Resumen del artículo: el concepto de Innovaciones Disruptivas, utilizado en un post anterior, puede aclarar la estrategia de Google con especto a YouTube y puede dar sentido a algunas innovaciones emprendidas por el portal de vídeo.
In one of my recent posts I mentioned the concept of “disruptive technologies” (DT) applied to the current situation being experimented by newspapers. The premise is that DT overturns the existing dominant technologies or status quo of products and players in a market. The disruptor focuses initially on serving the least profitable customers to end up transforming the most profitable segment and therefore driving the incumbents to dire difficulties or out of the market. One traditional example is the digital camera. At one time they were rather shoddy, too basic for the sophisticated user, but fairly inexpensive. Starting from a no frills technology, addressed to low end users they are now able to satisfy the needs of professionals and high end customers and have dominated the world of photography while deeply transforming market rules, customers’ minds and industry players.
The question that one can ask oneself is if we can identify other examples of disruption happening before our eyes. Because of its size and the dimension of its possible consequences a possible case of disruption taking place right now could be YouTube (YT).
Launched in 2005 as a site addressed to hosting and showing user generated content it was acquired by Google in October 2006 for a disclosed figure of 1.65 billion USD and since then continues being unprofitable, among other things because of its daily bandwidth cost of over 1 million USD. What does Google have in mind while maintaining its expensive acquisition in the red? Perhaps they want YT to play a different role in the future, beyond movie/music clips and user’s uploading/watching videos based on a huge user platform recognised worldwide as THE video portal.
YT is behaving as if it wanted to evolve as a disruptor in the movie industry. Indeed, YT seems determined to transform the online movie distribution. If we look at the industry’s products in ascending order of box office performance we have short videos, independent films, commercial movies and on the top blockbusters. YT has already pretty much taken over the first category. Log onto YouTube now and as an unregistered user you can watch as many videos as you want for free; register and you can upload as many as you want. Besides those features you can vote for favourites or read what others have said and decide to watch or not watch virtually any genre you wish, all of that in an easy to navigate and interactive way. To establish a parallelism to first digital cameras, videos do not offer great quality. They can be grainy or jumpy but they are free and provide market penetration in coherence with “our general philosophy... of making sure that as many people as possible can access YT”.
In March 2008 YT annunced a new feature that would allow some videos to have higher resolution – 480x360 pixels instead of 360x240, one more step in improving quality. Now we have increased coverage with grand long term goals combined with increased quality. In June they announced a new larger 1 Gigabyte file size limit for content partners, almost enough to host a standard definition full-length film (from 1.2 to 2GB in iTunes). Can you see a pattern here?
When trying to satisfy a market that wants it “when I want it, conveniently, and through my own connection”, where does one look for the solution? Likely at the number one video company already watched by millions of viewers worldwide, especially when that company is already evolving and developing into being able to fit the bill. Its parent company’s experience in property rights management and, if necessary, targeted advertising capabilities will do the rest.
Will YT play the role of the disruptive innovator? Early to say yet, but it could very well be starting the curve shown in the previous chart. Again, a list of damaged incumbents will follow.
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