Different Digital Disruptions – Guest Post By Duncan Stewart

Technological change is almost always told as a story of destruction. A new thing is invented, and it crushes everything in its path. From Frankenstein’s monster terrorising villagers in 1818, through post-nuclear Godzilla stomping Tokyo flat, we have ended up in 2015 with Benedict Evans telling us that “mobile is eating the world.”

But is that view of technology, innovation, and disruption always true?

It sure is some of the time! From 2002 to 2015, US print newspaper ad revenues in constant dollars fell 78%, with a compound annual decline of almost 10%. Coin-operated arcade game revenue fell 89% between 1992 and 2015, again in constant dollars. The largest video rental company in the US went from $6 billion in revenues in 2004 to bankruptcy and zero revenues in 2010, at least in part due to streaming video on demand services. But that was a single company, not an entire industry: the real poster child for digital destruction is what happened to sales of recorded music after the MP3 file and the various players. From 1999 to 2015, US compact disc sales fell 92% in constant dollars.

Can you even imagine being in an industry where revenues – not profits, but revenues – fell 92%? Even Godzilla left more buildings standing!

Based on these examples, it is clear that growth in new technologies always means the end for old industries: digital destroys the old ways of doing news, games, video and music. Case closed.

Not so fast. Being able to read text on a screen has truly changed the world of print newspapers (not to mention print magazines, print directories and print catalogues.) One would therefore reasonably expect the same disruption to occur for print books. Famously, Nicholas Negroponte predicted in 2010 that print books would be dead in five years. Here it is in 2015, and not only are eBook sales stuck under 20% of all books purchased in the US, but sales are actually declining while print book sales are rising.

The gaming market is certainly influenced by new technologies. The rise of the smartphone, tablet and casual games has changed the market, with mobile games surpassing console games in 2015 and predicted to exceed PC games revenues in 2016. But although mobile will be the single largest gaming market, both console and PC games are still growing, up an anticipated five and six percent respectively in 2016. Further, although PC and console titles are not the only game in town (as it were), they will still represent over 60% of the global market in 2016; a far cry from the fate of coin operated arcade games.

Streaming video disruption led to boarded up video rental stores across North America and the largest player will have over 70 million subscribers in over 60 countries by the start of 2016. But what impact has streaming had on traditional TV in North America so far? Although there were fears that 20% of the nearly 100 million subscribers to pay TV service would cancel and ‘cut the cord’ as long ago as 2012, the actual decline was fewer than 170,000 subscribers in 2013 and 2014, and fewer than 10,000 subscribers in 2012. Or between 0.01% and 0.2%. Further, the monthly price paid for pay TV in the US is still rising, and even the number of minutes of TV watched daily has fallen by only seven percent from the peak (of 334 minutes of live and time-shifted TV per day) in 2013. The rise of streaming has had a negative effect on the traditional TV business, but it is orders of magnitude smaller than what happened to rental stores.

Finally, let’s go back to our digital destruction poster child: the music industry. The MP3 file didn’t just change CD revenues into some other kind of physical format revenues, or even into digital revenues, instead the growth and ease of piracy has caused ALL music sales to collapse, right? In fact, between 2008 and 2015 one US live music company saw its concert revenues grow 23% in constant dollars, or 2.8% annually. The digital trend that almost obliterated the CD industry a) didn’t seem to hurt live music at all, and b) may in fact have freed up consumer dollars for spending on live concerts.

Writing from Paris in 1913, Gertrude Stein said “A rose is a rose is a rose is a rose.” She didn’t write it on a smartphone, and a century later I want to modify her quote: digital is not digital is not digital. The forces unleashed by innovation and disruption are not the universal and obliterating things that we imagine or read in the media. The same digital trend that is crushing print in many forms is leaving print books more or less intact. Live music is benefitting from piracy. Sometimes disruption destroys a traditional industry, sometimes it hurts it a bit, and sometimes it actually helps.

Duncan Stewart,
Director of Research at Deloitte Canada

Short term: Trust vs Distrust – What is at stake for brands, corporations and executives? Guest Post by @Olivcim

In my eyes and in the wake of the disruptive digital force shaping our present and near future, building and nurturing trust and influence with all your stakeholders is one of the very key issues that any executive should put first on his/her strategic agenda. As a crystal-clear proof, take a look at The Edelman Trust Barometer, which has been substantiating this critical trend for almost 15 years. In many countries and not only Western, there is a sustainable and growing distrust towards politicians, media but also companies and anyone else embodying the “establishment” or the official “knowledge”. With its lowered technological barriers and the ease of creating transnational relationships, brands and corporations live in a networked society that totally reshuffles the cards at a blistering pace. Citizens can get access to much more information than they were allowed in the past. As a direct consequence, it also raises awareness about the on-going issues and makes things trickier to hide or manipulate.

This assessment matters for corporate brands as well as product brands. People no longer take things for granted when a brand or a corporation speaks. People require to be heard and involved in projects that impact their own lives, backyards or aspirations. People expect to be part of the solution. As an example, you can refer to palm oil. People are increasingly paying attention to social and environmental topics. Consumer goods firm Unilever, acting on the demands of tens of thousands of consumers, is committed to purchasing all of its palm oil from sustainably produced sources by the end of this year (2015). And if you try to fiddle, the likelihood of being caught in the act is higher and higher. Especially by activists and NGO who are at the cutting edge of digital connectivity.

A few years ago, fostering trust was probably a bit simpler as the main intermediary was the journalist. The latter has become suspect for many reasons. Among them, narrative bias, sensationalist reporting or complacency with the mightiest (politicians, corporations, governments, etc.) are often fiercely criticized. This is why nowadays it is not enough to only focus on them although media relations remain pivotal in a strategy. You must talk and actively listen to NGOs, groups of interest, regulators, employees or anybody concerned by your activities. If you don’t do that, you put your reputation at risk and might trigger distrust against your activities.

The incredible Volkswagen fraud story provides a relevant case study. For several years, this company has hammered strong messages about “clean diesel” at the corporate and brand levels towards consumers; but also to their own collaborators and the various stakeholders in the markets in which they’ve been operating. It turns eventually out that the company cheated on purpose by using a specific software reducing gas emissions on demand during approval tests. Despite millions and millions spent on advertising and public relations, it shows that cosmetic communication is pointless. Even worse, it generates distrust at the end of the day. And today, the German car manufacturer has to fight not only against justice, regulators and media but also car dealers, car owners, NGOs, class action groups who loudly express their concerns.

Nowadays, almost anybody is able to know something and unveil it all over the world through social networks, online petitions or even whistleblowing platforms because they want to call to action. From now on, the challenge is therefore to restore the damaged trust and reputation of the company by acknowledging what needs to be said, by taking concrete actions to abide by the laws but also by proactively listening to the concerned stakeholders and meeting some of their requirements. It will take time and money but there is no loophole. Sacking the CEO was a good first decision for Volkswagen, but the controversy is far from being over. Today, they are under close scrutiny from whoever is concerned. They will have to make the right decisions leading to a refurbished but trustworthy reputation. And I bet my two cents that similar stories will occur at other companies if distrust remains at these high levels. The winners will be those inspiring trust by leveraging a smart dialogue with their stakeholders.

Olivier-Cimeliere futureproofOlivier Cimelière
CEO Heuristik Communications, a consultancy based in Paris
Author of “Le Blog du Communicant” (in French)

Digital Transformation of Industries – Guest post by Eric Gervet

Over the last two decades digital technologies have manifested themselves as an extremely powerful combination of mutually reinforcing, exponential drivers of fundamental change.

At first this change took the form of exciting new channels to markets, a step change in our ability to exchange information, and an important source of efficiency. It is now clear, however, that digital technologies will transform almost every aspect of doing business, from redefining markets, putting customers in charge, disruptively innovating on every aspect of value delivery, making an entire range of new business models possible, and blurring industry boundaries. On top of that, digital technologies deeply transform the way we organize human activity and can put our knowledge and expertise to work, not just locally, but on a global scale.

From an industry and business perspective there are a number of dynamics that are of particular importance in this culmination of industry change driven by digital technologies:

Overload of opportunity

The combination of digital technologies creates a plethora of opportunities not only for doing things fundamentally better, faster, and cheaper, but also to redefine markets, customers, products and services, value chains, and business models. This comes with highly challenging consequences. Many companies are so busy dealing with the fall out, that they no longer have the organizational headroom to properly strategize the wealth of opportunities. As a result, many have become reactive to the digital technologies that have driven the change coming their way.

The risks and opportunities resulting from digital technologies have proven difficult to strategize mainly for two reasons:

  1. Most digital technologies related drivers of change can be observed to have exponential growth behaviors, as characterized by Moore’s Law and the network effect. This quickly goes beyond the limits of our imagination. We might envision what 50% more functionality could mean for us, but we have real problems envisioning what something will look like, or what it can do, if it has 5,000% times more functionality. This is further complicated by the fact that most digital technologies related drivers of change never act alone. Most of them strengthen and feed off each other in major ways. This makes that digital technologies play out in closely knit systems of drivers exponential change that are even harder to fathom than understanding the impact of a single individual driver of change.
  2. The overload of opportunity is a strong incentive for businesses to simply get going. Even without properly strategizing the way forward, there are so many opportunities that ensure benefits are certain to accrue, regardless of the direction taken. Competitor dynamics however, can quickly turn such pursuit of new opportunities into a frenzied effort just to stay competitive: whenever a competitor enjoys success in capitalizing on digital technologies in a specific way, others will have to add it to their to-do list to stay competitive. This can quickly lead to a situation in which companies are overly busy and captured in the here and now.

Customers are in the driver seat

If companies would do a Porter Five-Forces analyses today, most would find the results to be extremely predictable and remarkably similar for many different industries – at least in terms of their insights and implications.

For a start, almost all will be characterized by a truly massive shift in power towards customers. Their bargaining power has enjoyed a phenomenal boost, as digital technologies have enabled greater market transparency and accessibility. Customers are expecting – and are increasingly getting used to – an unlimited choice, getting more than they asked for, whenever, and wherever they want, for less than they paid before. This has triggered an almost universal drive to make organizations customer centric, to engineer the most enticing customer experiences and offer the most optimal sales processes – anything less would be a disappointment to customers.

Customer bargaining power is only half the story however.

Some of the other forces have gone through metamorphic change as well. The same technological trends that fuel the transparency for customers has also provided the basis for all sorts of dis- and re-intermediation at various points in the value chain, dissolving industry and business boundaries in the process. Technology has exponentially driven innovation opportunities, triggering the redefinition of products and services and the reconfiguration of entire value chains, routinely leading to new entrants and substitutes, networked business models, and eco-systems of business activities creating value for customers. Together with increasingly global markets, this has taken industry rivalry to its highest point yet.

All these dynamics create a double-edged sword. On the one hand, there has never been more opportunity to innovate and opportunities to take businesses to the next level, but at the same time, never has there been more need to do so just to stay competitive and to stay aligned with fast growing expectations from customers.

Unknown and disparate outcomes

Given this overload of opportunities and the relative difficulty in strategizing on which opportunities to pursue in hopes of capturing values, there is a clear incentive for businesses to simply get started. Many companies – both incumbents and startups – do so in a variety of ways, such as experimenting with digital ways of working, developing digitally enabled processes, launching new (digital) businesses, adapting business models, acquiring new capabilities through M&A, etc.

Such activities can be of crucial importance to put organizations on learning trajectories and provide them with the necessary transformational experiences that help it get their mind around new business paradigms. Experimentation with new concepts and pursuing new opportunities also helps companies take advantage of the potential created by digital technologies.

From a company perspective, without an overall strategy guiding these efforts, there is no reassurance that such digital exploration reinforces itself (or even that counterproductive efforts are avoided), nor is there any guarantee that the results are optimally relevant for the companies going forward.

As a result, there are substantial impacts on the value chains, activities, knowledge and people inside organizations that are left facing the digital dilemma. On one side of the spectrum, incumbents face a variety of threats and in some cases even the chance of outright substitution, while on the other, many start-ups explore new territories only to run into the end of their funding.

A much discussed logical response to such unknown and disparate outcomes is to become more agile and responsive so that companies can take greater advantage of the impact of digital technologies than competitors. In fact, agility is now commonly seen as a decisive factor for securing future success. Organizational agility is of course always a worthy goal to pursue, but it is not a true substitute for the strategy that allows for proactively making decisions crucial to charting the path to superior performance going forward.

Reclaiming control

There is now widespread recognition that going forward, most industries and businesses will go through sweeping metamorphoses. Many leading companies are already putting themselves though wholesale digital transformation. In doing so, companies can draw on the learning of almost two decades of digital technologies driven disruptive innovation and experimentation to help them capitalize on what digital technologies can offer to them and avoid becoming irrelevant in the digital onslaught.

The impact of digital technologies, however, is not confined to single companies; not only does it extends across company boundaries, blurring industry definitions and spurring growth in newly established business ecosystems, but in doing so has profound economic, social, and public effects. This puts a premium on being able to proactively deal with the opportunities and risks brought about by digital technologies.


Eric Gervet futureproofEric Gervet, @ericgervet
Head of San Francisco Office of AT Kearney,
Global Head of the Digital Practice at AT Kearney

Futureproofing Against The Disruption of AR and VR – Guest post by Olivier Cimeliere

Augmented & Virtual Reality – Is it a fad or a sustainable trend?

Virtual reality (VR) is clearly in the process of becoming a trend for communication by brands and by corporations. In North America, the content in virtual reality and augmented reality (AR) is increasingly integrated into the communication strategies of the major groups. And, at times, we are seeing VR experiences being enhanced with what might otherwise be considered “augmented” elements, i.e. clickable links within the virtual space. Although for a long time, the VR technology was reduced only to video games, it is now trying to prove itself as a conduit to other types of audience. That’s why Facebook did not hesitate to spend $2 billion in 2014 to buy Oculus Rift, a helmet that allows navigation in virtual and augmented content. This will change the way we communicate.

For brands and businesses, the benefits are many. First, offering virtual reality content has the advantage of positioning the brand as innovative, the better to differentiate oneself against one’s competitors. It is a remarkable (i.e. stand-out) activity for customers. This is a crucial point in time because we live in an era of information overload where the netizen’s attention is volatile and fragmented. Then, with virtual reality, one can offer an immersive experience where the user really feels in touch with the content they are viewing and with which they can even interact. For example, by opening a video clip or changing the point of view of a building or a landscape. Editorial possibilities are tremendous and are capable of being adapted according to the communication issues or targeted communities. There are new features that enhance the impact of the information you want to share. It is generally estimated that 80% of our attention span is primarily visual! These new devices have, therefore, their whole reason for being as part of a more comprehensive communication strategy.

A few examples

I will cite four examples to show that virtual reality can relate to very different sectors.

  1. The brand of sportswear and hiking, North Face. They have developed a mobile app that is also available in 3 shops in New York, Chicago and San Francisco. Thanks to a sophisticated 360° video capture, a customer can experience an immersive virtual hike in the famous Yosemite park in California or in the Moah desert in Utah. The idea is to entice people to buy the equipment in order to go enjoy this type of hike for real. The app was a great success in 2015, with 15,000 downloads on the Google Play platform alone!
  2. The Marriott hotel chain. They needed to become better known to younger audiences and thus designed two different VR experiences. The first took place in a London street where they offered passersby the opportunity to escape for a moment by being transported on to a beautiful beach in Hawaii for 100 seconds! The second instance was made available in certain Marriott facilities. It is a program called “Vroom Service.” Residents were able to request a special helmet and then – from the comfort of their hotel room – virtually wander around with another person in one of three dream destinations, in Chile, Rwanda or Beijing. Then inevitably the guest is tempted to book another trip!
  3. The NGO, Amnesty International. In exchange for a donation, passersby in London were allowed to wander virtually through a virtual reality helmet in the ransacked city of Aleppo, Syria, crafted through the photos and 360° video made by a group of Syrian citizen journalists. It was an effective way to raise awareness of the dramatic situation in the country.
  4. The chain of real estate agents, Nexity (based in France). They opened in November 2015 a connected agency in the heart of Paris. The particularity of this agency is to be able to visit a prospective property through the Oculus Rift technology. Virtual reality allows a visual immersion throughout the selected apartment or house, providing a very different experience and saving the customer precious time. The client can, thus, better refine his/her choice and visit on site only those properties that hold the biggest interest, rather than traipsing across town to see locations that did not deserve the trip.


The trend of virtual reality is clearly going mainstream. A concrete sign that times are changing: manufacturers, such as Sony and HTC, are also marketing virtual reality helmets. Although the video gaming area continues to lead the way, there is no doubt that the proliferation of this type of device will democratize access and the technology will quickly spread to other sectors. In particular, the media are starting to be more prolific users. In early November 2015, the New York Times distributed 1 million free VR cardboard goggles to subscribers and also launched a specific app with the intention of adding a monthly documentary. The US news agency Associated Press (AP) also just dipped its toe in the VR pool with a movie on the Calais shantytown in France, where thousands of migrant refugees from Africa and the Middle East had taken up camp. Meanwhile, Google intends to bring VR to the masses. Last year, they announced that YouTube would support video formats in VR and that viewers will be able to see all the YouTube videos via the cardboard goggles.

The firm, CCS Insights, recently published a report in which they predicted that 24 million VR compatible devices would be sold worldwide by 2018, representing a market size of approximately $4 billion. In terms of market segments, video games will continue to dominate according to financial analysts, hitting $1.4 billion in 2025. However, two other heavyweights, the NFL and the porn industry should generate, respectively, $1.2 billion and $1 billion.

Virtual reality is far from a techie fad or only for hard-core gamers. For brands and corporates, this technology provides very interesting opportunities to cultivate the relationships with their audiences. It’s an alternative way to gain greater proximity and deliver impact and foster engagement via a visual experience.

Olivier-Cimeliere futureproofOlivier Cimelière  @olivcim
CEO Heuristik Communications, a consultancy based in Paris
Author of “Le Blog du Communicant” (in French)