charlie fine, mit - mit - communications futures program
TRANSCRIPT
Professor Charles FineEmmanuel Blain
Value Chain Dynamics Working GroupCommunications Futures Program
Massachusetts Institute of Technology
May 2009Telecom Italia Future Centre, Venice
[email protected] [email protected]
Communications Industry Report Card:
A Value Chain Dynamics Perspective
A Simple Value Chain:
Consumers/Users
Sales/Marketing/Distribution
ProductConcept
SubsystemSuppliers
CoreTechnologySuppliers
Production
Innovation along the Value Chain:How (& why) do Autos & Electronics Differ?
Consumers/Users
Sales/Marketing/Distribution
ProductConcept
SubsystemSuppliers
CoreTechnologySuppliers
Add-onsInternetMinivan,SUV,
Crossover
Hybrid Engine,Active
Suspension
Aluminum Bonding,
Carbon Fiber,CAD tools
Production
Lean ProductionAUTOS
Napster,Apple I
Amazon,Dell
iPod, X-Box,Palm,Office,
Digital Photog.Mobile Phone
Java,Html,C++
Microprocessor,Hard disk drive,Photolithography
ContractManufacturingELEC-
TRONICS
Innovation Dynamics can be RADICAL (disruptive) or INCREMENTAL (sustaining);
Technological perspective vs Industry perspective
Per
form
ance
Time
How to measure performance?How to know where you are on the “S”?Where in the value chain?Worse before better?
Disruptive Process Innovation in Autos vs. Disruptive Product Innovation in Electronics
Per
form
ance
Time
Craft Production
Mass Production
Lean Production
In Electronics:
Vacuum tubes to IC’s
Mainframes to PC’s
Chemical to Digital Photography
Wire-line to Wireless Telephony
Automotive
Performance Pushan overwhelmingly superior technology/process(mass production, penicillin)
Customer Pullnew customers care about different measures of performance
(wireless phones, personal computers)
Organizational Competenciesincumbents cannot do what the innovators can
(Dell supply chain, Southwest Air)
What makes an innovation disruptive?
BusinessCycle
Dynamics
Regulatory PolicyDynamics
Corporate StrategyDynamics
IndustryStructureDynamics
CustomerPreferenceDynamics
Drivers of Value Chain Dynamics :“Gear Model” for Roadmapping the VC
CapitalMarketDynamics
Gears differ by size/speedEach has an engine & clutch
Technology& InnovationDynamics
ALL COMPETITIVE ADVANTAGE IS TEMPORARY
Autos: Ford in 1920, GM in 1955, Toyota in 1990
Computing: IBM in 1970, DEC in 1980, Wintel in 1990
World Dominion: Greece in 500 BC, Rome in 100AD, G.B. in 1800
Sports: Bruins in 1972, Celtics in 1986, Yankees not lately :-)
The faster the clockspeed, the shorter the reign
A Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
Creative Artists
MusicMarketing
MusicDistribution
MusicConsumption
MusicPublishers
MusicSales
iPod/ iPhone
iTunes
iTunes
iTunes homepage
Listening accessories
Open
ContentClosed to non-MP3, non-Apple formats
Networks
Closed to non-AT&T (& partner) networks
ApplicationsClosed then open to non-Apple apps, VOIP over WiFi, IM, etc.
THE CASE OF APPLE iPod/iPhone
MusicPlayer
Retailing
Creative Artists
MusicMarketing
MusicDistribution
MusicConsumption
MusicPublishers
MusicSales
iPod/ iPhone
iTunes
iTunes
iTunes homepage
Listening accessories
Open
ContentClosed to non-MP3, non-Apple formats
Networks
Closed to non-AT&T (& partner) networks
ApplicationsClosed then open to non-Apple apps, VOIP over WiFi, IM, etc.
THE CASE OF APPLE iPod/iPhone
MusicPlayer
Retailing
APP STORE!
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
3. TVoIP: Looks to follow music?
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
3. TVoIP: Looks to follow music?4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
3. TVoIP: Looks to follow music?4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?5. FoIP On-line banking: a sustaining innovation?
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
3. TVoIP: Looks to follow music?4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?5. FoIP On-line banking: a sustaining innovation?6. AoIP: Is “consumption” of the arts
different?Important distinctions among the
arts?Classical, Contemporary,
Performing, . . . ?
A Brief Review of the oIP’s1. VoIP: Voice communication is alive and
well. VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.Big opportunity for Apple.
3. TVoIP: Looks to follow music?4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?5. FoIP On-line banking: a sustaining innovation?6. AoIP: Is “consumption” of the arts
different?Important distinctions among the
arts?Classical, Contempary,
Performing, . . . ?7. SPoiP: Sports as a fast-clockspeed
performing art;Time shifting reduces value . . .
PotentialFans
CasualFans
(Video)
RabidFans(Live)
Sports over IP: A Dynamic Modeling Perspective
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
+ +
+
+
+
++
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
TeamRevenue
+
+
++
StadiumPrices andAttendance
++
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
TeamRevenue
+
+
++
StadiumPrices andAttendance
++
+ + ++
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
TeamRevenue
+
+
++
StadiumPrices andAttendance
++
+ + ++
-
-- -
(Local Sports
Blackouts)
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
TeamRevenue
+
+
++
StadiumPrices andAttendance
++
+ + ++
-
-- -
- - -
PotentialFans
CasualFans(Video
)
RabidFans(Live)
FanCreationRate
Rabid FanCreationRate
TeamPopularity
SuccessRatio
NumberOf Stars
DemandFor VideoContent
DemandFor Live
Performances
+ +
++++
+
+
++
+ + ++
OverThe Air
CableTV Licensed
Internet
Un-LicensedInternet
TeamRevenue
+
+
++
StadiumPrices andAttendance
++
+ + ++
-
-- -
- - -
InternetInnovation
InternetUsers
BroadbandDemand
+
++
+
+
+-
+
1. Research: Modeling value dynamics is feasible for
theperforming arts (more to come)
2. Observations:Internet viewing can potentially grow the overall market for the arts, but may also reduce revenue opportunities for art distributors.
All the oIP’s grow the pie for Broadband providers.
3. Questions:Can Broadband providers get their “fair
share” (e.g, versus Apple, Google)?
What is fair?Innovative business model design is big opportunity.
Conclusions/Observations/Questions