict there will be plenty of regional players to tap in to this market. The future for these steaming services is bright and competition will be intense. It remains to be seen how the global service providers will expand to other markets and compete with local players.

Want to disrupt YOUR industry? Contact us.

3 Reasons Why Companies Fail at Intrapreneurship – and How to Succeed

Intrapreneurship, or creating a startup culture within an existing large business, is a fairly well known element in corporate jargon these days. With a new wave of urgency sweeping the corporate landscape and the threat of extinction, it is not surprising that large companies have started looking to intrapreneurship to help them fast track new offerings and explore innovation opportunities. This article is not an effort to describe the merits of intrapreneurship, but instead is aimed at highlighting a few reasons why companies are unsuccessful at inculcating intrapreneurship or startup culture into their normal activities.

What is IntrapreneurshipWe all like to emulate the Apples, Googles and Starbucks of this world, and in desperate attempts to start something new, many companies rush forward in what they claim to be well-thought-out-strategies for successful intrapreneurship. These attempts are often related to mission statements, vision statements, goal setting and trainings.

In this article, I will highlight three major reasons why many attempts by large companies to engender intrapreneurship have ended in failure.

Art versus Science

Developing a sub-culture within a larger organization is difficult, and rushing ahead optimistically without a solid plan will not work. However, the process of engendering intrapreneurship is usually not subjected to the same amount of thoroughness that other processes like financial planning and budgeting are. Until companies begin to see the cultivation of an intrapreneurship culture as a science, they will most likely leave the results of their efforts to serendipity.

The Solution: Intrapreneurship should be managed with a paradigm of causes and effects, inputs and outputs, and planning and scheduling. In other words, building this kind of culture should have its accountability points, dedicated resources, and gates of evaluation. At LinkedIn, for example, employees can propose a new idea once every quarter. They form a team to work on the idea and pitch it to an executive team. They are then given three months to work on the idea and improve its viability. These kinds of processes – coupled with the appropriate enablers, such as an online idea submission portal – provides a method for intrapreneurship and makes it repeatable.

[Read more...]

Innovation Management: A Paradigm for Change or Simply a Buzzword?

innovation-quote-jobsEver since the world has become aware of the importance of innovation, almost every company has created a strategic plan toward becoming more innovative or toward jumpstarting its innovation journey. While the amount of buzz around this topic is commendable, it is not difficult to see that innovation is more of a lip service and buzzword for a TV commercial, than it is a crucial strategic goal of many organizations. In other words, the low level of adoption of innovation as a strategic goal and as part of a management program depicts a lack of clear understanding of what innovation is and the consequences of not putting resources toward it.

Has this always been the case? If we take a historical look at the adoption of management methodologies, we can get an inkling of what is currently happening with the adoption of innovation management.

In the middle of the last century, most management methodologies, processes and tools were focused on enhancing productivity (with Ford Motors taking the lead in the 1920s). However, by the 1980s, it was apparent that Quality Management was the next big thing. This later took the form of TQM (Total Quality Management) and Six Sigma, and no doubt companies invested massively in efforts driving quality management in the early 1990s.

Studying the evolution and adoption of these management methodologies, one can safely assume that a good definition of adoption is when corporations actually put their money where their mouth is. In other words, when they invest in the execution of whatever strategy they have developed—whether it is increased productivity or quality.

A good way to see this adoption lifecycle will be to actually subject it to the theory made popular by Everett Rogers in his book “Diffusion of Innovations”. While some may argue that management concepts can hardly be subjected to the diffusion model due to the wide application of this model to products or general ideas within a social system, I think it may be useful in understanding the response of typical companies today to important concepts in management—most especially, innovation management.

Diffusion-innovation

The Diffusion of Innovation theory explains that there are five categories of adopters of an idea or a product: innovators, early adopters, early majority, late majority, and laggards. We can apply this to the concept and practice of innovation management as a management methodology and principle. [Read more...]

Turning Your Business Model On Its Head

Editor’s Note: We’re pleased to share this guest post from one of our innovation partners, Braden Kelley. Braden will be in Bahrain on October 24, 2013 to deliver an Innovation Masterclass

Some business models and products have been around so long that we just take them for granted, while others concepts that are becoming new business models are so new that we’re not quite sure what to expect. It is probably easiest to explain what I mean and why this juxtaposition is important by looking at a few examples. Most of these examples involve challenging our orthodoxies.

1. Coffee Shops

Coffee Shop PeopleIn the typical coffee shop pretty much anywhere in the world, the business model works like this – you buy a coffee and it comes along with it the right to take up a place at any table in the café for as long as you want. So, coffee buys you time. An NPR article I came across highlights an entrepreneur in Moscow that has opened a restaurant that loosely translates to the Clockface Café,where instead of buying coffee and getting time, you instead buy time ($4/hr per person for the first hour and $2 an hour after that, up to a maximum of $12 after 5 hours) and get coffee for free. Ivan Meetin, the founder, plans to open his next café in London. Meanwhile I have heard of similar operations in Paris, and by now they can probably also be found elsewhere.

In your business what do people get for free, and what do they pay for? And is there an opportunity to change around what you charge for?

2. Waste Disposal

In many businesses, and in the creation of most products, there is waste. And in most cases, businesses pay to have this waste removed from their premises. Or there may be waste that the customer has to pay to have removed. But this doesn’t always have to be the case.

McDonald’s, Burger King, etc. used to have to pay to have their used fryer oil picked up, but now thanks to the rise of biodiesel they may even make money from this waste product. Broken OREO’s used to have no value before Cookies ‘n’ Cream ice cream (and now Cookies ‘n’ Cream OREO’s) were discovered.

Building CapsSpeaking of “trash,” I came across an example of a bottle cap concept created by designers from the Lanzhou University of Technology in China, intended to give poor children access to building blocks for play, from what was previously thrown away.

Is there anything in your business that you deem as waste that might be valuable to someone else, or even to your own business if you could determine an innovative way to re-use it?

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Why Companies Need to Rethink Their Core Competence

Many companies like to compete on the basis of their core competence. However, core competence as a concept is sometimes dangerously over-emphasized by managers and Human Resources directors. This is largely due to the fact that the organization has succeeded in certain ways in the past, and through these past successes, they have developed robust frameworks, processes and other internal capabilities such as talent and skills development programs.

While these are praiseworthy and laudable efforts, organizations should constantly ask themselves tough questions about their core competencies. In my previous post, “Yesterday’s  Success may be Tomorrow’s Enemy,” I pointed out the fact that an organization’s innovation from yesterday may not be enough to say that it is ready for sustainable innovation. Core competencies that only rely on past successes can also hinder innovation.

Companies that go beyond their core competence tend to be more successful and outlast their counterparts. A few examples include:

  • DP World has progressed from Ports Management to Logistics Supply Chain Management, and is currently sponsoring a startup seed accelerator to find innovative ideas even further past its core competence;
  • Bloomberg L.P., which began as a provider of basic financial data, is described today as a financial data, software and media company;Google Driverless Car
  • Google still maintains its core competence as an internet search engine, while having expanded into many other related and often innovative endeavors, the latest being driverless cars.

So while it is recommended that companies go beyond their core competencies to innovate and remain relevant to the market, care must be taken with regard to the right move or direction to take. Going too far outside of your core competency can result in inefficiencies, mistakes, and confusion for both employees and consumers. Timing is also important, as is market demand. [Read more...]

Where Do Ideas Come From?

(By Vida Rizq and Lotfi Bencheikh, Aflamnah)

On the roof of the world, there is a wise old man who generates ideas and throws to the window just like a dandelion spreading itself thin. Unlike the dandelion, they are endless. These sewn ideas fly everywhere and land on everyone. They respect no colour, no creed, no gender and geography. Ideas blowing in the wind?This is what I read somewhere.  Is this an attempt to explain that ideas are made somewhere unreachable and unattainable? Perhaps it is?  But this is a mythical and a visual representation of the origin of ideas.

Ideas are born out of chaos, not a methodical and structured thinking process. They are the results of an electrical and physiological process happening inside the human brain when neurons get excited and started creating new connections and forge new pathways that can lead to somewhere or nowhere. They can lead to ideas or half ideas.  If we look at the language we use to describe the process of coming up with a “bright” idea, the moment is fully “charged” with sparks of electricity: albeit invisible to the naked eye. Is this accidental or are we trying to frame an invisible process in flowery language to convey that idea? But what triggers this internal electronic storm inside one’s brain? “Brain storm.” Many things can do that. It can be a word, a colour shade, a shape, a song or a phrase or simply another idea. It can also be the result of a recent or old idea that you thought of, a thought you never finished processing. It can happen while awake or asleep. [Read more...]