Características del primer empleo al egreso

Customer segments

Obtaining a better understanding of how customers are segmented in the market place could have been a source of innovation that has triggered the current market development (Voelpel et al. 2004). A small, but growing, amount of customers are seen to be chang- ing their viewing behavior. They are watching more content on-demand and from the Internet on their computers. Some customers in other countries are ter- minating their TV-subscriptions as a result of online services, and this cord-cutting is taken very seriously by distributors in the USA. Customers are also look- ing to the music industry, where they through services such as Wimp and Spotify can gain access to all the content that they want, whenever they want and on all devices for a low monthly subscription fee. This leads them to expect the same thing from the TV-industry. Solutions for on-demand TV such as TV 2 Sumo have

existed for quite some time without getting the same attention as today; therefore we do not believe it to be consumer demand that ultimately has fueled the need for innovation, even though it has played an impor- tant part in the industry development.

Channels

Channels encompass all the ways a firm interacts with its customers, including distribution, sales and mar- keting channels. The Internet as a new distribution channel could easily – but according to the authors mistakenly – have been regarded as the epicenter of business model innovation within the TV-industry. The developments in Internet infrastructure have truly

been immense in the last decade. Nevertheless, we believe it has been a result of competition on connec- tion-speed between Internet service providers and not primarily on its ability to function as a distribution channel for TV-services.

Infrastructure developments in Norway are closely interlinked with global developments, which mean that global trends that yet have to reach Norway could cause infrastructure build-up in Norway as a precaution. An example of this is over-the-top services in the USA that have led to developments in CDN- solutions for television distribution. Even though similar OTT-solutions have just recently been intro- duced to the Norwegian market, the required technol- ogy has already been available. This is according to the authors not indicating that innovation in distribution methods is the main driving force behind the industry revolution, but rather that one trend may travel faster across borders than another due to for instance legal circumstances. This example is a case of geographical boundaries limiting American OTT-solutions from being used in Norway, and it takes longer time to build similarly good local services and negotiate the necessary rights than it takes to prepare the infrastruc- ture for the changes that are coming.

There is no doubt that the increased potential in the distribution channels functions as an enabler for creating a new business model in the industry, but the

authors believe it is mainly a necessary effect of the industry development rather than the cause.

Value proposition

The major developments we see in the television indus- try contribute to a completely new value proposition compared to that of traditional linear broadcasting. Consumers are no longer offered programmed televi- sion content where they have to adapt to a pre-planned schedule; new distribution methods and video-on- demand offerings enables customers to decide what they will watch, where they will watch it and at what time. This new era of television greatly improves cus- tomer convenience, and price points are also low com- pared to the traditional revenue models. Quality has on the contrary been reduced to adapt to the limita- tions of the Internet as a distribution channel: Both bit rate and quality-of-experience has had to be reduced as a consequence of congestions and bottlenecks across the Internet. Improvements in content delivery net- works and streaming technology are however driving the quality of over-the-top services closer to par with traditional broadcasting.

OTT video services have grown hugely popular in the USA over the last couple of years. Since Netflix launched their instant video streaming in 2007, and Hulu launched for the public in early 2008, their usage has been steadily increasing. These services are not available from Norway because of licensing limita- tions, but NRK, TV 2 and others have had success with OTT-services in Norway as well. While OTT- services from Norwegian content providers are mainly seen as a complement to traditional linear broadcast- ing today, the American services have begun to act as substitutes. Cord-cutting is a big issue for distributors in the USA, causing their traditional business model to lose customers to the new disruptive business models. Distributors in the US are in a rush to develop their own platforms to be able to compete on convenience with the OTT-services, and even though they are well positioned to compete with today’s OTT market lead- ers, distributors suffer from their slow reaction time.

The players in the Norwegian television indus- try are well aware of the problems their American counterparts face. This has caused everyone to rush developments of their own OTT-solutions in the Norwegian market. In contrast to the situation in the USA, no particular player in Norway has got a com- parable head start, but at the same time all the players fear that they will lose too much ground if they are left behind. Development cost for OTT-platforms are high, revenues are uncertain and it may cannibalize existing value offerings. One would think some of the players would try to stall the developments and milk their current market, but they are afraid of the long- term consequences if they do not keep on par with the development. The current situation in the US serves as a warning, and it is too expensive to buy back lost market shares. The authors see the immense develop- ments in the industry as defensive operations against an uncertain future.

Ultimately we view the epicenter of business model innovation in this industry as being offer-driv- en. It is a textbook example of low end disruption as described by Christensen and Raynor (2003). Distri- bution incumbent’s efforts to innovate their business models can be seen as a defensive move against low- end disruptors, which was identified as one potential strategic circumstance for innovation by Johnson. This is a response to the new entrant strategy of address- ing groups of over-served customers with a low price disruptive innovation (Johnson 2008).

7.2. A holistic business model centered

around the value proposition

The customer value proposition was just identified as the epicenter for engaging in business model innova- tion. Based on this we now propose a new value prop- osition, outline the activities necessary for aligning the business model accordingly and present the resulting business model.

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A value proposition that will