In class this week, we talked about disruptive innovation. This is not about the innovation itself, but rather is about the market or business models that the innovation disrupts. As a class activity, we were asked to provide an example of a disruptive innovation. Our group talked about how the invention of the television disrupted the market for radios. Before the television was invented, the radio was the main source of information. Once the television was invented, the market for radios heavily declined.
Electric television was first successfully demonstrated in September of 1927. In the past 88 years, innovation has taken place. We have seen the size of the televisions greatly decrease, the quality of television sky rocket, television go from black and white to color, the growth of broadcasting channels and television go online, just to name some examples. So, what’s next?
The demand for cable television is decreasing. The New York Times published an article describing the declining market of cable television. Many people are unsubscribing from their TV cable bundles because of the high price. CBS’s chief executive, Leslie Moonves, explains that “the days of the 500-channel universe are over” (2015, Koblin). The agitation of high cable bills is growing, especially because of the wide variety of online choices that consumers can choose from, like Netflix, Hulu, and HBOGO. These choices are offered at a fraction of a price of cable television.
We can expect the market to move to a so-called “skinny bundle.” Instead of having a cable package that offers hundreds and hundreds of channels, we will be having a cable package that offers the most popular channels, like ABC, FOX, CBS, ESPN, etc. This will cut down the price of people’s cable bills.
So, the question arises, are online choices like Netflix, Hulu, and HBOGO a disruptive innovation for cable television. In my opinion it is. These online choices give people an outlet to watch television shows from all broadcasters at a fraction of the price. Do you agree with this or disagree with this? I look forward to reading your comments.
Link to article:
http://www.nytimes.com/2015/10/05/business/media/unwrapping-the-cable-tv-bundle.html?ref=technology
Additional links:
http://tv.toptenreviews.com/standard/television-through-the-decades-and-the-ways-it-changed-our-world.htm