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HBO and CBS Show Distributors What Happens When You Stop Innovating

The distribution of television programming is about to change forever.  Now is the time to think about changing the way you distribute your electrical products before someone else does it first.

By Scott Costa, publisher, tED magazine

I have personally written a number of stories on innovation.  www.tedmag.com has posted dozens of them on a regular basis.  tED magazine has printed a story on innovation in nearly every issue in 2014.

And finally, something interesting happened that really allowed me to see what happens when you fail to innovate on the delivery of your products, or you fail to lead your team or company into the future.

You may have heard last week that HBO and CBS are “cutting the cord” with cable and satellite TV providers and will begin offering Internet based programming of their networks.  While Netflix already offers movies and TV shows, what HBO and CBS are doing is different. In the past, the cable and satellite TV providers held exclusivity on how you could receive those channels. Now, HBO and CBS will control their own broadcasting fate, without the need to be a part of a “bundle” package currently offered.

Back in 2010, Time Warner CEO Jeff Bewkes told the New York Times that innovative ways to watch television like Netflix is “a little bit like, ‘is the Albanian Army going to take over the world?’ I don’t think so.” In 2013 he repeated those comments, adding that his view of Internet viewing of television remains the same.

Not any more.

DePauw University professor of communication Jeff McCall told Yahoo News, “It’s not far down the road when no one will have cable television in their home any more but rather will have all programming through the Internet. The days when we had to get programming through TV over the air, satellite, or cable are gone. The old media will have to adapt very fast or be left in the dust.”

Dirk Beveridge of UnLeashWD has seen the need for innovation in distribution for years.  He just released his first book, “Innovate!” which is published by the National Association of Wholesaler-Distributors.  He says it doesn’t matter if you are distributing television products or electrical products, you can’t get caught being the last one to innovate.  Beveridge compares the cable TV situation to a section of his book where he explains the burning platform.  “Traditional broadcasting was a cash cow that allowed the cable companies to make a lot of money for a long time,” Beveridge says.  “But, somewhere along the line, this programming was going to be delivered through another medium. In this case, the cable companies did not look ahead when times were very good.  That would be the core situation that we can all learn from.  Don’t wait until the platform is hot enough that your only alternative is to jump into the unknown.”

Beveridge goes on to say Time Warner Cable hired a PR company to look at the potential for its subscribers to jump to the Internet to get their TV programs.  But the PR company only talked with three people who left cable for the Internet, and all three said they wanted to come back to cable.  Time Warner took that very small sample and used it to do no innovating for the future.

“They found three people to shore up their own opinions,” Beveridge told me.  “And then they took no action.”

Beveridge did add that he believes this current plan by HBO and CBS may not be perfect, but he believes the two networks will continue to make changes.  “Will this model work?  No one knows.  But they peered into the future, believed this is inevitable, and are now experimenting while they have the capabilities and resources to do that.  This will not be the exact model for five years from now, but they will learn from this and make the necessary changes.”

Beveridge also gave me four mistakes companies make that will slow down innovation, and potentially put them in a position to be last to innovate. 

  1. Ignore new technology and trends and hope it would go away.  Hoping is not a strategy.  E-commerce is inevitable.
  2. Deride new solutions with various justifications. 
  3. Try to prolong the life of your current solution, and as a result will be taken over by innovation
  4. Let the emotional attachment of yesterday’s experiences prevent experimentation.
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