Saturday, July 05, 2014

How quickly can businesses adapt?

iTunes Radio is at least partly funded by music purchases. But now people don't buy music, they stream it.

Similarly, we rent movies, we don’t buy them. I think people still some game add-ons for their phones, but I don’t think the current business model for game apps is all that healthy. Elite software, like Aperture and even iPhoto, is a dying business. There is now exactly one viable product for prosumer photo management on both OS X and Win 8. Those two platforms cost billions to produce, and they are arguably dying legacy products.
There are answers to all of these business issues, but the cycle times are very short. One obvious answer leads to a sort of death spiral; enter new markets quickly, ride the surge, then walk away with growth phase revenue. Then abandon the product. It’s a potential death spiral because with each cycle a certain percentage of customers drops out from churn fatigue. It’s the technological equivalent of slash and burn agriculture, a strategy that works until one hits a carrying capacity limit.
I wonder how something like this would show up in measures of economic productivity and GDP. It feels a bit “singular”.

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