In August of this year, Marc Andreessen, the man who built the first commercial web browser, wrote that, ‘software is eating the world.' Yet, he noted, companies continue to underestimate the impact modern technology is having on their markets. Andreessen suggested this myopia might be down to bad memories and burnt fingers following the dotcom boom and bust, when many outlandish promises about the future were made and broken. Additionally, he cited a lack of appreciation about the speed of change that continues to take place around us and the subsequent dramatic shifts in the landscape for companies, brands and organisations. For instance, Andreeseen believes the rapid uptake of smartphones that's driving global access to the web will create vast online markets of five billion people. Furthermore, reaching these giant markets is becoming easier as the burgeoning capacity and efficiency of cloud computing continues to drive down the cost of running web services. ‘Companies in every industry need to assume that a software revolution is coming’, advises Andreessen who is now one of the world’s most influential technology investors. It strikes me that his comments accurately capture the current mindset of...
...big brands and the marketing industry. Despite experiencing constant shifts in the environment in which they operate brands assume that such change is going to somehow be ringfenced – despite evidence to the contrary. So, for instance, whilst it's now accepted that large parts of consumers’ media consumption and their resulting behaviour have changed for good, a belief endures that some aspects of the marketing mix will remain untouched. For example, the current received wisdom is that software may radically change the way we consume news, go shopping, or keep in touch with friends, but TV will stay largely unchanged. This complacent viewpoint ignores recent lessons about the way in which networked media undermines and reshapes whole industries, allowing powerful new players to get a foothold.
For a long time the music industry held a similarly relaxed outlook; that people will always want to listen to great music and musicians and that was that. Which of course was true. However, the assumption underlying this view was that the Big Labels owned and controlled the industry and could set their lawyers on any newcomers looking to upset their gilded apple cart. The truth was that while people do indeed care about music, no one cares about the industry that runs it. So when Napster appeared, unbundled the product and gave people what they wanted all hell broke loose. Which created enough space for Steve Jobs to enter the market, build on what Sean Fanning had started, and eventually take control of the whole industry by developing a massive distribution platform that now sets market prices.
Likewise, the myopic view that big-changes-are-coming-everywhere-except-here, as described by Andreessen, was prevalent in the telecomms market. However, then Skype came along and used the same technology as Fanning to route around a whole industry, allowing people to miss out the carriers’ networks completely.
Correspondingly complacent attitudes were held by phone handset manufacturers, most notably Nokia, which - again - assumed they were the natural gatekeepers to the marketplace. But then Apple changed the game by offering genuine mobile web access through the iPhone. And Nokia began to smoulder.
Today, it seems that the Grand Fromages of the TV industry are in an all too familiar position. They believe they are in control of a marketplace that will remain unaffected by the surge of networked media that is transforming the world around them. So industry bodies such as BARB and Thinkbox, entirely missing or choosing to avoid the point, continue to publish data about how much people love the TV industry when in fact the figures only show how much people like watching great content on a big screen.
In the same way that consumers continue to enjoy music, chat with friends and choose the latest cool phone, people will keep on relaxing in front of the TV with their favourite films, drama, sport and news. However, in the deeper waters technology super-predators, attracted by the familiar scent of complacency, are circling the TV industry sizing up the juiciest of media prey, waiting for the tides of networked media to give them their first real bite. Perhaps Ofcom's report in August that one million connected televisions were sold in the UK last year might prove to be the sea change for which they've been waiting.