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From Interruption to Engagement |
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Discontinuity, does it hurt?
Mobile phone operators are about to become a commodity like water or petrol. The competitive stakes are rapidly being raised as advanced mobile service propositions are increasingly attracting competitors from outside telecoms. In the meantime Music Television (MTV) launches its own mobile service in Sweden. Why? Because voice and digital data are globally, worth $1trillion, and its brand, in a youth market hooked on the mobile phone and music, strong and credible. Hollywood and the Gaming industry vie for 2nd position at approx $30 billion. And it does not stop there. It is Vodafone vs. AOL; MTV vs. the mobile operators; utility companies vs. telephony and many other forms of distribution; the music industry vs. the consumer voicing their unhappiness by using P2P sharing and digital piracy; the music industry vs. online retailers and ISP’s; retailers vs. multiplex cinemas and any other form of entertainment; TV vs. the retailers, as the moving image enters centre stage via plasma screens into retails marketing strategy. Draw your own map of what is going on in your industry. Your marketplace is changing at the speed of light and the consumer, 'Us', sits centre stage asking "and what’s in it for me?"
In a recent paper, Adam Singer refers to Stephen J. Gould’s theory of punctuated equilibrium, which states that in evolution there are periods of stability punctuated by a change in environment that forces relatively rapid adaptation. Singer concludes that we are in a similar situation with the media, citing how the status quo was unravelled by HBO's influence on the American networks and by the introduction of The Independent newspaper in the UK provoking a frenzy of activity within the NewsPress industry. SMLXL believes, we are in a moment of punctuated equilibrium that has resulted in fundamental changes and new conditions within our economic, political, and cultural systems. Marc Pachter and Charles Landry in their book Culture at the Crossroads, believe these new conditions include: the ascendence of the marketplace as an arbiter of value and taste and the rise of the entertainment industry; the rise of the knowledge-based economy; the demand by many publics to participate in defining the values and purposes of society; challenges to the unified canon of knowledge in many fields and a blurring of intellectual boundaries; the growth of multicultural national communities; the reordering of relationships between the sexes; changing conceptions of space, time and tempo particularly driven by technological advances. As culture converges into the marketplace, the concept of rigid institutions, industry sectors ring-fenced from each other becomes seemingly 'old-fashioned'. The spirit of our age is one in which science, economics, and politics challenge the notion of fixed categories, perceived oppositions, and impermeable boundaries. Technology changes the way we interact, the way we shop and consume. It creates new opportunities and destroys businesses that are unable to adapt to a sudden discontinuity with our past. Quoting Susan Baker, a Cranfield School of Management researcher, in a recent article in Media Week, Alan Mitchell highlighted Baker's view that 'new fault lines are emerging with sudden clarity... we are moving from a production-driven to a consumption-led economy, where the nature of exchange is different, and this difference is exacerbated by the force of the internet and e-commerce'. The Internet aggregates the actual brand experience, it discloses and amplifys the mismatch between companies and their customers, which can be seriously disrupted. This could also be termed a period of Creative Destruction, a term used in a McKinsey book on that topic. The underlying theory is that corporations are built on the assumption of continuity; their focus is on operations. Capital markets however are built on the assumption of discontinuity; their focus is on creation and destruction. The assumption of continuity is dangerous, leading to hubris, and a loss of focus on the market. Joseph Alois Schumpeter, the Austrian-American economist called the process of creation and removal the gales of creative destruction. The music industry is a good example, where people are demonstrating that they really want greater freedom in how they access and buy their music for a fair price. Their actions, via P2P copying and piracy, are playing an important role - though not the only ones in producing the gales of creative destruction in that industry. Our recent history has been deeply affected by the increased speed of technological development plus the convergence and proliferation of the audio-visual, mobile, IT and personal computing industries, increased internet and bandwidth penetration, and media choice. These developments have impacted businesses and the marketing community. As a result of these developments, business itself is faced with a tougher job when innovation and flexibility are the markers for competition, rather than efficiency being the fundamental driver of value. Convergence of these technologies means that businesses are beginning to cannibalise other industries. Take, for instance, mobile phones with cameras. During 2002 there were 18 million camera-embedded mobile phones sold worldwide, a drastic increase from less than 2 million in 2001. The need for growth, coupled with convergence, both forces and enables business to think beyond its own market sector in search of increased revenues and profitability. This scenario is played out against a culture in flux, with different needs and aspirations to those of a generation ago. As a consequence of these factors the business, advertising, and marketing communities are looking at what the next generation of marketing companies will be.
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