Michael Urlocker

Here's the new tune from gamers at CES: Guns are out and Guitars are in. The Xbox Live system might take advantage of this by enabling interactive music downloads. But the Wii looks like the next leader.

Look at the surprising success of the new Guitar Hero II game on the old PS2 platform. This looks like a disruptive new technology because it extends the life of old songs and creates new demand in a new game category.

Details:
http://www.ondisruption.com/my_weblog/2007/01/guitar_hero_dis.html

Here's the new tune from gamers at CES: Guns are out and Guitars are in. Will Xbox live be used to dowload interactive songs for the next era of simulation games?

Look at the surprising success of the new Guitar Hero II game on the old PS2 platform. This looks like a disruptive new technology because it extends the life of old songs and creates new demand in a new game category.

Details:
http://www.ondisruption.com/my_weblog/2007/01/guitar_hero_dis.html

I think Cuban nails an important issue implicitly. There are only two broad funtions in a business:

* To innovate, by creating new interesting products and services, and
* To market, by creating customers for those services.

The media companies that choose option one, licensing to Google, are in effect, delegating the two functions of a business to an adversary, or at least a company with its own agenda. Perhaps a generous interpretation would be that they are delegating only 1.5 functions because they are still creating original content, but not necessarily in an innovative way.

More on the disruption of mainstream media:
http://www.ondisruption.com/my_weblog/media_meltdown/index.html

Sony won such an award with PS2.

Whatever happened to Sony as the great innovator, creator of the transistor radio, the portable TV, the betacam, the walkman?

Sony has gone from being a disruptor to disrupted in 30 years. How did this happen?

Sony's 3Ds: Downgraded, Delayed and Disrupted --What Went Wrong?

http://www.ondisruption.com/my_weblog/2006/10/sony_downgraded.html

YouTube videos have something very important that mainstream media does not:

* Immediacy;
* Drama;
* Relevance to normal lives;
* Social commentary;
* Universality.

Is that worth $1.6 billion? No, because YouTube has no base of paying customers.

For all the hype of Web 2.0 and other nonsense, there is no better indicator of a bad business than an absence of paying customers.

As Peter Drucker wrote in 1973: "There is only one valid definition if business purpose: to create a customer."

YouTube has great potential, but it is only potential. The challenge ahead is for Google to convert a potentially disruptive form of media into a real business.

More thoughts on the challenges Google faces and the disruption of mainstream media:

http://www.ondisruption.com/my_weblog/media_meltdown/index.html

Observing consumer behavior, we can see customers have adapted to substantially inferior voice quality over cellular networks. And the traditional five-nines reliability of the Public Switched Telephone Network has become a moot point for many telecom users, including some businesses, who readily use their cell phone as a backup.

An important question for carriers:
If not voice quality, what are the attributes that customers value on VoIP systems? (The cop-out answer is lower prices.)

More at:
http://www.ondisruption.com/my_weblog/2006/09/voip_call_quali.html

YouTube is certainly interesting: 100 million free daily downloads, and as Mark says, many without legit copyright.

But iPod had 45 million legitimate paid TV-show downloads in the past 11 months and cumulative 1.5 billion legitimate paid song downloads. And 60 million paid iPod sales. Apparently, you can compete against free pirated services if you make your service simple to use and streamlined to a single function.

If you watch what people pay for and how they are using iPods, Apple's new iTV wireless video system looks like a disruptor of cable TV and broadcast networks.

Apple's iTV system rated an A- on our Disruption Score... Details:

http://www.ondisruption.com/my_weblog/2006/09/apples_itv_vide.html

Many companies are entering this space of video and TV on the web or by download. Apple, Google, Amazon, NBC, CNN, YouTube, etc.

Can you pick the winner? Watch what customers are paying for:

* 42 million iPods sold as of Jan. 2006
* 850 million songs sold as of Jan. 2006
* Average selling price has not fallen substantially

key ingredients to Apple's success as a disruptor in the music business:

* Simple: Single-function device
* Users pay for content
* Apple had nothing to lose and the most to gain by cannabilizing the music business

Why did Sony, which created the Walkman, had the electronics expertise and owned record labels fail at this?

http://www.ondisruption.com/my_weblog/2006/09/disrupting_tv.html

My view: Don't trust what people say; trust to what they do.

Market research said there was a big market for this service with a 44% take rate.

But user actions suggest otherwise. Notice how Verizon cancelled its Airfone service because of low usage.

If you watch people on airplanes, here is what they do:
Snooze,
Booze,
Eat,
Watch movie,
Listen to iPod,
Read.

Note the mushrooming of portable DVD player and DVD movie rental kiosks at airports.

Looking at the Boeing's service through our Disruption Scorecard, it would score two poor grades which were warning signs.

Details:
http://www.ondisruption.com/my_weblog/2006/08/boeing_pulls_pl.html

Five questions pop up to help get at the answer Cuban is looking for: * What is the job that people are 'hiring' movies for when they go to the theater? * What are barriers to the consumption of movies? * Are there ways to eliminate or reduce some of these barriers? * Are parts of the market overshot? * Is there a simpler, lower-cost approach that appeals to a neglected or underserved market segment? The first two questions are relatively straightforward and I will take a quick crack at them. http://www.ondisruption.com/my_weblog/2006/07/disrupting_the_.html The other three questions are at the heart of the issue and I will will attempt to address them over time. It would be a disservice to rattle of quick answers on those issues. Mike@OnDisruption.com