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  • 1. Innovation in media
      • Hugh Look
      • Senior Consultant
      • Rightscom Ltd
  • 2. Any story about innovation has to begin somewhere: digital media circa 1979
  • 3. Innovations
  • 4. Lots of interesting innovations, BUT….
    • We are often too concerned with innovations
      • As opportunities
      • As threats
      • As puzzles
    • And not enough with innovation itself
  • 5. Innovations…or innovation?
    • The digital media sector is full of highly creative people
      • But is creation the same as innovation?
    • How could digital media study innovation as a principle?
      • Can we see any underlying forces driving innovations?
      • How do we organise at enterprise level to deal with them effectively?
      • How do we organise at the sectoral level?
    • Some achieve innovation
      • … and others have innovation thrust upon them
    • Developing the capacity to deal with both
  • 6. Schumpeter’s 5 types of innovations
    • Introduction of a new product or significant change in an existing product
    • Process innovation (new to an industry)
    • Opening of a new market (mainly in the geographic sense)
    • Development of new sources of supply for raw materials or components
    • Changes in the way an industry or companies are organised
    • Schumpeter did not allow for marketing or business model innovation
  • 7. Innovation can be found at many levels
    • The creative individual or team
    • The enterprise
    • Sectoral innovation
    • Social innovation
    • Innovation often begins globally, but has most effect locally (within individual enterprises)
    • It’s deploying innovation that is hard
  • 8. Systemic problems in innovation
    • Infrastructure provision and investment problems
      • Including network infrastructure
    • Transition problems
      • Firms encounter technological problems or face changes that exceed their current capabilities
      • The transition from one paradigm to the next involves a high degree of uncertainty
    • Lock-in problems
      • Derived from socio-technological inertia, hampering the emergence and dissemination of more efficient technologies
      • May prevent the firms from foreseeing the emergence of new technological opportunities
    • Hard and soft institutional problems
      • Formal rules (regulations, laws)
      • Social & company culture
  • 9. Systemic problems in innovation (2)
    • Network problems
      • Links in the network too weak or too strong
      • Blindness to the world outside the network
    • Capability and learning problems
      • Insufficient human/organizational/technological competences of firms
      • Limits capacity to learn & adopt or produce new technologies
    • Unbalanced exploration-exploitation mechanisms
      • Can generate ideas but not able to choose well
      • Or can make choices but cannot generate ideas
    • Complementarity problems:
      • Competences of the system do not complement one another
      • Competences not well-connected
  • 10. Systemic problems in innovation (3)
    • In other words, almost all the systemic problems are about implementation or deployment, not innovation itself
  • 11. Media concerns
    • We interviewed a range of European publishers in spring 2006 for the European Commission
    • Little evidence of “disruptive technology” thinking
    • Much more evidence of “disruptive innovation” thinking – encompasses business model changes, new legacy-free competitors, changes in roles between publisher and audience
    • Companies very concerned with how their internal cultures could adapt successfully:
      • Skills were the key issue
      • Continuous deadlines versus print publishing cycle
      • Handling different media types (video, audio)
      • Conceptualisation and monetisation of value added services for online, mobile, IPTV
      • Managing content assets efficiently
    • Major barriers seen as social, legal or economic – not technical
  • 12. Models of innovation
    • Invention/creativity based
      • Often accidental
      • Easy to get confused between innovation and creativity in media enterprises
    • “ Systems of innovation” (Malherba)
      • Economic policy approach
      • Helps to understand innovations coming from outside the sector
    • Network models
      • “ Recombinant innovation” (Hargardon)
      • “ Horizontal innovation networks” (von Hippel)
    • “ 4-D” (Christensen et al)
      • More sophisticated version of the familiar radical/incremental model
    • Each has its value for analysis and implementation
  • 13. The 4-D classification
    • Displacement
      • Incremental sustaining innovation that can occur when new entrants change a part of the value network that is not interdependent with many other parts; does not replace incumbents
      • Example: desktop publishing software replaced phototypesetting, but did not change publishing itself
    • Distraction
      • Incremental sustaining innovation that can occur when incumbents change inter-related parts of the value network
      • Example: radio replay websites do not create opportunities for new entrants to capture audience
  • 14. The 4-D classification (2)
    • Discontinuity
      • Radical, but still sustaining, innovation that is controlled by the incumbents and affects most or all of the value network
      • Example: shift to digital TV, SMS
    • Disruption
      • Radical innovation that disrupts rather than sustains, as it allows new entrants to replace incumbents
      • Example: the rise in user-generated content in all its forms creates new audience interest and displaces significant areas of media content; new entrants command this activity and many traditional media enterprises lack the skills to enter
  • 15. Discontinuous vs disruptive innovations
    • What makes a technology or innovation “disruptive”?
      • It shifts the balance of power between users, suppliers and all the others in the value chain
      • Was SMS discontinuous or disruptive?
    • Who is disrupted?
      • Incumbents?
      • New entrants?
      • Users?
    • What disrupts an incumbent may sustain a new entrant
  • 16. Disruptive innovations: some examples
    • Email
    • SMS
      • Both gave users an alternative to speech
    • Japanese motorcycles
    • Digital downloaded music
      • The “track” economy is highly disruptive of the business model
      • Digital technologies may enable bundled pricing (journals) or dissolve it (music)
  • 17. Christensen’s theory of why incumbents lose out to disruptive innovators
    • They are too good at meeting the needs of their customers
    • They (and their customers) dismiss innovations that are worse in features and performance
      • Typically originated by outsiders
    • Their enterprise is designed for incremental innovation
    • The entrants find a new market with unmet needs at a much lower price point
    • Gives a base for relentless incremental improvement
      • Carried out very effectively within tight constraints
      • No legacy market to protect
    • The incumbents wake up to find the tanks on the lawn
  • 18. Possible cases
    • Blogs
    • Podcasts
    • Mobile video
    • Creative Commons
    • Google Adwords
    • … ?
  • 19. Examples of innovations that show an emerging pattern of value-chain disruption
    • Creative Commons
    • Open Source Software
    • Collaborative development
    • Social networking
      • Flickr
      • YouTube
    • Blogging
    • Decline in conventional advertising-driven business models
    • Folksonomies and tagging
  • 20. Traditional media value chains
  • 21. An alternative: a value cycle
  • 22. Innovation in production as well as consumption
    • New models of production
      • Neither individuals, not chain of command firms
    • Complex projects
    • Real-world applications
    • Emerging from a network environment
      • Artefact of circumstance?
      • Only possible once the network was there?
      • Inevitable consequence of the network?
  • 23. Innovation in production
    • Linux
      • Huge, complex project
      • Robust
      • Depends on culture/mindset as well as rules
    • Slashdot
      • Review/moderation authority & reputation management; “karma” (automated)
    • Xerox : Eureka
      • Mundane application, effective
      • Says something very interesting about when a product is “complete”
      • Inflicts some serious damage on concepts of authority
  • 24. Advantages
    • Costs less
    • Often faster
    • More robust
      • Problems are analysed and fixed very quickly
    • Transparent
      • You can “see how it’s done”
    • More ethical?
  • 25. Where do you find value in a networked world?
    • At the periphery - closest to the user, where specialist expertise is needed and relationships developed
      • Control of the user interface
      • Individualised experiences
      • Small, precise “datapoints”
    • At the core - where the shared infrastructure and expertise is
      • Generic
      • Benefit from scale
      • Content frameworks
    • Not in the middle
      • Process and pipeline operators
  • 26. How do we innovate?
    • What comes from outside?
    • What comes from inside?
    • What is driven by competition?
    • How much innovation is just “more of the same”?
    • How do we recognise what is going to succeed?
  • 27. Tools for understanding & managing innovations
    • Immersion
    • Scenario planning
    • Delphi method
    • Deviance-watching
    • “ Low probability/high risk” alerting
    • “ No threat” alerting
    • Organisational architecture and culture
  • 28. Our responsibilities?
    • To take care of the physical safety and mental well-being of our staff
    • To prepare for new cultures
    • To complete the work for mourning for the cultures that are passing
    • Where might we fail?
      • To betray our people by denying or obstructing change
  • 29. Thank you - and I wish you a successful rebirth
    • Hugh Look
    • Senior Consultant
    • Rightscom Ltd
    • [email_address]
    • www.rightscom.com