Two industries wiped out by creative destruction, two more in process of shrinking, and two nominations for next industries to get disrupted.
There is a lot of massive disruption from the technology revolution. That is going to continue. What are the threats in your industry and what opportunities might open up?
Consider the turmoil in these industries:
- Lots of people are cutting their cable connection.
- Phone lines too – over half of US homes don’t have a landline.
- Creative destruction: Video rental stores and chain bookstores as illustrations of how fast entire industries can be taken out.
- Nomination for next industry ready for disruption: Malls? Local real estate agents?
Two shirking industries
5/3/17 – Fast Company – Cord-cutting spikes fivefold in cable TV’s worst quarter ever – Tally of people who cut their cable connection increased by a factor of five in the first quarter of 2017 compared to 2016.
An accelerating number of folks are dumping cable and getting all their entertainment directly from the net. Seems like a person could get whatever entertainment desired from Amazon, Hulu, Netflix, specialized sports services, and dedicated on-line channels.
5/4/17 – Live Science – Hanging Up on Landlines: Most US Homes Are Now Cellphone-Only – Survey by CDC during last half of 2016 shows that 50.8% of US households do not have a landline. Those homes use cellphones only.
That is an increase of 2.8% from the previous year. Over half of houses now are without a landline.
Look at the cellphone-only percentages by various demographics:
- 71% – age bracket 25 to 34
- <25% – age 65 and over
- 71% – renting
- 41% – homeowners
Two industries wiped out.
5/30/17 – Fabius Maximus – The fast rise and fall of two industries show the coming singularity. Let’s prepare now. – Article uses the video rental industry and chain bookstores as illustrations of the fast creation and faster creative destruction of technology.
The point is we need to learn from those two industries that appeared and disappeared quickly in order to try to come to terms with the overwhelming change we are facing.
- 1977 – first release of movies into home video format
- 1985 – 15,000 independent video rental stores in existence and Blockbuster begins operation to consolidate the industry
- 2004 – Blockbuster has 9000 stores
- 2013 – Blockbuster shut down
That is 27 years from start of industry to a peak. A mere nine years from peak to bankruptcy.
- 1975 – Borders opened its first superstore
- 1998 – large portion of independent bookstores are gone
- 2004 – Borders is the second largest retail seller of books in the US with over 1200 stores worldwide
- 2011 – last of the Borders stores closed. I sure do miss them.
For Borders, that was 29 years from start to peak. Only took seven years from peak to gone.
Article says several other chains have closed. I’m only aware of one major chain still in business. I don’t know how they will survive, especially with their apparent current plan to thrive consisting of a push to sell vinyl records and games with lots of space devoted to discounted books.
So, what do we do with those tales of creative destruction? How do we apply that to our industry? How do we use that to prepare for the future?
I have no idea.
Awareness of the power of creative destruction is a first step, I suppose.
Nomination for next industries ready for disruption: malls? Local real estate agents?
6/1/17 – Los Angeles Times – Up to 25% of U.S. shopping malls may close in the next five years, report says – Credit Suisse forecasts that a quarter of shopping malls are headed towards closure over five years. As you would expect, some other analysts are quoted as saying the number will be a bit higher and others a bit lower.
Article has so many ads loading that the page crashed and I couldn’t read the rest of the article. It crashed just as I started reading comments that to survive malls will need to transition to heavy focus on food and entertainment, less on clothes and other retail outlets.
5/31/17 – Bloomberg – The Housing Market is Ripe for Tech Disruption – Real estate commissions are high and realtors are under a lot of price pressure.
Tech tools are freeing up a lot of the information that buyers have to get from agents now. Look at the information from Zillow. You could drive around a neighborhood with Zillow running and look for the houses for sale, their price, amenities, tax information, and actual prices of sold houses.
Author created two lists on Zillow, each with as close a match as possible to the house he wanted to sell. One was a list of houses that matched which had sold in the previous two years. The other list was of houses currently for sale that matched his. He picked a spot in the two lists where the prices matched and sold fast and near the price he listed. A few years ago that would have been impossible.
Extend that kind of info out five or ten years.