I’m a relative newcomer to the ideas behind disruptive innovation (when Clayton Christensen first published The Innovator’s Dilemma, which provides an evidence-based framework for how new entrants to a market can displace the incumbents by introducing products and services that compete asymmetrically, I was still at school).

When I did, eventually, come across Christensen’s work, I could probably have skipped over the majority of the evidence part; as a market researcher in the tech sector, I only had to look around at the changes taking place in the computing and telecoms markets.

“If I’d asked my customers what they wanted, they’d have said a faster horse” Henry Ford

We recently took over the AOP Gallery in Shoreditch to hear from former AdMob top exec, Russell Buckley and his thoughts on the future of mobile technology, retail and civilisation. So sit back, have a cup of tea and prepare to embrace ‘The Singularity’.

 

(You can read the full version of this article in the latest edition of GfK TechTalk here.)

As consumers, we’re handing over more and more data about ourselves in exchange for products and services we take for granted. It’s this individual-level data that’s likely to provide the next generation of recommendation models, and the user experiences they fortify.

Recently, for the first time in ages, a friend recommended an album to me and I went straight out and bought it. No listening to samples on iTunes, no streaming on Spotify, no whatever it was that we did before these formats existed – just me and my credit card. As it turned out, the album was disappointing. I don’t want to point fingers, and I’m not going to bore you with what it was, but it did spur me on to think about how the role of recommendation is being changed by technology.

In June 2009 with the passing of the HADOPI law, France became the first country to use legislation to tackle the issue of piracy in music downloads. The UK Digital Economy Bill, which passed somewhat controversially through Parliament earlier this year and includes provisions for banning illegal file-sharers and blocking websites that infringe copyright laws, is similarly designed to tackle internet piracy through the use of legislation. But how successful is legislation of this nature in reducing music piracy, and more importantly, to what extent does it encourage legal consumption? There seems little evidence so far that they are doing either.

The IFPI (International Federation of the Phonographic Industry) has revealed its analysis of global music consumption in 2010, highlighting an overall drop in physical CD sales of -14.2%, with an increase of only 5.3% in (legal) digital sales during the same period leaving a significant shortfall in revenue for the industry.

 

Declining consumer spend on physical music has forced the demise of many traditional bricks and mortar record stores. For the music industry, question marks remain about how, and even whether, the revenue generated by digital music can offset this loss. Rather than fighting this, the music industry first needs to ensure that the remaining retail consumers don’t drop out of its customer base altogether.

High street closures

The first album I bought was Happy Nation by Ace of Base. Yeah, I know. The format I bought it on – cassette – hasn’t aged any better than their distinctive (and, some would argue, inimitable…) brand of Swedish pop-reggae. And now, it looks like the record shop I purchased it from might be taking a similar slide into the field of “ha, remember them?” obscurity.

The shape and direction of the digital music industry can be hard to evaluate at the best of times. This week saw BSkyB give up on their Sky Songs service just a year after launching it [1], while Spotify continues to grow a paying subscriber base (albeit not yet to a level deemed profitable) [2]. Given these contrasting fortunes, it seems an appropriate time to revisit demand for streaming services, and see whether they’re any closer to establishing the mass-market audience the model relies on.

With growing smartphone and tablet ownership, and increasing connectivity of home stereo/entertainment systems, the notion of being always-on and seamlessly interacting across multiple devices is becoming a way of life for many consumers. Within this context, a service offering unlimited access to any song, artist, or label catalogue, across any internet-enabled device, can surely have never been a more enticing proposition?

Mobile phone users under the age of 16 are extremely sophisticated, with deep brand experiences and preferences. This raises significant questions for network operators, handset manufacturers and service providers regarding how best to engage an increasingly important market segment.

You could be forgiven for a sense of déjà vu. After all, rising mobile phone use amongst children is not a new phenomenon. As long ago as 2004 the Guardian was reporting growth in ownership amongst under-10s, [1] and media coverage concerning potential health concerns can be traced back even further. However, our ever-increasing reliance on, and immersion in, mobile phones and the digital services we use them to access, justify revisiting the topic.