This morning, in the Grand Ballroom of the Westin Bayshore Hotel in Vancouver, a group of panelists discussed the dramatic industry shifts at the 2011 CVCA Conference—Zynga, Groupon, PayPal exploding onto the scene and became billion-dollar companies, and traditional media companies that have plummeted to their deaths.
The session, titled “Industrial Disruption at Warp Speed: Zero to Billions and Billions to Zero,” went in-depth to tackle the rise of fall of these companies and their industries. Moderated by Chris Albinson, Managing Director, Panorama Capital, the event was presented by Deanna Brown, CEO, Federated Media Publishing Inc.; Paul Bernard, Head of Business Development, Nokia; Albert Dobron, Managing Director, Providence Equity Partners LLC; and Matt Klainer, Business Development Manager, Google.
The conversation has shifted—what industries will next see advancing technologies and the social revolution sweep them off their feet? Banking, law firms, ad agencies, retail, carriers… or something completely unexpected? When turmoil bubbles, these experts know that there are threats, but also opportunities—and from destruction comes new creation. Still, questions remain: who will be hit, and when?
Chris Albinson opened up the presentation by ripping through some slides showing off mind-blowing stats—the billions of smart mobile devices floating around the world, the trillions of dollars flowing through internet-based economies, and staggering trend lnes leading to a new world. Amazon rendered Borders bankrupt, Netflix rendered Blockbuster bankrupt, Twitter, LinkedIn, and Facebook are pushing many traditional media companies to the brink of destruction.
The panel is almost unanimously worried not about news, media, or journalism, but about print and ink publications. Google’s Matt says that existing papers should not go bankrupt—they have established reputations to build new foundations on. They need to pivot, alter their business model, become local content curators and aggregators—paper may be dead or dying, but that’s no reason for these companies to die with it. That just doesn’t make sense.
What about other industries? Are companies like Hulu killing traditional cable companies? Hulu is a success but the panel says cable companies learned from the music industry and media companies—don’t let others pirate and distribute your content outside of your control. Even though Hulu is growing, TV viewing is still up. The market is growing; media consumption is up. And things like Google TV benefit traditional companies by making television viewing smarter and more integrated with the web. It’s up to these traditional companies to ride the wave though or they will drown.
Video consumption is poised to grow but it’s poised to grow on mobile devices like tablets and smartphones and laptops, not television sets. So there is a tremendous opportunity that can be seized by either old cable companies or startups. It’s about who can execute on key ingredients like personalization.
Is Beyond the Rack putting Winners out of business? Is Well.ca putting Shoppers Drug Mart out of business? When people shop now, they use their mobile device to compare prices—maybe they’ll try your store’s clothes on or look at your store’s TV, but if they like it, they’ll order it wherever is cheaper. And they can make this decision by checking multiple stores in a matter of seconds. Facebook is also a crucial cog in the machine as a recommendation to a product or service will trump any amount of advertising and marketing by the company, and Facebook allows such social interactions to occur naturally and easily.
Next on the chopping block? Yellow Pages, sliced open by the likes of Groupon and kin. One panellist notes that his kids will never, ever touch a yellow pages or white pages book, rendering their future prospects nil.
Shouting versus conversating: during a TV show when ads hit, the content experience is disruptive, The advertiser is shouting at the consumer. This doesn’t go over well anymore. Companies now need to engage in conversation with consumers instead. Utilize social media. Open up, listen, be a friend. New gen consumers no longer possess a tolerance for shout ads.
Finally, what damage can Google’s new NFC-capable phones (mobile payments) do to the banking industry? Google’s panelist insists the company has no interest in battling banks, but it’s hard to argue that it doesn’t add massively valuable data to Google’s mine and pull consumers away from engaging directly with financial institutions. Nokia’s panelist concludes that smartphone payments are not disruptive to the banking industry. (Note: Google’s NFC will be on trial in San Fran and New York, rolling out elsewhere in the U.S. throughout the year with no set date on a Canadian launch.)