1. What is the Difference Between…
Sustaining Innovation
and
Disruptive Innovation

2. Sustaining Innovation
• “Doing it Better”
• Way For Products to Change
• Does Not Create New Growth

3. Disruptive Innovation
PS3 vs. Wii• “Playing the Game
Differently”
• Creates a New Market
• Transforms or
Destroys Current
Market
• Products Become
▫ Simpler
▫ More Affordable
▫ More Accessible
▫ Customizable
• Drives Growth

4. Technology is Going to Advance and
There is No Stopping it, Even if it
Ruins an Industry…

5. …The Good News is That it Often
Creates a New Industry

6. Companies Either Get on Board…

7. …Or Get Left Behind

8. The Technology Industry

9. VOIP
• 35% of Businesses Use VoIP
• Allows For One Phone Line
• Avoids Long Distance Charges

10. Communication
• Post Office to Today
• Communication Forms are
Merging
• Mobile Computing Could Replace
Desktops and Notebooks

11. Music Industry’s Current State
• Lower Profit Margins
• Whatever song you want, whenever you want

12. New Music Industry Business Models
• Subscription Services
▫ Pandora, Spotify, Grooveshark
• Digital Download Services
▫ Apple iTunes, Amazon MP3
• Partnering With Tech Companies
▫ EMI and Warner
• Online Album Promotions
▫ The Killers

13. Ethical Questions
• Difference Between Downloading Free Music
Versus Listening to Music for Free Over the
Radio or Internet?
• Is Downloading Free Music Unethical?

14. Name That
Disruptive
Technology!

16. Disruptive Innovation
• Helps Create New Markets
• Disrupts an Existing Market and Value Network
▫ Can Take a Few Years or Even Decades
• Displaces an Earlier Technology
• Unpredictable
• Designed for a Different Set of Consumers in a
New Market
• Lowers Prices in Existing Market

17. AKA Creative Destruction
• Leads to Paradigm Shifts
▫ A Change in the Basic Assumptions or System
Conditions
▫ Permanently Disrupting the Framework
• The Idea of Punctuated Equilibrium With the
Emergence of New Eras

18. Where There is Risk, There is Reward

19. The S-Curve

20. The Future of Hollywood
• Digital Content
• Netflix and Hulu Plus are
Looking at Original Content
• Consumers are Willing to Pay
for Access to Content
• Ticket Sales have fallen 200
million since 2002

21. Early Adoption Risks
• Picking the Wrong Technology
▫ HD-DVD vs. Blu-ray
• Not Following Real Consumer Trends
▫ GM’s Hummer
• Further Technological Innovation

22. Late Adopters
Kodak Hasbro

23. Major Success Stories
Google Apple
• Apps
• beta releases
• Adwords
• Reinvention
• iPod
• iPhone
• iPad

24. “You don’t know when the transition
period will start. The idea is to
understand that it will…
and become prepared for it.”
-Dr. Timothy Bishop
Future Studies, University of Houston

25. Sources
• http://clients.ibisworld.com/industryus/Majorcompanie
s.aspx?indid=894
• http://www.ksla.com/Global/story.asp?S=12533107
• http://nymag.com/nymetro/news/media/columns/med
ialife/6099/
• http://www.theregister.co.uk/2010/03/08/npd_home_
streaming/
• http://www.fool.com/investing/general/2012/06/18/str
eaming-music-will-make-your-ears-and-pockets-r.aspx
• http://www.hollywoodreporter.com/news/music-film-
industries-average-lowest-
167422?utm_source=feedburner&utm_medium=feed&u
tm_campaign=Feed%3A+thr%2Fnews+%28The+Holly
wood+Reporter+-+Top+Stories%29
• http://articles.businessinsider.com/2011-02-
18/tech/30052663_1_riaa-music-industry-cd-era

26. Sources cont.
• http://www.zdnet.com/blog/storage/when-will-the-ipad-
replace-desktops/1631
• http://voipstrategy.com/University/VoIP_Benefits.aspx.html
• http://voipstrategy.com/University/VoIP_Benefits.aspx.html
• http://www.lightreading.com/document.asp?doc_id=190826
• http://www.macworld.com/article/1157817/tv_movie_future
.html
• http://www.washingtonpost.com/wp-
dyn/content/article/2005/11/11/AR2005111101644_2.html
• http://myventurepad.com/jeffweinberger/91147/apple%E2%
80%99s-plight-will-disruptive-innovation-make-it-winner
• http://www.the-numbers.com/market/