Disruptive business innovation using information systems – the entertainment Introduction

Disruptive business innovation using information systems – the entertainment Introduction

Uber, Ola, and related app-based taxi services have transformed the industry. These businesses have changed the way that people used to book cabs. In the process, the use of information systems has a crucial role. People do not book a cab or taxi anymore; they book an Uber or Ola. These businesses follow a specific disruptive business model – on-demand service adding the value to time. However, disruptive business models are not limited to the cab industry only. Another industry where disruptive innovation has marked its presence in the entertainment industry – distribution of media contents.

The disruptive paradigm in the entertainment industry

It is impossible for a new business to establish its mark in the market if the business model is not disruptive enough (Yu & Hang, 2010). The term ‘disruptive business model’ is used to describe the business structures that address the repressed market demands and disrupts the market (Christensen, Raynor & McDonald, 2015). The use of information systems in the current generation has made it significantly more comfortable. The impacts of disruptive innovation are expected to hit the entertainment industry hard as most of the media contents are now being distributed based on various disruptive business models. Netflix, Hulu, Spotify, iTunes, and other such services have made streaming contents much more accessible. Users are cutting off their cable connections to listen to music on-demand, binge-watch their favourite shows (Currah, 2007). The business strategies of these services are so designed that the users are hooked with the offers.

Models adapted by the service providers

Most of these businesses are based on some standard disruptive business models. The freemium model and the subscription model are the most common ones among the current industry leaders (Petrick & Martinelli, 2012). The typical examples of the businesses following the freemium model in the entertainment industry include Spotify, YouTube, Hot Star, and many more. Under this model, the users are offered a limited range of products or services for free, in this case, access to some media contents. The users are required to pay for the premium services, and there is no branding or service extension without the payment (Liang, 2016).

Using the power of information systems, the businesses provide the accessibility to selected contents on the platforms for free while restricting the access to the premium contents without a purchase. It enables the businesses to reach out to a broader base of customers in a short amount of time (Ansari, Garud & Kumaraswamy, 2016). Another standard disruptive model that is widely being adopted in the industry is the subscription model. Netflix is one of the most prominent examples that is ruling the industry based on this model. As per this model, the product or services are offered on the basis of subscriptions, and only the subscribers can have access to the contents offered. The cost is split and billed periodically, blinding the customers for the long term (“Netflix United Kingdom – Watch TV Programmes Online, Watch Films Online”, 2020).

The rise of disruptive models in entertainment

The foundation for the rise of the streaming apps in the current market has been laid by the demand of the customers to download or stream the contents instead of purchasing the records or getting in front of the television at a fixed time. The service providers are leveraging the busy schedule of the users and exploiting the on-the-go trend demands to replace the traditional distribution methods (Schorr, Kassler & Petrovic, 2004). It is mainly the result of another disruptive innovation – the 4G and volte mobile network services that have provided the users with increased flexibility and accessibility to whatever they may need at any point in time. They can use the World Wide Web and look into whatever they may want at any point of time from any location. There is another prime aspect that these streaming service providers tend to exploit – the provision of original contents (“BBC STORYWORKS”, 2020). Not only are the contents that are globally released accessible on these platforms, but also some exclusive contents that are developed specifically for these platforms. These unique offers attract many customers as these contents would not be accessible to them otherwise (Alsin, 2020). In this context, it is necessary to mention that disruption in business is only possible when a new market entrant aims to fulfil the segments that were overlooked and bring in a new product or service offer that is convenient, affordable, and simple in comparison to the already existing ones in the market. Even if the new offers fall short from the existing options, the users end to favour the new offerings due to its affordability and accessibility (“Music, TV and digital disruption”, 2020). It is one of the prime factors that Netflix has exploited using the power of information systems. They offer a variety of contents belonging to diverse genres at a single place, and the users do not need to jump from one place to another to seek a show they want to enjoy.

The case of Netflix is a unique example. In the business realm, stories of a start-up firm disrupting a business that already existed in the field are familiar. However, what Netflix did was to disrupt itself (Mui, 2020). The changes adopted by the business since its establishment in 2011 are exemplary, and as more businesses try to flourish in the field, the entertainment industry will soon be taken over by these disruptive businesses that are more progressive in nature.

Conclusion

Disruption is not limited to the taxi booking or entertainment industry only. Disruptive ideas have invaded almost all business spheres starting from finance, newspapers, job recruitment, postal works, to libraries, cryptocurrency, and augmented reality. The list is not limited to just these handful terms but extends far more extensive. Mobile wallets such as PayPal and Google Pay are transforming the way that human tellers used to work at banks, reducing their necessity. Hotel bookings, 3d printing, and online education portals are some of the other sectors where the power of information systems are being exploited by the business organizations to change the way the segment operates. As the days pass by, disruption will seep into all of the remaining spheres and change the entire scenario of the business world. Disruptive innovation is a prime necessity for any business that wants to thrive in the market and thus, must work accordingly to ensure its place in the market.

Reference

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Music, TV and digital disruption. (2020). Retrieved 12 March 2020, from https://www.bbc.com/news/technology-21371870

Netflix United Kingdom – Watch TV Programmes Online, Watch Films Online. (2020). Retrieved 12 March 2020, from https://www.netflix.com/

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Schorr, A., Kassler, A., & Petrovic, G. (2004, September). Adaptive media streaming in heterogeneous wireless networks. In IEEE 6th Workshop on Multimedia Signal Processing, 2004. (pp. 506-509). IEEE.

Yu, D., & Hang, C. C. (2010). A reflective review of disruptive innovation theory. International journal of management reviews, 12(4), 435-452.