A historical examination of disruptive innovation management in the global media & entertainment industry

Date
2012-03
Authors
Pieterse, Petrus Jacobus
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: "The goal of university research is the creation, dissemination, and preservation of knowledge." – Steven E. Hyman, Provost of Harvard University 2001–2011 The Department of Trade and Industry recently identified the media and entertainment industry as a strategic sector in South Africa because of its growing contribution to economic development through both local and foreign investments, export opportunities and job creation potential, as well as the significant spill-over possibilities in industries like tourism and retail usually associated with emergent industries. However, deficient research and development has been identified as one of the notable constraints to ensuring sustainability and competitiveness of local cultural industries, in which annual expenditure currently amounts to R100 billion. This emergent nature of South Africa’s cultural industries, their strategic importance as part of South Africa’s growth path as dictated by the government and the current dearth of academic literature concerning entertainment technology innovations instigated a three-tiered research objective: First, to determine whether this industry is a legitimate subject for engineering management study by examining its technology-foundation; second, to examine the impact which technological change has historically had on the industry, building on theories by Meza (2007) and Burgelman and Grove (2007); and thirdly, to provide an analysis of the global trend of contention and convergence between content creators and technology companies. Integrating these objectives into one deliverable, the ultimate aim of this study is to establish a synthesised knowledge base on the media and entertainment industry for the Department of Industrial Engineering with specific emphasis on the intersection between technological innovation and business model innovation. A hybrid multiple-case study research approach is utilised to answer eight research questions which contribute to this research goal. Four notable insights gained from answering these are (1) entertainment companies have historically reacted to technological change in a very particular manner, reducible to a four-phase process: invention, ascension, contention and sensation – referring to the observation that incumbent organisations’ response to disruptive innovations is usually one of trepidation, a reaction which leads to legal battles and subsequent contention between technology and media content companies yet simultaneously providing opportunity for inter- and intra-industry convergence and for new business models to be developed; (2) cross-boundary disruptors are those organisations which have the capability of influencing not only inter-industry organisations but also how business is conducted in entirely-different industries; (3) industry effects account for more than 60% of profit variance in the Entertainment and Lodging economic sector, justifying a study of entertainment companies from an industry perspective; and (4) because of digitalisation, the Internet, exponentially increasing computing power and the proliferation of networking capabilities, the media and entertainment industry is transitioning from a business model which is based on media-directed “push” relationships, fragmented audiences and the provision of passive consumption to one which provides ubiquitous immersive experiences, multi-device operability and value-based content which may be customised to consumer requirements. As Porter (2008b) suggests, a historical analysis may prove to be not only informative but also instructive. The synthesised knowledge base and deductions made from this historical examination of disruptive innovation management in the media and entertainment industry may consequently be used as a basis for future research, for which a few possibilities are offered.
AFRIKAANSE OPSOMMING: "Ons sal nie ophou verken nie, en die einde van al ons verkenning sal wees om te arriveer waar ons begin het maar om dan die plek vir die eerste keer te verstaan." — T. S. Eliot Die media- en vermaaklikheidsbedryf is onlangs deur die Departement van Handel en Nywerheid geïdentifiseer as 'n strategiese sektor in Suid-Afrika as gevolg van die groeiende bydrae wat hierdie industrie lewer tot ekonomiese ontwikkeling deur middle van plaaslike en buitelandse beleggings, uitvoergeleenthede en werkskeppingpotensiaal. Hierdie industrie beskik ook oor beduidende oorloopmoontlikhede in bedrywe soos toerisme en kleinhandel. Gebrekkige navorsing en ontwikkeling is egter geïdentifiseer as een van die vernaamste beperkings tot volhoubaarheid en mededingendheid van plaaslike kulturele industrieë, `n bedryf waarin jaarlikse besteding reeds R100 biljoen beloop. Die kombinasie van hierdie ontluikende aard van Suid-Afrika se kulturele industrieë, hul strategiese belangrikheid as deel van Suid-Afrika se Industriele Aksieplan en die gebrekkige akademiese literatuur met betrekking tot vermaaklikheidstegnologië het gelei tot 'n drie-ledige navorsingsdoelwit: Eerstens, om vas te stel of hierdie bedryf 'n legitieme akademiese onderwerp vir die ingenieursbestuur-dissipline is deur die aard en tegnologie-fondasie van die industrie te bestudeer; tweedens, om die impak wat tegnologiese verandering histories op die bedryf gehad het te ondersoek, met Meza (2007) en Burgelman en Grove (2007) se teorieë as fondasietekste; en derdens, om 'n analise te verskaf omtrent die wêreldwye mededinging en konvergensie tussen inhoudverskaffers en tegnologie-maatskappye. Geïntegreerd in een aflewerbare is die uiteindelike doel van hierdie studie om ‘n saamgestelde kennisbasis aangaande die media- en die vermaaklikheidsbedryf vir die Departement Bedryfsingenieurswese te lewer, met spesifieke klem op die ontmoetingspunt tussen tegnologiese innovasie en die innovasie van besigheidsmodelle. 'n Hibriede meervoudige-gevallestudie navorsingsbenadering is aangewend om uiteindelik agt navorsingsvrae te beantwoord. Hierdie vrae het gedien as riglyne om die doel van die tesis te bereik. Vier noemenswaardige insigte wat uit die beantwoording van hierdie vrae gekom het is (1) die vermaaklikheidsbedryf het histories op `n besondere wyse gereageer op 'n tegnologiese verandering, een wat gereduseer kan word tot 'n vier-fase proses: uitvinding, aanvaarding, mededinging en sensasie. Hierdie proses verwys na die waarneming dat bestaande organisasies aanvanklik met angs reageer tot ontwrigtende innovasies, 'n reaksie wat lei tot wetlike gevegte en daaropvolgende twis tussen tegnologie maatskappye en inhoudverskaffers, maar tegelykertyd geleentheid bied vir inter- en intra-industrie konvergensie sowel as vir die ontwikkeling van nuwe sake-modelle; (2) ontwrigtende innovasies bied geleentheid vir kruis-grens ontwrigters om die manier te beïnvloed wat ander organisasies, insluitende diegene in geheel-verskillende industrieë, besigheid doen (3) bedryfsfaktore is verantwoordelik vir meer as 60% van winsvariansie in die vermaaklikheidsbedryf, `n waarneming wat 'n studie van vermaaklikheidsbedryf vanuit 'n industrie-perspektief regverdig, en (4) digitalisering, die Internet, eksponensieel-groeiende berekeningspoed en die vermenigvuldiging van netwerke het veroorsaak dat die media- en vermaaklikheidsbedryf `n besigheidsmodelaanpassing moes ondergaan vanaf een wat gebaseer is op media-gerigte "stoot" verhoudings, gefragmenteerde gehore en die verskaffing van passiewe verbruik na een waar aanpasbare, waarde-gebaseerde inhoud alomteenwoordig beskikbaar is en verbruik kan word op veelvuldige toestelle volgens verbruikers se behoeftes. Porter (2008b) noem dat 'n maatskappy se geskiedenis nie slegs informatief is nie, maar selfs ook voorskriftelik. Gevolglik kan die afleidings wat gemaak is uit hierdie historiese ondersoek aangaande ontwrigtende innovasies in die media- en vermaaklikheidsindustrie gebruik word as `n fondasie vir toekomstige navorsing –`n paar aanbevelings hiervoor word in die gevolgtrekking van hierdie dokument gelys.
Description
Thesis (MScEng)--Stellenbosch University, 2012.
Keywords
Disruptive innovations, Global entertainment industry, Dissertations -- Industrial engineering, Theses -- Industrial engineering, Business model innovation
Citation