What is the Difference Between

Sustaining Innovation
and
Disruptive Innovation

Sustaining Innovation
Doing it Better
Way For Products to Change
Does Not Create New Growth

Disruptive Innovation
Playing the Game
PS3
Differently
Creates a New Market
Transforms or Destroys
Current Market
Products Become
Simpler
More Affordable
More Accessible
Customizable
Drives Growth

vs.

Wii

Technology is Going to Advance

and There is No Stopping it, Even
if it Ruins an Industry

The Good News is That it Often

Creates a New Industry

Companies Either Get on Board

Or Get Left Behind

The Technology Industry

VOIP
35% of Businesses Use VoIP
Allows For One Phone Line
Avoids Long Distance Charges

Communication
Post Office to Today
Communication Forms are
Merging
Mobile Computing Could Replace
Desktops and Notebooks

Music Industrys Current State

Lower Profit Margins
Whatever song you want, whenever you want

New Music Industry Business Models

Subscription Services
Pandora, Spotify, Grooveshark

Digital Download Services

Apple iTunes, Amazon MP3

Partnering With Tech Companies

EMI and Warner

Online Album Promotions

The Killers

Ethical Questions
Difference Between Downloading Free Music
Versus Listening to Music for Free Over the
Radio or Internet?
Is Downloading Free Music Unethical?

Name That
Disruptive
Technology!

Disruptive Innovation
Helps Create New Markets
Disrupts an Existing Market and Value Network
Can Take a Few Years or Even Decades

Displaces an Earlier Technology

Unpredictable
Designed for a Different Set of Consumers in a
New Market
Lowers Prices in Existing Market

AKA Creative Destruction

Leads to Paradigm Shifts
A Change in the Basic Assumptions or System
Conditions
Permanently Disrupting the Framework

The Idea of Punctuated Equilibrium With the

Emergence of New Eras

Where There is Risk, There is Reward

The S-Curve

The Future of Hollywood

Digital Content
Netflix and Hulu Plus are
Looking at Original Content
Consumers are Willing to Pay
for Access to Content
Ticket Sales have fallen 200
million since 2002

Early Adoption Risks

Picking the Wrong Technology
HD-DVD vs. Blu-ray

Not Following Real Consumer Trends

GMs Hummer

Further Technological Innovation

Late Adopters
Kodak

Hasbro

Major Success Stories

Google

Apple

Apps
beta releases
Adwords

Reinvention
iPod
iPhone
iPad

You dont know when the transition

period will start. The idea is to
understand that it will
and become prepared for it.
-Dr. Timothy Bishop
Future Studies, University of Houston

Sources

http://clients.ibisworld.com/industryus/Major
companies.aspx?indid=894
http://www.ksla.com/Global/story.asp?S=1253
3107
http://nymag.com/nymetro/news/media/column
s/medialife/6099/
http://www.theregister.co.uk/2010/03/08/np
d_home_streaming/
http://
www.fool.com/investing/general/2012/06/18/st
reaming-music-will-make-your-ears-and-pocket
s-r.aspx
http://www.hollywoodreporter.com/news/mus

Sources cont.
http://www.zdnet.com/blog/storage/when-will-t
he-ipad-replace-desktops/1631
http://voipstrategy.com/University/VoIP_Benefi
ts.aspx.html
http://voipstrategy.com/University/VoIP_Benefi
ts.aspx.html
http://www.lightreading.com/document.asp?d
oc_id=190826
http://www.macworld.com/article/1157817/tv_
movie_future.html
http://www.washingtonpost.com/wp-dyn/conten
t/article/2005/11/11/AR2005111101644_2.html
http://myventurepad.com/jeffweinberger/91147