Short answer

Develop business models that embrace new distribution channels and evolving consumer preferences, rather than resisting them out of fear of cannibalization.

Field: Innovation & Markets
Source: Duo Research Archive (University of Oslo) (2011)
Method: Business Model Analysis
Evidence: Strong effect

Traditional television distributors face significant disruption from internet-based distribution and changing consumer habits, necessitating a proactive shift in their business models to avoid market share erosion. This innovation & markets research insight is drawn from a 2011 study published in Duo Research Archive (University of Oslo). Using Business model analysis, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Develop business models that embrace new distribution channels and evolving consumer preferences, rather than resisting them out of fear of cannibalization.

Study

Innovation & MarketsHigh ImpactStrong effect

Incumbents Must Proactively Adapt Business Models to Internet-Driven TV Consumption Shifts

Duo Research Archive (University of Oslo) · 2011

Key Findings

01The internet presents a significant long-term challenge to traditional TV distribution incumbents.
02New Over-The-Top (OTT) services offer convenience and lower prices, attracting consumers and eroding market share from incumbents.
03Changing consumer behavior favors on-demand content consumption across multiple devices.
04Incumbents are hesitant to adopt new models due to fear of cannibalizing existing revenue streams.
05A proactive, holistic business model approach is required, rather than reactive responses to technological change.

Application

Design takeaway

Develop business models that embrace new distribution channels and evolving consumer preferences, rather than resisting them out of fear of cannibalization.

How to apply

Analyze your current business model's vulnerabilities to emerging distribution channels and consumer behavior shifts. Explore hybrid models that leverage existing strengths while incorporating new digital strategies.

Project actions

01When researching a product or service, consider not just its features but also the business model that supports it.
02Think about how new technologies might disrupt existing markets and how companies can adapt.

Method & Evidence

AimHow should incumbent television distributors in the Norwegian market adapt their business models to address the challenges and opportunities presented by internet-based content distribution?

MethodBusiness Model Analysis

ProcedureThe research analyzed the Norwegian television industry, identifying challenges posed by internet distribution (e.g., infrastructure strain, competition from OTT services, changing consumer behavior) and proposing strategic business model adjustments for incumbent distributors.

ContextTelevision industry, Norway

Variables

IV["Internet distribution of TV content","Emergence of OTT services"]

DV["Business model of incumbent distributors","Market share of incumbent distributors","Consumer behavior"]

CV["Norwegian television market characteristics"]

Strengths & Limitations

Strengths

+Addresses a timely and relevant industry disruption.
+Focuses on strategic business model implications rather than just technological features.

Limitations

The specific market context (Norway) might limit the direct applicability of findings to other regions without further adaptation.

Reliability & validity

The study's validity relies on the depth of its business model analysis and its understanding of market dynamics. Reliability would depend on the consistency of the analytical framework used across different aspects of the industry.

Think critically

To what extent does the fear of cannibalization justify inaction in the face of significant market disruption?

Design Principles

"Embrace disruptive technologies by integrating them into evolving business models to ensure long-term viability and market leadership."

Understanding how new distribution channels like the internet fundamentally alter market dynamics is crucial for established businesses. Ignoring these shifts can lead to obsolescence, while proactive adaptation can unlock new revenue streams and maintain relevance.

What This Means for Your Design

If you're selling something, and a new way to sell it or a new competitor pops up that people like better, you can't just ignore it. You have to figure out how to change your own business to keep up, even if it means changing how you make money now.

How to use in your project

1.Use this research to justify the need for a new business model or strategy in your design project, especially if it involves digital transformation or market disruption.

Add to My Project

Quick Cite

Paragraph starter

This research highlights the critical need for incumbent businesses to proactively adapt their business models in response to technological shifts, such as the internet's impact on television distribution. The study found that fear of cannibalizing existing revenue streams often leads to reactive strategies, which are insufficient against emerging competitors and changing consumer preferences for on-demand content and multi-device accessibility. Therefore, a holistic and forward-thinking business model approach is essential for long-term survival and market relevance.

Source

Duo Research Archive (University of Oslo)

Ubiquitous TV: A Business Model Perspective on the Norwegian Television Industry

journal · 2011

View source

Questions About This Research

What does the research say about incumbents must proactively adapt business models to internet-driven tv consumption shifts?: Develop business models that embrace new distribution channels and evolving consumer preferences, rather than resisting them out of fear of cannibalization. Evidence: Duo Research Archive (University of Oslo) (2011).
Why does "Incumbents Must Proactively Adapt Business Models to Internet-Driven TV Consumption Shifts" matter for design?: Understanding how new distribution channels like the internet fundamentally alter market dynamics is crucial for established businesses. Ignoring these shifts can lead to obsolescence, while proactive adaptation can unlock new revenue streams and maintain relevance.
How can designers apply this research?: Develop business models that embrace new distribution channels and evolving consumer preferences, rather than resisting them out of fear of cannibalization.
What were the main findings?: The internet presents a significant long-term challenge to traditional TV distribution incumbents.. New Over-The-Top (OTT) services offer convenience and lower prices, attracting consumers and eroding market share from incumbents.. Changing consumer behavior favors on-demand content consumption across multiple devices.. Incumbents are hesitant to adopt new models due to fear of cannibalizing existing revenue streams.
What research method was used?: Business Model Analysis.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2011 journal from Duo Research Archive (University of Oslo).
What should I do differently in my next project?: Analyze your current business model's vulnerabilities to emerging distribution channels and consumer behavior shifts. Explore hybrid models that leverage existing strengths while incorporating new digital strategies.
What are the limitations?: The study is specific to the Norwegian market and may not fully capture global trends or the nuances of all potential business model adaptations.