Continual disruption – still happening in TV and content

One of my favorite things to read about is innovation. For those of you that know me, that’s not really a surprise. However, I think that there’s a lot of misunderstanding out there about what “disruptive” innovation is. Most people think that apps that modify the way you do something is disruptive. For example, people have said that companies like Kayak and Hipmunk are both disruptors of booking travel. However, the true disruption came from travelocity or orbitz, whichever came first. These sites really did change the way the game was played for booking travel because they essentially cut out both the middleman (travel agents) and the airlines involvement in book flights. Anything beyond that has simply been sustaining innovations. These are innovations that are quickly co-opted by the existing incumbents as it’s possible for them to do that. A more disruptive technology for travel would view the process holistically from the moment you booked the trip to the time to returned home from your completed vacation. The site would need to account for getting you to your destination without any sort of delays. In James Womack’s book Lean Thinking, they point out the “value add” activity of a flight was only 3 hours, while the total waiting time was over 12 and they didn’t include the effort it took to book the trip back in 1995. All inclusive it’s likely to be much worse now. Especially the way that airlines measure “on time departure” (leaving the gate on time) which is different than our “on time departure” (taking off on time).

In a true disruptive situation you’ll typically see the incumbents resorting to changing laws to keep their supremacy of the markets, we don’t see this in travel at all. Where we do see this is in telecom and cable. The image below from Mashable pretty well explains why this is happening.

There’s likely overlap between users of Netflix, Prime, and Hulu, but if I was cable TV I’d be running scared. I also would love to see this graphic if you add Twitch.tv and specifically ESPN. I think eventually twitch will be disrupting ESPN and the traditional sports networks out there.

How are the cable companies using legal and technical mechanism to limit access to content on Netflix, Amazon, Hulu, and Twitch? First, the movie industries have absurd agreements with cable companies (providers) giving their services, like Xfinity from Comcast first access to content. In many cases this will translate into something earlier on the subsidiaries of those in terms of networks. Second, cable providers use their control over the network to throttle the internet speeds of these internet services. This is leading them to try to change the laws around net neutrality so that the cable providers don’t just become “dumb pipes” that content is passed through but the users don’t interact with.

I believe this also indicates that both cable networks and internet providers are being disrupted in a way that they don’t understand. They are using every tool they have at their disposal to fight against the adoption of these services, but they don’t understand what’s happening. Consumers have hired comcast, verizon, and others to provide them a solid consistent connection to whatever content the user wants. Internet providers are trying to force themselves into a middleman role that the users don’t want. When opportunities arise that will allow the user to experience content on their own terms. It’s clear that cable TV is losing the fight and this will only accelerate as people purchase more tablets and devices like that. Chromecast (which allows people to display things from a laptop/tablet on their TV) is another disruption that Google is providing, Amazon has something similar for their Tablets (which will increase Prime usage by the way). The TV companies are losing and need to figure out new business models to stay afloat. This is where disruption is happening. Not in other spaces.

Go Daddy and SOPA

Today Mashable wrote an article arguing that it’s time to give Go Daddy a break. Since it was recognized that Go Daddy was a supporter of SOPA Reddit and the rest of the internets have been lambasting Go Daddy for it’s stance. Go Daddy has responded to the internet three different times, each with a strong change in its tone. First, it responded with a very caviler attitude as if there was nothing that the web could do against them for their SOPA support. Once there was announced an official domain move day of December 29th and thousands of domains fled Go Daddy, the company changed their stance from Supporter to “no longer supports” SOPA. Once the 29th hit even more sites moved from Go Daddy which has forced Go Daddy to officially oppose SOPA. However, even this hasn’t placated the internet and members of sites like Reddit are calling for more domain name changes. Mashable things enough is enough. The point has been made the company has changed its stance.

The author, Todd Wasserman, doesn’t seem to understand why members of sites like Reddit would be so upset and still out for blood. Sites like imgur are moving from Go Daddy, even though the official stance has changed and the boycott domain change day has passed. Should they still change? I think they should. What Wasserman doesn’t understand is this is as much an emotional response as a logical one.

The initial response basically marginalized the most active users of the internet, which include many domain name holders and entrepreneurs. Effectively saying to their clients, you don’t matter to us you pay us and we’ll do what we want to the internet. These are technologically savvy consumers that really understand how the internet works and have an expectation of how they should be treated on the internet. This was akin to kicking a hornets nest.

The slow response to the internet’s concerns allowed users to find additional information about Go Daddy’s involvement in SOPA. It was discovered that Go Daddy actually helped write the bill and was exempt from it. This represented a betrayal of the highest order. A company that has gotten rich on the back of user created content from start-up companies, blogs, video sites, etc, was helping to destroy the very content that made it rich. Talk about a Judas move.

When the company then switched to doesn’t support SOPA, this just further angered communities like Reddit, because it didn’t go far enough. Internet users wanted the company to condemn the bill with all the force it could muster. However, it took a half measure approach and did nothing to actually make users on happy. Content owners want to be sure that their domain registrar was as against the bill as they were. Otherwise, all of their protests and content could easily be cut off while Go Daddy continued to profit off of the users content.

So, should the full reversal after the boycott have helped placate the internet? I don’t think so. The company was disingenuous in their initial responses rebuffing serious concerns from the most savvy of their users. These users were able to explain to the less savvy the actual hazards of a domain registrar supporting SOPA. The half measure changes showed that the company was only bowing to pressure and likely could have changed positions as quickly as it had once the boycott was announced.

Making an example out of Go Daddy makes it known to other large companies that bills like SOPA are completely unacceptable and support of them will not be tolerated if you’re a web based service or company. Should the internet relax on Go Daddy? No, not until they begin making campaign contributions against the bill’s supporters, actively works to lobby against it through transparently working to write bills to fully protect the internet from future legislation like this. Changing its stance seems some what opportunistic and I know I need more action than a statement. Working to oust members that support it, would be putting its money where its mouth is.