Sunday, November 13, 2011

The Real Heavy D

I don’t know much about Heavy D the performer. This isn’t about him.  The D I am referring to here is Disruption. The heavy refers to impact.

Websters Dictionary defines disrupt as:
transitive verb
A : to break apart
B : to throw into disorder
C : to interrupt the normal course or unity of

Heavy D as I am intending to use it here implies: ‘D’ all of the above and then some.

Disruption is a natural and regularly occurring phenomena  throughout nature and the technological world that begins much like the butterfly effect. It begins in the details. It begins in the components. It begins in the architecture. If you want to know what the next technology disruption will be start reading up on chip design and become familiar with Gordon E. Moore. Specifically get to know the details of technology and learn about production time lines.

In technological environments, Moore’s Law dominates and its dominion is over far more than silicon wafflers and hard drives and since we are now a technologically based society that law impacts almost every level of our life and lifestyles. Mr Moore’s observation about the cost and efficiencies of transistor usage has become the underlying tempo of today’s business cycle. It is the fundamental force of every technological bubble and it has accelerated, into warp speed, the rates of adoption and obsolescence of our hardware(s), behaviors and consumptions.

Now back to Heavy D the musician for a moment.

Heavy D & the Boyz were the first group signed to Uptown Records; their debut, Living Large, was released in 1987. The same year apple released the Platinum Apple IIe with built-in keypad ($829). 25 year later, through a series of disruptions apple would be the dominant force in the music business taking 30% of every Heavy D track it sold. 
Every aspect of this radical shift can be traced back to the disruptions cause by component level advances. The fact that it took nearly 25 years can be related to the underlying production time lines and the planned obsolence of the resulting products, typically 3 to 5 years. The resulting disruption of the music business can be viewed a series of waves that shifted distribution and consumption away from existing modalities into new pathways and habits. 

Case in point, is the use of audio CD ROMS, an extension of disk storage technology.  Sony first publicly demonstrated an optical digital audio disc in September 1976. Two year later, In September 1978 they demonstrated an optical digital audio disc with a 150 minute playing time. Technical details of Sony's digital audio disc were presented during the 62nd AES Convention, held on March 13–16, 1979. CD-ROM became became commercially available in 1982. A 5 year cycle from proof of technology to active product in the market with standardized specifications all major music interests had agreed to.

The resulting disruption meant that record stores had to redesign their display cases to accommodate the new product packaging. New features were added to the experience of buying and consuming music, the CD-Plus, which was by-in-large a failure and older technologies were casts aside, the analogue tape based Walkman.

Deep within the wave of this disruption was the whisperings of the next tsunami. the MP3. In 1987, the prestigious Fraunhofer Institut Integrierte Schaltungen research center (part of Fraunhofer Gesellschaft) began researching high quality, low bit-rate audio coding, a project named EUREKA project EU147, Digital Audio Broadcasting (DAB). (source)  Over the next 12 years MP3 would emerge as a stand alone technology that would replace it’s predecessor. The first MP3 player appeared in 1999.

Basic compute requires two things, a processor and storage. Being able to store what is being computed has always been a key component of the success of technology products. More storage means you can compute more things. The approach to solving the problem of storage has always involved using compression software. Codecs like Quicktime, and MP3 were developed to condense the file size of the data associated with image and audio files. yet again, within the MP3 wave of disruption, the seeds of the next disruption lay. In 1999 Shawn Fanning and his uncle John Fanning invent Napster an peer-to-peer file sharing network and we all know what happened after that.

As referred to in the movie “Social Network” in October of 2006, the Tower Records chain of stores, in bankruptcy, was bought for $134 million by a liquidation specialist, which closed all of the stores (including the famous flagship Tower Records store on Sunset) and liquidated the inventory. After 46 years in business, Tower Records was no more.

So why do I care so much about disruption? Well the business we have created is based on disruption. One of our fundamental premises is that as fell the music business, so falls the traditional publishing business. But its more than just publishing. It is all of the connected behaviors and consumption patterns connected to the traditional publishing model. It’s not enough to consider the tsunami that is the wave of disruption, you have to look at the landmass its colliding with. Consumers did not stop listening to or buying music but the way they did so was fundamentally changed.

As I have said before, over the last year we’ve developed a platform for producing digital books as apps. The disruption to the tradition publishing model is real and it is going to happen in half the time or less than what occurred in the music business. Moore’s Law dominates. Within 10 years, how we enjoy and consume books will be completely transformed. This doesn’t mean paper books are going to become extinct, they are just not going to be the dominant platform of distribution. We believe we can ride this wave into areas of opportunity and provide new and meaningful content to people who have traditionally enjoyed paper based books.

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