If you are not aware of this, you must have been hibernating in a cave through the last decade. We are in a period of unprecedented media innovation and transformation thereof that is changing the lives of billions (with a ‘b’) of people world-wide. A decade ago, we would have not said this – but today – if you don’t adopt a strategic premise of “disrupt or get disrupted,” it would become too late for many in the content industry. Yes, content is still ‘king’ in this new world order. It is an exciting time for the consumer, they are gaining more control of the content being created, aggregated, distributed and seen. Innovative companies have to develop new platforms and devices to inform, connect, and entertain users in ways that were only dreamed of a decade ago.
As the entire ecosystem transforms, it is definitely a time for concern and delight for the businesses standing on the content landscape, which is shifting beneath their feet. An innovation in one part of the ecosystem might reduce costs or improve the customer experience, but it has the potential to disrupt the content creator’s business model, reduce the content aggregator’s market share or even diminish the content distributor’s value proposition. So, any new business model that gets embraced will have ripple effects across the industry as well.
Let us take for example how the democratization of the content creation can impact the traditional business models. Here are the aspects of content creation we have to take into consideration.
We have relatively inexpensive mobile hardware, software, collaboration and infrastructure technologies that are driving democratization of the content creation process. As a result of this, more number of content creators are taking on to creating fairly good quality content for consumption. This is leading to a significant jump in content production from many more producers. In response, the content creators are incorporating user-generated content into their business models, introducing branded content on low-cost platforms, and differentiating themselves by creating high-quality, exclusive content.
How would content creators come up with innovative business models you ask? Take for example the Amazon Studio. Yes, you heard it right; Amazon has successfully got into the content creation space as well. Here is what they have managed to do. They have created a multi-sided platform business model.
Multi-sided platforms are innovative business models that bring together two or more distinct but interdependent groups of customers. Such platforms are of value to one group of customers only if the other groups of customers are also present. The platform creates value by facilitating interactions between the different groups. The multi-sided platform grows in value to the extent that it attracts more users, a phenomenon known as network effect.
With the Amazon Studio's multi-sided platform business model, the consumers sign-up to write speculative (spec) scripts that goes through curation by an increasingly large number of similar script-writers who have jumped on to the platform with various compensation models. Once a script reaches a certain level of acceptance, at the back end, Amazon has developed partnerships with the big-studios to take on the production of these scripts into feature films. The script-writers get compensated even more at this stage and Amazon also gains from the partnership for the curated scripts for the studios. In turn, Amazon owns significant rights to the high-quality motion-picture jointly produced with the studios. Then Amazon uses its own on-line retail and streaming infrastructure to sell these motion-pictures to consumers.
Now that is only one such successful outcome from business model innovation for content creators. Business model innovation exercises with incumbent content creators can result in many more such innovative business models in this new ecosystem that is unfolding before our eyes. So, here is the call to action - take the lead and “disrupt or get disrupted.” That has after-all become the name of the game in almost every industry now. Adopt a bias for action and become more insurgent in an industry that is in turmoil. If you wait, you become irrelevant. And that would be a hard pill to swallow.