By Robert Gekchyan, CEO and Founder, ANG Digital –
It seems business journals can’t stop writing about the on-demand economy—the business-to-consumer industries that have been completely transformed by technology, such as local transportation (Uber and Lyft), hospitality (Airbnb) or food delivery (GrubHub). We all know the factors that gave rise to this economy—mobile ubiquity, persistent connectivity, GPS availability, inexpensive cloud technology, a global work force including a plentiful supply of capable coders, and consumers who have no interest in waiting or overpaying for services.
The result has been liberating for most consumers and independent providers, terrifying for a few industry incumbents, and certainly transformative from a macro-economic perspective.
Now these same factors are already reshaping B-to-B industries as varied as personnel management (JobVite), supply chain (Floow2) and logistics (TruckBuddy), facilities (WeWork), enterprise software development (Gigster, VenturePact) and consulting (HourlyNerd). Are we next?
Let’s consider the characteristics of the business to business industries most disrupted by ondemand technologies:
– Historically high barriers to entry, negated by the technology shifts described above;
– Perception that the industry operates based on “specialized knowledge” that cannot be easily transferred;
– Limited suppliers, often as a consequence of industry consolidation (itself a warning sign that industry profitability was under pressure);
– High overhead due to multiple management layers and specialists; and
– Labor-intensive services where personnel account for a sizable proportion of total cost.
That could describe just about any industry, and if it’s true, no industry is immune to on-demand disruption. So yes, I’m looking at you, media services.
Long after temporary staffing firms and taxi authorities started feeling the pinch, we are still addressing each new digital media demand or opportunity using the same model: single-solution “platforms” with a serviceable interface, while under the hood toils an army of junior engineers working nights and weekends. I know from experience, having served in those armies for three separate media services providers.
Our industry has been either stagnant or in decline for a decade, and we continue to hew to the same model and values—even as we have watched erstwhile market leaders exit the industry. We do look ripe for disruption. Consider:
– Current solutions are expensive because we are captive to a last-gen model that prioritizes custody over access. Custody also requires custodians, and custodians cost money, often without providing reciprocal value. It is buying CDs, calling a taxi, signing long-term office leases and paying for a full-service media services solution. It’s out of step with every major cultural trend. Access is streaming, ride sharing, We Work and paying only for the cloud-based media services functions you need.
– Current solutions are inflexible because we are focused on creating tools rather than creating empowerment. Tools are limited in their utility because they typically solve only a specific type of problem. New problems require entirely new tools, and as the pace of innovation quickens, we have less and less time to amortize development costs before our tools are obsolete. And besides, who wants 30 different platforms for 30 different services?
By contrast, empowerment-based solutions provide the client with a skill to solve a multitude of problems. This is the Elon Musk model of not just creating a product (electric vehicles), but an entire ecosystem (batteries, autonomy, energy generation and storage). On a smaller scale, at ANG we have designed a platform that can render digital special feature packages, automate time-based metadata and content ingest, processing and management, all from the same login.
It is a much more efficient approach, and comes much closer to achieving the Holy Grail of all service providers: multiple touch points with our studio clients.
– Current solutions are un-scalable because they are designed for a specific type of enterprise client and rely largely on manual processes for order entry, review and approval, delivery and reporting.
I believe disruption to media services is not only imminent, but is also necessary. After all, in every industry disrupted by the on-demand economy—whether transportation services, staffing or software development—category spending has increased as on-demand technology unlocks previously unrealized value.
Of course, tell that to the taxi authority. So, in order to not be left behind by on-demand disruption, we need to make wholesale changes in how we think about solutions and evaluate the companies that provide them. Service providers and clients alike need to think in terms of solutions that provide access and not custody, empowerment and not tools.
We all need to understand that the proof points of yesteryear are less relevant, if not an outright hindrance, in the on-demand economy:
– Having a lot of programmers under employment is commendable, for instance, but how much of their time is dedicated to unscalable operations instead of development?
– Occupying buildings that feature the company name is an indicator of permanence, but how much of your service bill is going toward paying that overhead?
– The number of years a vendor has been in operation certainly speaks to its longevity, but if the company is unable to innovate, or is too tied to its legacy thinking to change its approach when change is required, then what value does that longevity provide?
– Content security is critical, but does the model of large on-premises servers, storage and dedicated headcount provide any advantage at all in the era of cloud infrastructure? In the on-demand world that we have already begun to embrace, merely “dabbling” with the cloud is not sufficient to manage services and costs efficiently.
– Capacity is a legitimate concern for larger clients afraid that smaller (e.g., more on-demand oriented) providers will be overwhelmed, but this only an issue if the solution requires several human touch points.
Remember, we used to think taxis had to be yellow.