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Tom Hulme, de novo.

Why disruptors? Disruptors centre themselves around consumer needs, they are optimised for exploration and have an incredible knack of turning the incumbents’ perceived advantages into their Achilles’ heals. Disruptors frequently reveal the direction in which industries are headed. Let me share a couple of examples.

Agora ele fala do American Idol de uma forma muito foda:

Imagine you’re the boss of one of the big record companies a few years ago. You run a finely oiled machine, paying expensive “A&R” (Artist and Repertoire) managers to seek out bands to sign. Once you’ve signed them up with a hefty up-front payment the production machine kicks in allowing you to cash in on your investment through a global system of retailers. You’re benchmarking yourself against the other labels using classic exploitative phase metrics. These might include volume of sales or the percentage of your artists that go platinum. That exercise is no doubt important, but it prohibits you from looking at the disruptors for inspiration until it is too late.

And then, out of nowhere, Simon Fuller and Simon Cowell’s Pop Idol springs up with a highly disruptive model. For those who are not familiar with the format, it comprises a TV show that seeks out new talent. Viewers pay to vote on the talent they like and Pop Idol signs a deal with the winner, publishing and promoting the artist and organising live tours.

The innovation is in the business model. Pop Idol turns the traditionally significant A&R search cost into revenue, and reduces risk by taking proven talent (viewers have already made clear who they like to market). It also enables the talent to be acquired at low cost (terms were agreed in advance of any success) and it finds creative ways to monetise the talent above and beyond traditional music sales (through its tours).

The success of Pop Idol shows us how accepted costs might be turned into revenues and the value of the wisdom of the crowd.

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