Innovation case study for television distribution business
The television distribution industry is In transition, as alternative distribution technologies and new business models emerge. Use the technology cycle to assess the state of technological change for television dilutions. What part of the cycle Is the Industry In now and what is the future for distributing television? What Is your prediction about the potential impact of ‘cord cutting?
Based on technology cycle theory and current state of distribution technology in the market, I conclude that the industry is in “Era of Ferment”. The “Era of Ferment” is fined as “The new technology might offer breakthrough capabilities, but there is little agreement about that the major subsystems of the technology should be or how they should be configured together” (Schilling, 2010).
In current distribution business, cable company (Rogers, Gecko and Shaw) was the dominate players In distributing television for so many years.
In recent years, telephone companies such as Bell and Tells spent billions of dollars to upgrade their existing network to use Fiber outlasting television services to compete with Cable companies In bundling heir other services. However, the business model of phone companies Is not much different from the model of cable companies. With the entering of the Nettling and Apple TV etc into Canadian market, the business models are evolving from distribution of TV channels through cable/fleer to distribution of individual content through Internet.
TV views are not restricted by what TV channels are showing but they are picking what they want to watch and when they want to watch it.
This new distribution does offer breakthrough capabilities but at the same time there are ajar shortcomings on delivering live TV and high definition TV programs to millions of viewers, which are most TV subscribers are accustomed to get nowadays. That’s why we are In an era that new technology Is emerging but there is no dominant design selected yet.
For ‘cord cutting’ practices In Canada, even though the new distribution way Is getting more popular with 29% of English-speaking Canadians subscriber to Nettling, (Michael Oliver,2014) It Is hard to consider it as the major threat to cable/lepta distributors for now because of the lack of live sports program ND high definition programs. As most of the subscribers of the Nettling are using it as the supplement service as complimentary to current TV services. The cable and PIPIT companies are also adjusting their strategies to bundle their services together with lowered prices for TV and gaining more HAD or live sports content.
It is reflected in the NIL deal Rogers signed in recent months. (Dan Rosen, 2013) Rogers is also aggressive in providing discount for bundling services as well. As even ‘cord cutters’ will need Internet and cellophane services, cable companies are using these two revise as the mall attractions to prevent customers from canceling all services together and adding the home phone and TV services as the part of the bundles. There are more changes needed from cable companies and PIPIT service providers to fight the threat of the distribution content through Internet.
Another big factor is demographic reasons.
I en older generation Is uses to use I v as ten mall source AT entertainment. They are using more and more internet to get information and entertainment. But TV services have been a big part of their adult life so it is hard to get rid of the service. For younger generation who is not attached to TV but more on Youth and Nettling services, it is very common for them to not subscriber to TV at all. So ‘code cutting’ process could be a generation process as more and younger generations are abandoning the TV altogether.
There are many options available for viewing television content online. Do you expect that there will be a dominant design for watching TV online? What factors will influence the emergence of a dominant design? What advice about timing would you give a company considering entering this market? Yes, dominant design for watching TV online will come soon. I think Nettling model with several modifications would be the future of the dominant design. Here are a few favorable factors playing towards Nettling business model.
Nettling is a kind of “competence-enhancing” innovation.
It builds on existing know like: 1) Combine existed technologies like Internet, marketing and IT technology together to develop a new video-rent model and changed customer habit successfully. Nineteen’s technology is not ground-breaking however it did very well in integrating their technology to make the service more natural to current TV viewers. ) It has good relationship with various content providers as a lot content providers are satisfied to use Nettling to deliver their contents. It is very critical to have enough contents to satisfy customers.
Also Nettling is starting to build its own exclusive content as well.
3) And it also makes both upstream-traditional media providers and downstream-customers get more values when it entered market. “It took longer for an industry to converge on a dominant design following a competence-destroying discontinuity than it took to converge on a dominant design following a competence-enhancing discontinuity. (Anderson, P. , & Dustman, M. L.
, 1991). All these know are the main reasons that Nettling business model is very successful in a very short time.
But if it’s possible to become dominant design? Let’s look at what is dominant design first. “This design is a single basic architecture that becomes the accepted market standard. “(Anderson, P. , & Dustman, M.
L. , 1991). What I think future dominant design product in TV distribution would be a cross multi-platform no matter what devices customers are using with competitive pricing. Also because of various content owners, it is hard to convince them to stubbier their contents on more dramatic business models like Youth etc.
What factors will influence the emergence of a dominant design? “They present a combination of features, often pioneered elsewhere, that sets a benchmark to which all subsequent designs are compared” (Schilling, 2010). As the above statement indicates, more often than not a dominant design is not a very good innovator but a very good company who can integrate some existing innovations well.
Nettling business model is never a ground-breaking one and its technology is nothing new but it did really well to integrate everything together to provide good user experience. Nat value auto telling would you give a company considering entering tans market? Now I think it’s time to enter this market. According to factors influencing optimal timing of entry, the answer depends on several factors, (Schilling, 2010). Including: 1) customer certainty: Since TV has been a mature product for so many years, TV customers deeply understand their own needs to have an affordable and easy-to-use solution. 2) How much improvement does the innovation provide over previous solutions? The improvement of delivering content on Internet vs..
Veer the able have some obvious advantages such as the user has the control over when and where they view the content and not limited to what is showing at current time. The content can be personalized and not restricted to general public likes etc. 3) Technologies are sufficiently mature? Any innovation requires technologies required? In current business models of delivering contents over Internet, the technology is very mature and there is no patent or exclusive technology to prevent companies from entering the market. A large company with deep pocket can easily enter the racket quickly as long as it has good content sources.
For example, Amazon. Com added video services to its Prime users in recent years. 4) There are certain barriers of delivering all content over Internet like live streaming sports or ultra-high definition programs. However, there are existing business models of delivering DVD’s to households to compliment the lack of HAD content or limited bandwidth to view the high definition content. 3. What method or methods would you recommend to the cable and telephone companies who currently sell subscription TV to help them better understand what their customers want? Explain why you are making this recommendation.
Cable and telephone companies are facing huge challenges from internet content delivery companies like Nettling. However, they are still the current dominant players as TV is still the biggest distribution for the content. With several improvements of its business model, it still can have a good fight into defining the future of content delivery methods. 1) “Voice-of-customer method #8. Community of enthusiasts” (Cooper, R. , & Gadget, S.
,2008) One of the core business assets of Nettling is to make suggestions and recommendation on what customers want to watch based n their previous watching histories.
Customers can also provide their feedbacks and suggestions on what they want to watch to better customize their selections. Cable and telecoms can use their current media assets and know to establish a good TV viewing community with good insights from experts. 2) “open innovation-partners and vendors”(Cooper, R. , & Gadget, S. ,2008).
Cable and telecoms can involve more TV producers into the business decision making and how to distribute their contents more effectively. This may include distributing some extra content outside of their jugular TV programs on the internet. ) “Open Innovation-Invite external finished product designs” (Cooper, R. , & Gadget, S. ,2008). More activities on acquisition of internet delivering companies.
With current large enough funds and incomes, cables and telecoms can spend some money on new ways of delivering contents without hurting their bottom line. 4) Low the cost of regular TV but increase the cost of live sports shows. Regular TV programs with advertising are a thing of past now in the era AT Nettle Ana PAR. However, I v Is stall a good en retirement source IT ten cost Is low enough.