Clayton Christensen + Imagine Dragons
Disruptive innovation in the live concert industry.
I could be wrong, but I’m guessing the Oxford-educated, Rhodes Scholar, Harvard Business School professor, and best-selling author Clayton Christensen hasn’t been to an Imagine Dragons concert. Sure, Christensen is Mormon and so are two members of Imagine Dragons, and three members of the band met each other in Boston, the place Christensen has long called “home”, but if their paths have crossed in any other way it’s not immediately obvious. But if Christensen were to catch a show, what conclusions might he draw from it in terms of disruptive innovation in the music industry, specifically applied to live concerts?
Christensen’s theory of disruptive innovation states, in a nutshell, that small players can take down large ones by focusing on non-consumption and then moving upstream. The larger competitors are taken completely off-guard because they don’t see the small guy as a threat. In fact, they may even partner with and help him, because he helps them get rid of small ticket, low margin business they consider a distraction.
To help us understand his theory, Christensen often talks about “jobs to be done.” When someone buys a milkshake at McDonalds on the way to work, they might say they are doing this because they want a milkshake, but the milkshake is only a means to an end. The real job the milkshake does is it gives them a convenient way to eat breakfast while driving.
Where non-consumption comes in is that the milkshake can’t compete against a healthful breakfast that takes a half hour to prepare and a half hour to eat. If I have time to make and eat a nice, organic, fresh omelet with a green smoothie and that’s the kind of food and experience I prefer each morning, I’m not going to suddenly replace that with a McDonalds milkshake. Unless I lose my job, am forced to take on two jobs to replace it, and therefore am getting to bed at midnight and getting up at 5 am in order to get to a 6 am job. Suddenly my choices are “no breakfast” or a McDonalds milkshake. If my choice is to not eat anything or have the milkshake, I might conclude the milkshake is the better alternative.
How does this apply to Imagine Dragons and the live concert industry?
In the case of a live concert there are multiple “jobs to be done”. The band wants to get a message across, inspire their fans, and perhaps make some money while at it. Fans want to be inspired, feel connected, enjoy music and the show, and have a brush with celebrity. Venues want to make money. Labels want to make money.
Non-consumption is massive when it comes to live, in-person music. The band can only exist physically in one place at a time and there are only 365 nights in a year. Imagine Dragons could probably get booked to play 1,000 shows a year, except that it’s a physical impossibility. As it is frontman Dan Reynolds had to have a polyp removed from a vocal chord due to overuse.
But what would happen if, instead of showing up to do a live show, Imagine Dragons broadcast a live show to 500 music venues around the world, all at once? I know, I know. Purists would point out that a live, in-person show is an entirely different experience than seeing someone on a screen, no matter how big and high-def the screen and no matter the quality of the speakers. And the audience can’t interact with the performer. Reynolds can’t look out at the crowd and point or wave at someone, which means a fan can’t be waved to or pointed at. I agree completely—there is absolutely no way a non-in-person, live event can compare to an in-person, live event. But remember, we’re not trying to make the two compete. We’re talking about non-consumption. The people who would be attending an Imagine Dragons show broadcast to a venue aren’t the people who have the option of attending an in-person, live show, they’re the people for whom the choice is the broadcast live show, or no show at all. It’s the 14-year old kid who lives three hours from any major city in the US, and whose parents aren’t about to drive him into town for a show that starts at 9 pm. Or the guy in Kenya who lives 30 hours by bus from anywhere the Imagine Dragons will ever tour.
If you want to take it a step further, you could cut out the venue entirely and go straight to the Internet. Granted, perhaps someone isn’t going to pay $50USD to watch a concert online, but will they pay $1? Maybe that’s still profitable. And many of the jobs still get done. The band is able to reach and inspire, and make money. The fans are able to be inspired. Perhaps not as well as in person, but still better than with no show at all. Creative venue owners would be able to find ways to enhance the experience to make a broadcast worth attending and better than watching it at home on your laptop.
Of course I’m not the first guy to think of this. ConcertWindow, Vevo, ConcertTV, and others are already providing this innovation. Others have addressed the topic in one way or another. The idea might even go as far back as Mark Cuban’s Broadcast.com, the now-defunct company that made him a billionaire when he sold it to Yahoo! for $5.7B.
The question is where it’s all going. With Christensen’s model the innovative disruption often improves its quality over time and eventually entirely or almost entirely displaces the larger, more entrenched competitor. Think about personal audio devices (first the Walkman, now mp3 players and smartphones) vs. large stereo systems, personal computers vs. minicomputers, and digital cameras vs. film cameras. Will online live events lead to the end of the live, in-person concert? Or might they introduce non-consumers to a new experience they’ve considered before and fuel explosive demand for “the real thing?” Inexpensive mp3 players do indeed compete against high end stereo systems, but mp3 players also grow the entire market of music aficianados. While mp3 players might dominate, they don’t seem to have hurt sales of premium audio systems. For the sake of Reynolds’ vocal chords perhaps Imagine Dragons should ignore the opportunity disruption offers.