The Rise and rise of the platform business
Over the past few months, motoring show Top Gear found itself in the eye of a social media storm, ending in the firing of its controversial host, Jeremy Clarkson, and the walk-out of his team.
Shortly afterwards, Amazon reunited Clarkson and co in a widely discussed and by all accounts very expensive new motoring show on its Prime video streaming service.
But while people were heatedly debating Clarkson’s fitness for TV, the wisdom of his sacking by the BBC and his lucrative new contract, I feel the real story is something else entirely — that of the rise and rise of platform businesses.
Amazon’s Internet-only video-on-demand (VOD) platform and others like it (notably Netflix) are making headlines that should have traditional broadcast TV moguls sitting up and taking note.
Both have in the last few years invested in creating bespoke TV shows, winning awards with Netflix’s “House of Cards” and “Orange is the New Black”, and Amazon Prime’s “Transparent.”
Backed by giants, VOD is the future of TV, heralding the rise of the user-centric streaming TV platform and the demise of the product-centric broadcast TV model.
Of course Amazon snapped up Clarkson and his buddies.
In South Africa, too, we see the streaming TV battle playing out, to the same tune. Already, several local South African VOD offerings are entering the fray to capitalise on the dwindling customer base of traditional TV and the enablement of digital technology platforms in this industry.
The new set notably includes Multichoice, the broadcast pay TV king. With a dominant hold over the local market, Multichoice understands how to ward off competitive threats. And let’s face it; old business models are crumbling and globalisation is out to eat local companies’ lunch. Maybe not yet, maybe not all of it, but global competition is falling into place, piece by puzzle piece. Netflix already has a loyal following in our own backyard — even if it isn’t, strictly speaking, available locally.
Will Multichoice and others like it work? That depends on many factors outside the scope of this article. In the end, platform provides a ticket to the game; the difference will be in locally-relevant content offerings that can hold their own against foreign intrusion.
The point is, betting the farm on a digital platform is a wise choice.
- Platforms help businesses — most notably content businesses like Nasper’sShowMax — scale globally and cost-effectively.
- Platforms are also the next evolution of product-centric business models; companies can use them to unlock extra “networked” value out of their products.
- Then there are collaborative platforms that can enlist the wisdom of crowds to gather insights and innovate more effectively.
The common denominator of product-, process- or innovation platforms is in connecting different aspects of the business — whether they are siloed functions, external communities, consumers, or emerging in-the-field capabilities (IoT).
Cloud-based platforms provide the glue of the “we-economy” in which everything and everyone is connected. It’s the network effect. A product- or function-centric organisation is not getting all possible value out of its offering or structure unless it connects customers or partners to help it enter the next level of loyalty- or innovation-based competition.
And any business can be a platform business; I’ve spoken about it before. To quote: “Rapid advances in cloud, mobility and application development are eliminating the cost and technology barriers associated with platforms, opening up this playing field to enterprises across industries and geographies — big or small, established or new, tech or non-tech.”
Platform thinking provides the scale, catalogue and networked power to punch out of the isolationist mentality. How will you apply it in your business?
As always, I would love to hear your thoughts on this article.