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3 - Innovation and disruption (Four types of technological innovation…
3 - Innovation and disruption
Technology central in media
new media comes with fear
old media rarely die --> they adjust
Convergence
technology driven --> fusion of content, computing and conduits
blurring of boundaries
E.g.: apple (computer but also iTunes)
Four types of technological innovation
architectual
simple tech improvements + big potential
discontinuous
entirely new, threatning
incremental
small improvements
market-based disruptive
simple tech change + change market drastically
Market-based innovation, threatens 2 elements
market structure
business model: eventual shift in strategy
Specific technological changes
new platforms
internet devices
storage/processing --> cheap content
new content forms
social media host/accelerate distribution
new content technology
wifi
(Traditional) value chain
Produce content
Aggregate content
Distribute content
Consumer
set of activities carried out to create value
media companies used to be
centralized
large
vertically integrated
owning multiple steps in chain
because of high first copy costs
why vertically integrate?
efficiency
difficult for new players to enter
cost, resources
high first copy cost
Key value chain disruptions
contraction
BuzzFeed <-- skip stage
fragmentation
mobile/print/app <-- split step into multiple discrete activities
disintermediation
focus on specific step in chain
Impact of all these changes
skip steps in chain <-- new purely digital players
fragmentation of audiences
fight for consumers
ppl: less loyal, busier, more choices
blockbuster strategy still popular though
new strategies, legacy players threatened <-- changed media market
Value chain effects
old media companies lose distribution control
compete in content production