We have seen it before, all over different industries.
First it was telecom, forced to put its infrastructure at the disposal of new competitors and substitutes in the communication arena like Skype and Facebook. But their managers still had the perfect delusional argument to end all war room meetings with “We have the customer data”. Their perceived value proposition and relationship with their customers is today generally speaking seriously damaged. Almost the only way they have left to compete is an endless race to the bottom on price, specially in the mobile realm.
Then we saw a similar phenomenon with traditional newspapers (including their web versions). They were told what was coming, but they were too slow to react too. They too had their own delusional argument: “We produce quality content”. First Google and now Facebook Instant Articles are increasingly eating their advertising pie. Fast.
Along came the banks. These are so terrified now that they are reacting somewhat faster than the examples above, but everyone is counting with a huge challenge when PSD2 becomes a reality. BTW, until recently, they had their own delusional argument too: “We have the bank offices”. Their cousins, the consumer loan banks, are facing in the mean time a new attitude from aggregators and price comparison engines of consumer loans, threatening to dictate their own rules because, indeed, they own the customers.
The same can be said about hotels. (Momondo, anyone?)
The internet is eating established customer relationship for breakfast. The traditional entry barriers to build them (expensive and time consuming) are becoming irrelevant in the digitalization era. The customer is one click away for everyone with an IP address. All players that once functioned in a coordinated mode in established value chains are now fighting to become the top dog of aggregation. Their goal is to address their products and services directly to the end user.
Now the game is definitively on with linear TV. They were also warned. They also had their own mantras: “We don’t see it in our charts” or “Content is king” or “We refuse to be reduced to an app”.
Now they are slowly giving in, understanding that the future is indeed an app, their own app. The alternative is to become a mere suppler to a bigger content aggregator, owners of the viewers and the advertising money.
This will affect the whole value chain. Players ,that until now collaborated in somewhat harmony, will scramble to reach the viewer first, fighting for their relevance, trying to build their own new business models. The perfect example of this shakeup happened a few days ago, when Warner Bros threw the towel on their traditional business model and announced the development of “web-only services, seeking alliances”.
In the mean time, Netflix has already signed exclusive content agreements with the true King of Content: The Disney corporation.
You may have heard the phrase “Don’t wake up a sleeping giant”. In the digitalization era, it applies perfectly. Because when they finally wake up, they may have nothing left to eat.
What is your company’s delusional mantra?