Paul Wallbank – Brilliant Communications

Tag: disruption

  • The myths of dead brands – busting disruption stories

    The myths of dead brands – busting disruption stories

    “These three brands have one thing in common – they’ve all been destroyed by digital disruption,” says one business commentator in a recent presentation.

    He cited three names; Kodak, Nokia and Blockbuster.

    It’s a nice, and often repeated meme, which is only really true of Blockbuster which failed to adapt to a changing market and could be a perfect example of a transition effect although some don’t buy the digital disruption reason for the company’s demise.

    Giving lie to the idea the company was a victim of Netflix’s rise, a former Blockbuster executive puts the chain’s bankruptcy down to management not understanding the company’s role in the market, and that it was in decline long before the streaming service’s arrival.

    A more fundamental problem with the statement is both Nokia and Kodak are still in business too, the latter having come out Chapter 11 financial in late 2013.

    Finland’s Nokia is somewhat more complex than Kodak or Blockbuster, having been founded as a paper pulp mill in 1865.

    The company became a global brand thanks to being a leader in mobile phones prior to the iPhone disrupting the market but the name faded as the Apple and a new breed of East Asian manufacturers came to dominate the market.

    Despite fading as a consumer brand, the company is still a major player in telecommunications – being a major supplier of cellular base stations – along with a range of other technologies.

    Both Kodak and Nokia are still very much alive, albeit no longer being recognised by the average consumer.

    There are major lessons from both companies for those studying the effects of technological disruption on brands and businesses. Even Blockbuster’s mistakes in the face of a changing and declining market has many lessons.

    Citing them as examples of ‘digital extinction’ though is untrue and almost certainly unhelpful in understanding what management can do to respond to new technology or societal shifts.

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  • Television’s argument for relevance

    Television’s argument for relevance

    One of the notable things about the media’s collapsing business model is how television has suffered nowhere near the same downturn in advertising revenues as the other channels.

    This has been baffling for many of us pundits so a series of interviews I’m doing with media executives on digital disruption was a good opportunity to discuss why television is holding the line where print has dismally failed.

    While the executive has to remain anonymous at the moment, the series is for a private client, their view on why television has so far avoided the advertising abyss is simple – accountability.

    We have something, as do my friends at other media companies, that YouTube and Facebook don’t have which is we create quality content. What will differentiate us is we have premium, locally produced content that is one hundred percent brand safe and one hundred percent viewable and, most importantly, is independently measured by third parties.

    My view is that advertisers in that environment is a much more powerful experience than advertising in Facebook or YouTube

    While many of us may laugh at Australian commercial TV being described as ‘quality’, it does appeal to audiences far bigger than the typical YouTube channel or Facebook Live stream.

    The advertising industry’s established systems also, unsurprisingly, work for the television industry in giving the sector accountability that the online services lack in a world where ‘click fraud’ – software tricks to report false web impressions – is rampant.

    Even more importantly for the new media giants is the ‘brand safe’ message being pushed by the incumbents. The advertising crisis for Google is real and the established players intend to exploit it.

    While the TV executive is pushing their own product, it’s clear the fight for advertising and marketing dollars is far from over.

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  • How the cloud beat the telcos

    How the cloud beat the telcos

    Yesterday this site looked at the telcos’ battle to diversify in a world of declining sales and margins.

    One of the areas where telecommunications providers failed dismally was in data centres – what should have been a relatively easy area for them to move into turned out to be an industry that was culturally alien to them.

    This week showed how costly that failure was for the telcos as AWS, Microsoft and Google all reported huge growth in their cloud revenues. Microsoft’s cloud business nearly doubled in value while AWS grew almost 50%.

    While for Google, the company is still grossly dependent upon advertising for its profits, at least their cloud services are the fastest growing part of their business. Their struggle to diversify is beginning to show some results.

    The telcos though can only look and wonder at what might have been.

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  • Telcos and the battle to diversify

    Telcos and the battle to diversify

    How Australia’s incumbent telco, Telstra, deals with the industry’s commoditisation is the topic of my interview in Diginomica with the company’s Hong Kong based director of Global Platforms, Jim Fagan.

    The need to diversify is pressing upon Telstra with the company’s income down 3.6% in its last financial report with mobile sales, by far their biggest revenue earner, down eight percent.

    Across the developed world, telcos are seeing their markets slowing with global smartphones sales largely static, formerly big profit generators like SMS declining and broadband data rates collapsing.

    In the US both formerly untouchable telcos are struggling which has seen them attempting to diversify with AT&T buying Time-Warner for $85 billion and Verizon buying Yahoo! despite its problems that saw a $250 million discount after the service’s hacking scandal.

    With the pressures on the telco industry, it’s not surprising they are looking at alternative income streams and Telstra’s strategy seems to play more to their traditional strengths than a media play, which Telstra has tried previously and failed.

    It could be though that Telstra, like all telcos, could be destined to become a utility service. While that might disappoint executives and shareholders who dream of glamour, excitement and high profits, that might not be a bad thing.

     

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  • When AirBnB comes for real estate agents

    When AirBnB comes for real estate agents

    One of the web’s promises was to eliminate the middleman – the retailer, the broker and the agent. During the heady days of the original dot com boom in the late 1990s many of us, including this writer, thought relationships between producers and consumers would become stronger without intermediaries.

    As it turned out, things things didn’t quite work out that way with new middlemen like Uber and Amazon rising while some sectors, like real estate, just saw the industry evolve around new tools, distribution channels and advertising models.

    Now it appears AirBnB is coming for the real estate industry with a plan to move into rental management, something that publicly bemuses the incumbents but no doubt privately worries them.

    Like Uber, AirBnB is having to look at alternative revenue streams to justify its sky-high stock valuation. Particularly so given the company is looking at an IPO in the next few years.

    Rental management is a pretty low margin, high maintenance business so it’s an odd choice for AirBnB and it’s not hard to think the real target is the real estate sales business which far more profitable and in many cases quite doable with algorithms.

    No doubt real estate agents will retort with how they add value and how computers couldn’t do their sales job but in truth it’s like many other industries where automation can deliver cheaper and quicker results.

    If AirBnB does successfully enter the real estate market the first victim won’t be the agents but the newspaper industry.

    With local newspapers still dependent upon real estate display advertisements, particularly in Australia where the print media’s only real revenues come from property advertising, losing out to an app would be the industry’s killer blow.

    As with many other things in the digital economy, it may be we underestimated how long it would take some industries to fall. We could be about to see two sectors fall to disruption now.

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