Just read this article about ESPN and how it’s contributing to a drag on Disney’s bottom line. Funny thing is that for the last decade, it was a major profit guzzler while Disney’s other divisions were dragging it down. But now, due to cord cutting and gradual aging of people used to paying for cable, ESPN is finding that even live sports can’t hold the attention of the masses. Their viewership is declining relentlessly.
What should you do when there are fundamental technological changes destroying your customer base? Adapt and disrupt yourself before someone or something else dose. What specifically can the cable giants do? Move their operations online, where more and more consumers are. Rely on advertising or charge minimal paywalls (like HBO) for gated access to premium content. Hulu is a viable medium for archived episodes, while Youtube can stream live shows. Accept lower profits for higher market share in a dwindling industry. Are they likely to implement these changes? Doubtful. Large businesses are by nature conservative, and CEOs are more likely to be fired for rocking the boat than by riding a dying business model to the grave.
Coincidentally, another example of an industry that’s facing rapid technological change is that of computer chips. Whether it’s Intel, AMD, or Nvidia, they’re finding that fewer people have need to upgrade their computer and buy faster chips. We’re so far from being bottlenecked by the CPU today, while we get much more bang for the buck by upgrading the RAM, hard drive to SSD, or broadband internet speed. So what are these chip makers to do when people are slowing the upgrade cycle and some opting out by relying on mobile devices? They go on a quest to find a new must have product or technology that requires more computing power. Gaming was historically the big driver over the last few years, but the next big advance that everyone is betting on is virtual reality.
Herein is an opportunity for up and coming developers or aspiring entrepreneurs. Just like the mobile revolution unleashed a market for gaming apps, so can talented programmers plan for creating worlds in VR. One need that I’ve identified – creating a simulation program for surgery trainees to practice doing surgery, with all the unanticipated complications along the way. It will take a major team of programmers, visual designers, and surgeons to create, but it has the potential to revolutionize how surgery training is done.