The Disruption issue
Mobile disrupts. As Mary Meeker says, some companies will win big (with mobile) and some will wonder what just happened. What’s going to happen to your company?
The first industry to be disrupted by digital (remember Napster?) is going through a new change as cloud based music services are launched – with Amazon and Google already out there and Apple imminent. The Google service (well explained in this video) has been well received as has the Amazon service– liked by everyone but the music business who think storing music in the cloud is different to storing it in your PC and want more money.
Facebook are rumoured to be about to enter the market with a partnership with Spotify – who are signing deals with the record companies. Apple are signing deals with all the record companies – and the publishers – which is taking a long time.
But whilst most people write off the music companies as dinosaurs one person is very bullish about them. Sean Parker – the man behind Napster – tried to buy Warner Brother and thinks labels are now undervalued.
“I think that there is a pretty dramatic change in the way music is monetised that is on the cusp of happening. Back catalogues of record labels are going to become extremely valuable. If you believe this transformation is occurring, if you believe the broken distribution systems are on the verge of being fixed, those recordings are dramatically undervalued”
As we explored in our session on Mobile and Money for Google a few weeks back, everyone is positioning themselves for the imminent disruption in money. And now Google are due to announce their own play. They are partnering with Sprint, Mastercard and Citibank to launch a mobile wallet. With their flagship Nexus S device having NFC they are looking to seize an advantage over Apple who are rumoured to be including NFC in the next iPhone. And with Offers folded in they take the battle to GroupOn et al.
The other disruptive player is Square who have grown their business very quickly, and are now evolving beyond allowing people to take credit card payments with their iPhone. Their new service enables retailers to build a relationship with their consumers as well as letting them pay with one click on the app. Very interesting and we can’t wait for it to get to Europe.
The 2screen behaviour is now clearly recognised – with the consequent transfer of attention from TV to smartphone or tablet, which we have described before, confirmed by some new research from media agency UM.
Viewer distraction, most commonly in the form of smartphones—which are “a persistent companion to video content”— reduce attention to ads for both TV and online video
We’re now seeing people looking to monetise this behaviour and Bluefin are connecting tv shows and the ads within them to whats being said about them online. Started by MIT academics the data from Bluefin is being used by brands and agencies to understand how best to use TV – what spots to buy and what creative to show. A simpler version of this approach is being employed by agencies – using social buzz to determine which shows combine quality of viewing with quantity of viewers.
Once the Demand Side Platforms and Trading Desks – which are starting to drive digital buys – are unleashed on TV we’ll see the Agency model change radically.
As you would expect Google are pushing these changes and they see huge opportunity.
“Our belief is that by Google’s participation we can grow the overall display advertising pie,” Mr Mohan told the Financial Times. “The fundamental problem we are trying to solve is how do we get from [being] a $24bn industry to a $200bn industry in a few short years.”
The tensions of an industry in change are well observed in this article about Maurice Levy – who runs Agency group Publicis – interviewing Mark Zuckerberg of Facebook.
“If you think about advertising, what’s going to be more effective than any advertising you show is something your friend says they like,” says Zuckerberg.
Luxury & Retail disrupted
One sector that tended to resist digital for a long time was luxury. We’ve now found that mobile is seen as a positive by many of these brands as it offers the opportunity to connect digital activity to the stores that are so valuable in this sector.
No-one does it better than Burberry and this interview with their CEO is essential reading, with learnings for any brand.
“People talk about the age and positioning of a brand but, hell, it’s not about that. The global language is digital and we need to speak the language,” says Ahrendts.
Its easy to focus on big brands when we’re looking at disruption but we must remember that a major factor in disruption is the ability of talent to surface, without the help of the gatekeepers that characterise the recent past.
One of the most succesful youth media channels SBTV is ran by a 24 year old and uses YouTube to reach a big audience.
And a new generation of writers are self publishing on Facebook, a chapter at a time.
- Do you know who can see your DMs on Twitter? Good summary of which tweets are public and which are private
Our Tweets this week
We share interesting stuff on Twitter throughout the week and thought it worth adding a selection of them here, in case you missed any of the stories. To get the links – and to follow us on Twitter if you don’t already – click on the images or the column on the right of this page.