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Titlee-shock 2020: How the Digital Technology Revolution Is Changing Business and All Our Lives
Tags
LanguageEnglish
File Size5.0 MB
Total Pages176
Table of Contents
                            Cover
Title
Copyright
Dedication
Contents
1 The Technology Revolution
2 Our Lives Are About to Change Forever
3 How are Consumers and Businesses Responding?
4 The World in 2020
5 Digital/Multi-channel Checklist
6 How Ready is your Organization to Become an Effective MCE?
7 Mobile Comms, Content and Commerce
8 “It All Pivots Around Social Media”
9 Social TV
10 Impact of Digital on Media, Travel, Health and Advertising
11 Impact on Retail and Property Sectors
12 Organizational and Structural Solutions
13 Changes to the Workplace and in the Workforce
14 The Digital Divide
15 Case Study: Building a Successful Online Business
16 UK Case Study: The Benefits of Going Digital
17 Case Study: How the Cloud Facilitates the Technology Solution
Index
Acknowledgments
                        
Document Text Contents
Page 88

78 e-shock 2020

hardware development. B2B businesses outside that direct arena, such as
investment banking/wholesale financial services, manufacturing and agricul-
ture, are often one step removed from this onslaught of digital technology
and may (no guarantee!), just may, have a bit more time to prepare their
change program.

Travel

Let’s first consider a sector where the transformation is already well under
way. Travel was one of the first industries to experience online disinterme-
diation. Airlines and hotel operators used to sell through travel bureaus and
agents, and source most of their business that way. Reaching out direct was
just not possible for cost and access reasons other than by, for example, direct
mail drops which usually just led to an agent’s call centre. But as we all know,
digital technology has changed all that and now the traditional agents have
either shut up shop, merged and consolidated or gone online themselves to
capture the new order.

If we examine what’s gone on we can see six different strategies that have
been adopted:

(i) Hybrids: companies as agents who now combine a mix of traditional
retail as well as online travel booking such as STA Travel, Apollo and
Co-op Travel in the UK.

(ii) Forward integrators: companies which have moved into other parts
of the value chain, for example, Thomas Cook and Thompson which
now have their own chartered airline services as well as providing
holidays.

(iii) Pure plays: those which now focus exclusively on online direct, such as
Cheapflights.com, Expedia.co.uk, LastMinute.com.

(iv) Added value information providers such as TripAdvisor.com.
(v) Segmented content/distribution plays such as IgluSki.com.
(vi) New low cost/adapted business model entrants such as Trailfinders.com.

As we look into other sectors and explore the transformational changes
that are just beginning to impact and are still far from complete, we can con-
sider which of these possible strategies might be available and appropriate for
incumbents and also for potential new entrants evaluating their options. That
is not to say that the six strategic options identified here are the only ones
that could be available. But they are a good place to start. They do all require
a fundamental shift in ways of working, a wide-spread recognition and ac-
ceptance that the traditional model is on its last legs and a determination to
go through often difficult change in order to safeguard the long-term health
of the company. And of course, the current management may not be given
much choice if rivals force the pace, if consumers demand change by buying
elsewhere or if investors start selling!

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10 u Impact of Digital on Media, Travel, Health and Advertising 79

Media

In the media sector, looking at Hulu provides a good overview of many of
the challenges media owners and content providers face.

Hulu provides TV content and programs for free, online. Its revenues
come from pre-roll and side advertising. Its aim is to be the YouTube equiva-
lent for TV programs. It launched in 2008 and quickly became successful,
pushing revenues up to $150m and securing content partnerships from the
likes of Disney, NBC Universal and News Corp. But in a world where con-
tent online has now quickly become available for free from many alternative
places and on other different access devices, and without ad interruption or
delay, Hulu’s owners are already concerned about the long-term viability of
their own specialist ad-funded business model. What started out as unique is
rapidly becoming common place.

Some of the content provider partners such as Disney want to start charg-
ing for their content either by way of subscription or on a pay-as-you-go
basis. Others don’t want to be tied in only to Hulu and want to make content
available in other ways, for example, for the Apple iPad.

As a result, something that had quickly proven to be a success may well
tomorrow become a falling star just as quickly, as the online content access
environment changes rapidly. Catch-up TV, connected TV devices, the Apple
iPad and the emergence of other free online content platforms are under-
mining Hulu’s early market leadership. The Hulu CEO has commented that
Hulu is a trail-blazer and that it is prepared to blaze another trail, even if it
takes a bit of time.

Hulu has started to respond with Hulu Plus, which is an online paying
subscription service giving access on internet-connected TVs and portable
devices like the iPad. But this is a major departure from its “free content”
theme and starts to compete directly with a new and established set of other
subscription-based services. Netflix, for example, had revenues of over $2bn
in 2010, is generating high levels of profitability and has become the de-
fault provider of video content whether from TV or film. It does charge a
subscription so it has established a way of pricing for the industry. But why
would a consumer switch to Hulu when Netflix provides a bigger archive
of material, is widely advertised and has locked up partnerships with the big
guns like Google TV?

Hulu is facing transformational change from all sides, even though the
company itself was regarded as a pioneer of the digital revolution at the time
of its launch just a short while ago. Catch-up TV players are now easily and
widely available for free, online, interactive, net-based TV has been launched
and will be ramped up, the iPad and other tablets allow for easy remote
download and access of TV and movie content, Google, Apple, Sony and
other big guns are muscling into this arena … not a good time for Hulu to
start another round of fund-raising!

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Plate 8 Dover Street Market

Plate 9 10 Corso Como


Plate 10

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Plate 11

Plate 12 MyFaveShop

10.1057/9780230343368 - e-shock 2020, Michael De Kare-Silver

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