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The changing information business
Nikhilesh Dbolakia Ruby Roy Dholakia
The Changing Information Business Toward Content-Based and Service-Based Competition
As information-related industries creep into each other's territory and create hybrid "info-tainment" business groups, traditional routes to competitiveness become scarce. Attention is shifting toward content and service-based ways of competing, as postmodern [orces sweep aside conventional ways o[ developing and delivering content. The Dbolakias examine both the shift in the basis of competit~n in the information business and in information creation.
Information to define
technology
the economic
developed
world
a regionally
has come
today. It is not merely
dominant
technology
the way that steelmaking Pittsburgh
dominated emergence
Manchester. The of information technology
or textiles
ways of developing content. Therefore maintaining
of the
age. The known
as
are the emergent behind successful
and technologies
out in a number
of indus-
directly create, move, store, and display information-the view of the Information a colossal
marketing at the University of Rhode
that is, information
activities
Island. Ruby Roy Dholakia is professor of marketing and director of the
types of businesses,
reveals
Research Institute for Telecommun-
the entire global economy.
The authors gratefully acknowledge the research assistance of David J. Cordeiro, Neset Hikmet and Steve Messere. Funding for this paper was received from RITIM at the University of Rhode Island.
Summer I995
sector
sector.
The broader
of the workers
half of half
in the industrialized
world are employed growing information value added
view, in all
Almost
by the rapidly industries. The
of information
products
and services to the U.S. GNP is greater than 45%, and for Europe and Japan more
than 4O%.r
In this article, of the information
information
classifying
business:
creation
the core industries
that create, move, process, store and display information. These include
on
strategies. Scheme are helpful
and analyzing
in
the Infor-
mation Business. These are the forms of information, and the functions relating shows
to information.2
Chart
the classification
Information
Business
scheme
1 for
employing
these
two dimensions. The basic forms of information comprehensible by the human
senses-text,
graphics,
audio
and data-date back to the earliest civilizations. More sophisticated forms
of information-photographic
images, we examine
What
Our focus concentrates
Two basic dimensions is
a business
that in size approaches
businesses?
compete
change?
strategic patterns information
A Classification
process, narrow
Business-it
Nikhilesh Dholakia is professor of
Lawrence Erlbaum Associates, 1995).
will occupy
How can businesses
in this era of real-time
of
mation Business. If we take into account only those enterprises that
(Hillsdale, NJ:
user appeal
stage of the information
business.
business.
and application
products
are carried
Side Perspectives
and delivering developing and
We shall also address the competitive restructuring of the information
the industrial
tries. Together they constitute what is known in popular terms as the Infor-
book New Info-tainment in the Home: Demand-
and
that spawned
information
forthcoming Technologies
to those
and service-based;
the center
The creation
Island. The authors are co-editors, with Norbert Mundorf; of the
from those that
are cost and technology-based
plough that symbolized the rise of agrarian society, or to the steam engine contemporary era is rightly the Information Age.
ications and Information Marketing (RITIM} at the University of Rhode
of the information
2) that this change is occurring as postmodern forces replace traditional
once
to the invention
drivers
are changing
that are content
in
dominated
is parallel
competitive business
core of the
appeared centuries.
moving
pictures
and video-
only in the past two
The activities
we associate
with
broad-
the Information Business Grid in Chart 1 are neither new, nor are they
casting, cable, movies, telecommunications, information services, computers and consumer and office electronics. These industries drive today’s information-based economy. Our central arguments are: 1) that the primary
necessarily technological. Throughout history, however, key technological developments have transformed the nature of these activities-especially the speed, capacity and accuracy of information
publishing,
photo-processing,
95
Creation
Transmission
Processing
Storage
Display
Text Author and Hypertext Graphics
‘:
alw
E-mail
:
Computers
Chips
High-Resolution Color Monitor
i xG4 :
Artist and CAD
:i..:&+&?4ngs1
Fax
Computer
Disks
Graph-
: :. _’:.
Color Printer
1 KS Data
k&d ,:
4kB?&Kkr2rS. Researchers and Sensors-Scanners
‘,.
1,:takucusatgm ‘.
~ Fi/e transfer 1
Computers
Magnetic
Tape
:uky~:y*yfdS
:,
Digital Radio
Computerized Recording Studio
-:,
::
Audio CD
1 Broadcast/Cable
/ Computerized
TV
Multimedia
,’
Concert-Quality Music Systems
:‘,
ers, Special Effects
y&ymwphamE . ,,, ,, -.:, .,. .:
~ t&$gQyj.
Video
1 Writers, Perform-
Laser Printer
I
Audio Musicians and
.,
: f&&k&&&&# ‘. ~~i&&~~ : i 1.,: ) 1 High-Definition
Digital Disks
1
Studio
I,
.
functions-and society.
thereby
the nature
With the enhancement
information
functions
in the forms
and availability
mation.
come changes
The Gutenberg
example, permitted
of infor-
Press, for
was a technology uniform
of
of the
display
that of textual
information for a mass market. Similarly, Jacquard’s punch-card driven looms programmable machines Babbage’s “analytical principles
96
established the basis of data-processing
to come,
and Charles
descriptions engine”
information.
The emergence
as an information
new forms
of video
to come. Video has added row to our information
a whole
new
grid. As
permits, new forms of will emerge (see box
“Hypermedia,
Telepresence
and
Beyond”). It is conceivable that a new form like Virtual Reality that is cutting-edge
the
commonplace
a decade
technological
innovation
today
will be
from now. As continues,
century
.,
grid of the 21st
will grow to include
many
novel cells. Following
of new forms yet
computer.
provided
of
form in the 20th
is a harbinger
economics information
the information
not only transforms it creates
regarded
of the
of the digital
Technology information,
century
: :
1 p&&@&&@e.
~ P~h:qrds’
logical century, erated.
the revolutionary
innovations
techno-
of the late 19th
the pace of change
accel-
By the 195Os, electronic
technologies had pervaded all aspects of the Information Business in the United States. in Information assisted
The sole exception was Creation. Although
by technologies
like the still
and the motion picture, and by electrical amplification of music, information
creation
The Columbia
retained
a quintes-
Journal of World Business
sential human character, remaining largely unchanged for centuries. Presently, electronic and digital technologies pervade all aspects of this business. Technology has started to creep into the final, human domain of information creation. Some fear that technology will destroy even the very humanism of the humanities,3 while others foresee possibilities of technoaided fiction, poetry, art and drama.4 Although these fears are now contested in the humanities and the social sciences, technology does enable creators of information to transcend the traditional limits of memory, speed, animation, verisimilitude and intensity of experience; it is likely to open up information worlds that lie beyond present-day experience.
Convergences and Crossovers Specific information industries have developed to occupy one or two functions in the information grid. The printing industry once dealt with the display of textual and graphical information; the photography business was concerned with the creation and display of lifelike two-dimensional graphic images; the radio and later television industries emerged for mass transmission of audio and video respectively. But as technological capabilities of these industries increased, and their primary markets matured, each diversified from the original focus. The data processing and data storage industry expanded into the processing and storage of text, graphics, images, and eventually audio and video. Similarly, the telecommunication industry
expanded from the transmission of audio to the transmission of all other types of information: text, graphics, data and video. By 1980, the information business structure comprised of a number of industries such as telecommunications and computers with deep vertical capabilities across information types, other industries such as consumer electronics and publishing with horizontal coverage, and finally some industries such as photography that remained closely anchored to their historical origination points. impact of Crossovers
The 1990s mark the beginning of the end of traditional components depicted in the information grid. After acquiring NCR, AT&T is now bringing products to the market that integrate
Hypermedia, Telepresence and Beyond Far from the dystopian visions of Huxley and Orwell, information technology has started blowing our way a fresh, wild breath of freedom. Some technologies, such as realityconquering video games, free the individual at least temporarily from the bounds of society while others, such as virtual-reality simulators and cyberspace connections, allow a measure of freedom over the laws of the real world. Hypermedia encompass the spheres of both hypertext and multimedia. Hypertext is computer-aided writing that facilitates non-linear reading. Like tiles in a kaleidoscopic mosaic, hypertext “links” allow the reader to organize a body of information to their own taste. Authors can no longer dictate the order in which their ideas are to be digested. Add 3-D animation, sound, and video components to this, and you have a combined movie studio and TV station editing room at your finger tips: hypermedia. In its most efficient form, multimedia allows a user to select the most appropriate set of sensory experiences to understand, or just feel, a concept. Telepresence goes beyond the power struggle between author and audience, to defy the laws of distance. E-mail,
Summer 1995
video-conferencing and remote file sharing make many of the constraints of space irrelevant. The Internet allows for an exchange of ideas among millions of individuals around the globe. Because messages are storable, the user is further freed from the constraint of choosing a common time as well. Video-conferencing and remote file sharing take the concept a step further by adding multimedia. In the future, Virtual Reality will combine all of these prior developments. This final step will allow the user to free themselves from the constraints of their own environment and their own identity. Through Virtual Reality the individual will be limited only by their own intellect in conveying and understanding information. -David
J. Cordeiro, Jr. and Nikhilesh
Dholakia
Source: Based on David Jay Bolter, Witing Space: The and the History of Writing, Hillsdale, NJ: Erlbaum, 1991; and Howard Rheingold, Virtual Community, Reading MA: Addison-Wesley, 1993. Computer, Hypertext,
97
computing
and communications
capabilities.
Software
are busy developing
boundaries
firms like Oracle supercomputers
in the information
grid
interactive
prowess, Deutsche Telekom brings a subscriber base of 14 million to this
Tracking
positioning
technology
service
of tomorrow
and Apple
become
a software
and consumer
electronics
may
businesses-skills
in this
area will mean the difference between successful strategies and strategic blunders.
firm. invading
turf that has brought logical crossovers. the result performance
are also
changing
characteristics
price/ of infor-
is going to develop
function of information creation. Many of the key players in the infor-
speculative
mation
is the
business
have realized
this and
“Ncgroponte Switch”-the controversial proposal by Nicholas
they have made or attempted appropriate strategic acquisitions of infor-
Negroponte
mation
of MIT’s AMedia Lab that
all voice communications wireless should
and fiber-optic
should
go
networks
communication bandwidth.’
that consume Supercomputers,
creation
European
firms. Japanese
cultural a lot of
imprints,
once
studios.
and
the world’s has started
of pubIished
largest software amassing
a
text, audio and
in the hope
of
has been a master
of the
acquisitions strategy for a long time and has been acquiring rights to medieval, modern, American and international fantasies from its very beginning
as an entertainment
company.
With studio
labels like
Touchstone Pictures, Hollywood, and Miramax, the movie-making side of
firms have made acquisi-
tions of some “classic
be used for multimedia
Microsoft,
Disney
into a
mation technologies. One such crossover that has received a lot of attention
and Kirch adds German
becoming a leading information provider to the world.
The building of sustainable competitive advantages in the information business
publishing
broadcasting rights to 50,000 hours of video programming. In addition,
video properties
techno-
Crossovers
of rapidly
venture
library
The Race to Create or Perish
each other’s
about
to Bertelsmann’s
producer,
It is not just firms such as AT&T, IBM and Microsoft
In
that can be easily redrawn.
and predicting such crossovers will be crucial for managers of information
on-line
venture.
addition
that could function as the mediaservers of the future. Microsoft is itself to be “the”
multimedia
may very well be mere lines in sand
Disney
American
now caters
to all audience
such as publishing
segments
rather
than just kids and
music labels and movie
families.
Through
the ownership
icons”
For example,
early to acquire
the Mighty
Sony moved
franchise,
CBS Records,
of
Ducks professional and launching
hockey
of “Beauty
reserved for top-secret military research, are poised to become gardenvariety “media servers” for cable and
Columbia Pictures and Radio City Music Hall. Matsushita followed with
and the Beast” as a Broadway show, Disney has entered an unorthodox
phone companies video-on-demand
the acquisition of MCA, the parent of Universal Studios. Time-Warner has
dimension
of entertainment
for them:
live performances.
of subscribers. cessors,
that want to provide services to millions Powerful
entered
micropro-
the brains of powerful
desktop
workstations, are morphing into smart chips embedded into dishwashers, cars
into a joint venture
with
Hitachi and Itochu, and has linked with Silicon Graphics, a leader in image processing
As the global up
that will provide
phone
lines and vice versa. Virtual
video-servers and other hardware and software capabilities for interactive
reality
simulators
television.
and TV sets. Cable lines are becoming have moved
military combat applications videogame designs. The ongoing
alliances,
from
Springing
to
mergers
and
acquisitions across the information grid look like a feeding frenzy as established global giants in each industry, as well as successful start-ups, position themselves for the integrated information
business.
By the year 2000,
the
from the written
word,
the world’s largest publisher, Germany’s Bertelsmann, has acquired book-publishing labels Bantam, Doubleday & Dell and has also diversified into television and telecommunication businesses. Bertelsmann recently teamed up with Deutsche Telekom and Kirch Gruppe to form an
mega-mergers
creation and
alliances of the Infornlation Age unfold, the question arises as to what exactly will be the sources of competitive advantage
in the information
creation fields. Merely owning a hot movie studio, music label, sports franchise,
or publishing
property
in
one’s corporate portfolio is not going to be enough of a ticket to success in the information age. The key is going to be the ability to integrate and deliver information content in ways that appeal strongly to the users. The more glutted the information environment
becomes,
the harder
it
will be to find information formats
and delivery
have a strong
content,
methods
appeal
which
to users.
Information Creation in a Postmodern World If information
creation
is at the center
of the contemporary information business, then the challenge of creating and sustaining
user appeal
is at the
heart of information creation. A number of factors have made appeal enhancing features
characteristics
the central
of the information
For example,
information
Thematic and Symbolic Linkages Merging of Genres Self-Referential
l
. .
Marketable
business. that does
not grab and hold a user’s attention
is
lost in today’s busy world. Infoglut, or information clutter, puts a tremendous premium on efficient and effective information
selection
information provider mation user. Infoglut users have alternative similar
information,
both for the and the inforalso implies that sources
for
and that there
Customizing Immersion Post-Adoption Relationship
l
l
is
not much risk if a user misses a particular information item, source,
or
channel. For example, one can get the day’s stockmarket closing numbers from radio, TV (broadcast, direct), newspapers, phone services), services,
computerized outdoor
cable and (audiotext
on-line
displays
(in Times
appeal
under
such conditions?
Are
and music-making
Square, for example) and fax. Within many of these modes, there are multiple channels that provide the desired stockmarket information.
there pathways through this seemingly hopeless thicket? There are a number
years illustrate
of emergent
publishing
rizes the new strategies
associated
Finally, the incipient
successful delivery.
creation
postmodern
society
transition means
to a
that there
are no more tried-and-true formulas for rendering appealing information. The cultural codes that create “user appeal” are m constant flux and are constantly reshaping consumer culture.6 How does one create and sustain an information business with high user
Summer 1995
patterns. information
Chart
2 summawith and
owning
properties
a movie, house
recording
Universal/MCA
has assiduously Spielberg
trial Light & Magic
Company
One of the ways information companies are trying to ensure competitiveness is by cornering cultivating talent. The headline
in turn based on Michael
“blockbuster”
products
of major movie
or
best-selling powerhouse
culti-
and his Indus-
develop
acquisitions
studio,
does not guarantee
1 Infusing and Cultivating Talent
grabbing
Merely
that work will flow. Matsushita’s vated Steven
and
in recent
this strategy.
to
entertainment
like the movie Jurassic Park, Crichton’s
book. Even a creative like Disney is constantly
on the prowl for talent; Disney/MGM Studios acquired Jim Henson’s
99
muppets
just before
untimely
death.
recruited
top athletes to appear
and advertising. player
Spielberg,
entertainment
star Nancy
as well as the attached
in its theme
parks
The most recent
David
combine
Jeffrey
battle
offerings multimedia
computers
The
services
who
gets what sized bite out of the users’ time. Some companies issue differently. World
available
the goal appears
as much
tourists
while keeping
in
as possible
Disney-controlled Disney
World
three-day
them
space. theme
passes
are encouraged
to buy four
or five-day
passes.
the three
parks in Florida,
a dozen
resorts
have sprung
wallets
open in a Disney
the day and at night. “mag-1ev which
train”
will whisk
visitors
from
airport
complex
in just seven minutes.
The recently
inaugurated
MGM
Grand Hotel in Las Vegas follows a similar strategy, This hotel, the world’s largest
with several
inside,
is a sprawling
“themed” structure
areas
purchases
American
GDE
a
10% of the
the consumer’s
time and
a key strategy
for a
variety of other service providers.
West
Mall in Canada
and the
Mall of America
are virtual
which
is surrounded
the visitor
merchandise,
by
service,
and information
enter-
options.
glass and steel. Once inside the MGM lion’s skin, the visitor’s time and
movies.
that control
Singapore’s
Changi
airport
space and time:
airport
and Pitts-
are not just air
but malls that offer a variety
information.
entertainment Singapore’s
and
Changi
even serves as a showcase
the nation’s
information by offering
for
technology free phone
calls
to anyone in Singapore and computerized transfer desks that can connect to virtually vation
any airline’s
seat-reser-
system.
3 Thematic and Symbolic Linkages
and channels
through
licensed up stores
the users’ space and time cannot
be captured in an undivided fashion, the next best strategy is to provide thematic
and symbolic
linkages.
connects its television
and through
space and time merchandise.
It has
across America
and
to bring a “Disney
to every major
shopping
mall.
4 Merging of Genres and Self-Referential Marketers
Positioning
of information
tainment
products
and enter-
and services
now
offer a merging
of genres:
work,
and entertainment,
shopping
travel and shopping, and theme context,
parks.
play and
hotels/restaurants In the postmodern
it is easy for information
providers
to offer, and for consumers
to accept,
fragmented
experiences, emotional
and momentary
each of which
create
high: a temporally
an
short-
How does the information and provider
Such
maintain
discussed already:
setting?
unity
We have
some of the methods controlling
and providing
time and space,
visible symbolic
thematic linkages. genres get merged another
creator
strategic
in such a fragmented
strategy
and
As widely diverse and juxtaposed, that is emerging
that of self-referential a Sony, It’s a Disney,
is
positioning:
It’s
It’s a Spielberg,
It’s a Wolfgang Puck. The implied blank after the name can be filled with any genre: movie, CD, tape, theme park, videogame, clothing item, book, cartoon,
When
already
It connects
opened
across time
lived ecstasy.
is not lost on other
businesses
airport
cities in
in
which space has been entirely enclosed by a stretched, green-tinted skin of
100
add up to nearly
capabilities
to the Disney
direct
purchases
of merchandise,
facility during
Orlando
warfare
Because
terminals
up so that tourist
is being considered
in trench
field. Why?
burgh’s
Disney
For the future,
it out to
of a World War I battle-
This strategy
and visitors theme
and the Fox
are slugging
reminiscent
tainment
two and
have been eliminated Ringing
marketalmost
programs
space”
Afternoon
numerous
In the Walt
parks,
viewing
Disney
of time through
set-Disney
Edmonton
of the time
and space. segments
and usage
that are spread
also internationally
space has become
to
to the Orlando-area
and a
to consumption
every 6-12 year old is glued to the TV
Capturing
the
For Walt Disney
in Florida,
be to occupy
approach
garden
by kids and kid-recommended
and
is about
experiences
In the U.S. afternoon,
gain cable affiliates
information
such as on-line
inside the hotel
park.
television
can help bring about thematic
continuity
for time has also moved
Kids’ Network
commodity.
linkages
(held
to the multiple
that time from 3 to 5 when
the High Ground
for many emerging
theme
children’s
and
2 Time and Space:
Time is a precious
Disney-style The battle
of Steven
Katzenberg
options
into the home.
Geffen.
Controlling
is captivated
and allocated
and performers,
on the scene is Dream-Works
SKG, the talent
budget
captive)
has also
such as figure-skating Kerrigan,
money
their creator’s
Disney
TV channel,
restaurant,
shop,
hotel, on-line service, smart card. From a marketing perspective, it is necessary
to establish
self-referential
position
the over-arching of the name.
The Columbia Journal of World Business
This type of “image quite different brand
positioning
which
on the attributes referential
positioning”
The art of delighting
is
ering (and building
from conventional relies heavily
of products.
positions
business
in
are likely to
Another
powerful
movieJurassic remember inside
example
positioning
of self-
appeared
Park. Many
people
seeing children
an actual Jurassic
in the still
in the movie (theme)
Park,
using lunch boxes with “Jurassic
Park”
logos. The same lunch boxes were later available
for purchase
the United
in stores
across
States.
product
offered
full satis-
to the users, that was enough.
Satisfied
users were ambassadors
of
goodwill
as well as repeat
This
is no longer
buyers.
the case. As in many other
industries,
user satisfaction the lowest
businesses: customers.
denomi-
in information
a necessary
cient condition
has
common
of competition
but not a suffi-
to win and keep
On top of user satisfaction, information
today are seeking user. The runaway
companies
success
in point:
even though images
floats across the screen users’ imagination. rates of piracy delighted
(GUI) intro-
a case in point.
nient and familiar
with conve-
icons such as file
popularity
emulation.
burn-ins,
that After Dark have captured
Incidentally,
the
for After Dark are low
to other
software-
users want to pay and get
their own disks of After Dark.
Summer 1995
design
ways to search for
is likely to take infor-
firms into “creative for delighting
shops”
in locations
multicultural factors
of
of
where
and other
For example,
established
a design
Sony has
center
and Germany’s
high-tech creative
diversity
The
is also
are likely to spur freewheeling
creativity. Jersey
designs
the establishments
groups
design
formation,
provides
that we have today
culture
of speed,
movement.’ not the speed
a society
Although
“news
of computer
that is the issue. While makes the speedy mation refers
driven
a by
processors of infor-
possible,
to the precipitously
the
of the world.
company’s investors
time,
by this American
rise to dominance
television
event
CNN now
news business,
in the
Japanese
are exploring
options
of
creating anchors
a rival to CNN that will have from all parts of the “triad”-
Europe,
East Asia, and North
America-and
produce
more
flavor than CNN. BBC
“global”
news with a
also launching context,
is opening
games,
deliver
a news
to rival CNN. the culture
up opportunities
and services: movies,
of
shopping,
education
ventures
for
information and even
and alliances
are
daily to create
and
such on-demand
services.
7 Skill Adaptation and Enhancement
it is
technology
movement
and materials
after its
on tap”-any
being announced
Paul
important,
habits
any place. Alarmed
sex. Joint
believes
living
of news being a planned
products
Virilio
of
using
CNN transformed
at 6 p.m. every evening,
speed
the Culture of Speed philosopher
Because
as well as in people’s
all types of “on-demand”
Valley.
cultural
product.
news coverage
being any place news is
happening
In a wider
Silicon
French
as
but it
correspondents stationed throughout the world, CNN is always there,
network
its main
shop in California’s
the
technologies
networks,
a unique
is reportedly
in New
Frogdesign-a
firm-has
6 Understanding
and other
television
Instead
have to find other
encouraging
other
news-watching
interface
all types in all parts of the world. search
CNN uses the same
In less than a decade
of the Macintosh
computer
“delighters”
of speed.
rooms.
clocks and trash cans. The
mation
culture
“there”
to find a
on their screens
immense
that understands
on ideas pioneered Palo Alto
of an infor-
company
round-the-clock
at Xerox’s
in an
mation
delivers
Center-was
folders,
culture.
broadcast
the user. The
Users were delighted “desktop”
surprise
is a case
today’s
don’t have screen
the captivating
the
of Berkeley
After Dark software
computers
of
ways to “delight”
Systems’
compared
Research
that are ushering
Macintosh
computer-based years earlier
“cycle times” instantaneous
CNN is a classic example
in a
please users. The continuing
information
successful
by Apple’s
designers
In the “old” days of the 197Os, if an
nator
delight
Users Interface
Today’s
Delighting
become
Graphics
GUI led to its widespread
5 Value Beyond Satisfaction:
faction
expect
that
These bonus
come as a pleasant
and therefore duced
go for such positions. referential
or service.
attributes
are costly to
create and hold: only the big players the information
users do not normally product
Self-
lies in discov-
in) attributes
speed
falling
As information tions explode of the biggest
technology
applica-
in all spheres of life, one challenges for firms is to
adjust to the skills of users. Although computer
literacy
and other
infor-
101
mation-age
skills are growing
worldwide
through
efforts
government
and private
growth
cannot
initiatives,
in technology.
challenge
for the information
is to design
products
A competitive business
and services
easily to the prevailing
More sophisticated engage
strategies
seek to
users in a new technology
through
initial
applications
very user-friendly intensive,
that are
and not very skill
and then to entice
to upgrade further
that
level of
.
user skills.
the users
the technology
minute
From time immemorial,
rides:
Crafting working
users find the total time
has to
such experiences on the intensity
entails
of engendering through
of the
a proven
way
user involvement
the creation
spectacles.
experience. Virtual Reality technologies represent one of the routes by which information businesses will
is
of fantasies
and
In the contemporary
postmodern era, the spectacle is no longer the rare event: we now live in a society Disney
of spectacle.8 Every single day, theme parks create fantastic
intensify the quality of user experiences. Besides this “high-tech” route,
spectacles in the form of parades, firework displays and laser light
the other route some firms choose the “high touch” route of caring
shows. The rising popularity of televised spectator sports is another
human
their skills to unlock
benefits
9 Fantasy and Spectacle
invested worth the experience they get in the five minutes that the ride lasts.
keep up with the
advances
adapt
this skill
theme parks are able to get away with SO-minute waiting periods for 5-
contact
Telephone
is
and interaction.
companies
and credit
indicator card
of the spectacle-infused
times we live in. By employing
well-
companies often base their market appeal on the attentive, caring service
National
through the countless jokes about clocks blinking at 12:OO and the need
their representatives contacted by phone.
has catapulted basketball into one of America’s and the world’s top
for a Ph.D.
beyond voice telephony to text-based and multimedia interfaces, the whole
spectator sports, sending Major League Baseball scrambling for ways to
issue of what constitutes
regain
offer. This is not a trivial task, as VCR manufacturers
found
degree
out painfully
to use the time-
shifted
recording
models
of VCRs. An engaged
however,
functions
user,
will go a long way to develop
the necessary
skills. Gamemakers
as Sega and Nintendo, sometimes
embed
of their games unlock
in the early
such
for example,
secret
which
keys in some
skilled
to access advanced
users can features
of
the game. 8 Crafting Marketable
Experiences
Given the hurly-burly of contemporary life, it is not enough to present new information
technologies
form of offerings
(be it products
services)
that are functional,
and versatile.
In an age where
in the or
capable time is a
provide when As we move
a kind, caring,
invest, they expect
their time. This is the reason during
busy tourist
seasons,
why, Disney
(NBA)
share.
delivered (at present, this means screen”) spectacle is less fantastic
such as “presence,” “attenand “intimacy” will have to
be re-interpreted contexts.
in tele-connected
the real-life Universal
In the experience business, the components and conduits-the hardware and the telecommunications
spectacle. Studios
“onthan
Thus, Disney
or
have to physically
get people into one of their theme parks to experience the spectacles: revenue streams depend on physical presence. We expect information
and other information delivery channels-take a back seat. Judgements about the quality of experiences
technology businesses efforts in the coming
are based on the software and user interfaces that people encounter.
rendering the mediated spectacle as, or more, fantastic than the “real” thing.
Powerful processing, storage, and transmission capabilities may be
As they succeed, there will be a corresponding shift in emphasis from space-
technological capabilities transparent to the user.
that they believe are worth
market
Association
Concepts tiveness”
ences that are engaging, absorbing and entertaining. For every unit of discretime people
Basketball
for example,
With the major exception of televised spectator sports, the media-
necessary to drive these interfaces, in the experience business, these
tionary
spectacles,
attentive and responsive human interaction will have to be re-examined.
scarce resource, it is necessary to charm the user by promising experi-
experiences
orchestrated
but,
have to be
to devote years to
major
based strategies (such as themed environments) to time-based strategies (themed, interactive, on-demand channels). There will, however, be new opportunities for space-based strategies because the user-owned equipment-what is called Customer Premise
Equipment
(CPE)-will
always lag in sophistication giant information company
to what a
can install
dramatically
on its own
premises.
IO Customizing
Immersion
We have already
alluded
and consumer
electronics.
the level of customizing
and entertainment
to the value of
We expect
Conclusion
to increase
in these industries
in the
As the traditional
increasingly
offers experiences
based competition.
that are immersing,
modes
of compe-
tition become scarce in the information business, attention will shift
future. As with computers, however, customization will work as a strategic, revenue-producing tool only when it
to content
and service-
Such a shift in
immersion-engaging
the user in
enchanting, engaging and delightful. It should be noted that merely creating
industry structure and strategy comes at a time when society itself is
absorbing,
and enchanting
capabilities
abandoning its modernist anchors experimenting with postmodern
interesting
experiences
that are so intense
that he
about everything
else for
of the experience.
Infor-
or she forgets the duration mation
technology
“customizing”
permits
experiences
to an increasing
The reason
customizing
to postmodern they fashion,
multiplex
refashion
Customizing
allows
using the After
a person
can project
a mystical
swirl one day and an star-trek
mood.
day, depending
on his or her
also helps the user
to deal with the major constraints face in adopting
space, money
skill. For example, providing
they
and using information
technologies-time,
interactive
stockmarket
users to customize
and
services
data allow
the portfolio
of
stocks they wish to track so that they can scan through the stocks of interest quickly and efficiently. Similarly, many application skilled
software
packages
users to customize
programs
enable
the
so that they can take short-
cuts or perform
fancier
than low-skilled
users.
operations
While customizing has made some inroads in computer-based information industries, it is still in its infancy
in industries
munications,
Summer 1995
that
“in thing.”
Traditional
mation
content-publishers,
networks, movie even conventional
developers
of inforbroadcast
studios, universities, software houses-
are therefore not automatically guaranteed dominance in this transi-
to achieve
tional
customization
11 Post-Adoption
products
success.
technology the relationship
of the buyer and seller after adoption is as important as, if not more important This is because the technology
before
adoption.
the value derived from depends on the sophis-
tication of use, which in turns depends on advice from the seller. Computer and software
sellers have come to
realize this and many offer extensive telephonic or on-line support, sponsor user groups, and publish magazines. Even videogame makers offer postpurchase support and announce, yet propagate through word-ofmouth, secret “keys” that unlock advanced game features.
era. New strategies
to appeal
Relationships
and services,
than, the relationship
manoeuver
Customizing
-the
forms.
and
Technology development and cultural analysis capabilities have to be merged
With many information
image of the
aggressive another
fashion
the user to
For example,
Dark screensaver,
they
images that
and project.9
the preferred
moment.
degree.
differentiation
seek today are the abilities to customize with powerful symbols are in current
is important
users is because
live life through
project
the
of these immersed
for endless
in a product or service does not lead to successful customization. What users
better
to mercurial
are needed
users of today.
Institutions and actors that understand these new, postmodern strategies will be ascendant
in these changing
As information businesses merge “info-tainment”
times.
and entertainment into a hybrid business,
each
business will have to understand the other’s operating logic. While technological strategies will continue to be important for competitive success in the information growing
business,
emphasis
with the
on information
creation, cultural strategies will also come to the center stage. The creation of usable and valuable information reasons of relevance, timeliness, productivity,
entertainment
for
value, or
personal growth is a cultural act. Information businesses will have to invest in understanding the cultural logic of our changing world. They will have to come up with ways of creating, processing and delivering information in appealing ways. It is the only way to get one’s message heard.
such as telecom-
television,
photography
103
q Herbert S. Dordick and Georgette Wang, The Information Sorrety (Newbury Park, CA: Sage, 1993) 2; Dordlck and Wang dwuss many other ways of measuring the informatw” economy and illustrate the conceptual difficulties Inherent I” wch meas”reme”t. 2 The basic idea for this two-dimensional grid hau come from varmus speeches and semmars gwe” h> Professor Jagdlsh N. Sheth of Emory Busmess School. 3 See, for example, Nell Postman, 7&nopo/y: The Surrender of Culttm to Technology (New York: Knopf, 1992). Accordmg to Postman, whde technology per se LEnot opposed to humanita, a technology-worshIppIng culture 1s so filled with popular culture m~ages that classical humanmes get crowded O”t.
104
4 See, for example, George I? Landow, Hypertext: The Convergmce of Contonporary Crrtrcal Theory and Technology (Baltmwre: The Johns HopkIn, Press, 1992); and Jay David Bolter, Wrrttng Space: The Computer, Hypertext, and the History of Writing (Hllladale NJ: Erlhaum, 1YY2). I” additmn to wrlr~“g text, Landow and Bolter are also leadmg writers of hypertext. 5 See George Gdder, “Into the Telecoam,” Harvard Busmess Review, March-April, 1992. For a wrw challenging the “Negroponte Swtch,” see J.N. Pelton, “Why Nicholas Negroponte 15Wrong About the Future of Telecommunlcatlon,” 7?lrcommunicarrons, January I YY3. 6 For a” mslghtful dlscussm” of these ~ssut‘s from a marketing perapectwe, see A. Fuat FIrat and Allad Venkatesh, “Postmoderniry The Age of Marketmg,” Intwnational /orimal of Research ,n Markrting, August 1993.
7 Paul Virilio, Speed and Politics: An Essay on Drontology, trans. by Mark Pohzzott~ (New York: Semlot&(e), 1986).
8 The term IS from Guy Debord, Socwiy of the Spcctoclc, (Detrwt: Black & Red (English translaUO”)). 9 Set, for example, Kenneth J. Gergen, Thr Saturated self: Ddemmas of Identrty rn Contemporary Life, New York: Raw Books, 1991; FrederIc Jameson, “Po\tmoder”lsm and Consumer Socuzty,” 1” H. Foster, ed., The Anti-Aesthetic: Essays on PostmodETVIC~dtzrre, Seattle, WA: Bay Press, 19X.3; A. Fuat FIrat and Allad] Venkatesh, “Postmodermty: The Age of Marketmg,” Intcmatronul]orrmalof Rescurch in Morketmng, August 1Y91.
The Columbia
Journal
ofWorld Business
The Changing Information Business Toward Content-Based and Service-Based Competition
As information-related industries creep into each other's territory and create hybrid "info-tainment" business groups, traditional routes to competitiveness become scarce. Attention is shifting toward content and service-based ways of competing, as postmodern [orces sweep aside conventional ways o[ developing and delivering content. The Dbolakias examine both the shift in the basis of competit~n in the information business and in information creation.
Information to define
technology
the economic
developed
world
a regionally
has come
today. It is not merely
dominant
technology
the way that steelmaking Pittsburgh
dominated emergence
Manchester. The of information technology
or textiles
ways of developing content. Therefore maintaining
of the
age. The known
as
are the emergent behind successful
and technologies
out in a number
of indus-
directly create, move, store, and display information-the view of the Information a colossal
marketing at the University of Rhode
that is, information
activities
Island. Ruby Roy Dholakia is professor of marketing and director of the
types of businesses,
reveals
Research Institute for Telecommun-
the entire global economy.
The authors gratefully acknowledge the research assistance of David J. Cordeiro, Neset Hikmet and Steve Messere. Funding for this paper was received from RITIM at the University of Rhode Island.
Summer I995
sector
sector.
The broader
of the workers
half of half
in the industrialized
world are employed growing information value added
view, in all
Almost
by the rapidly industries. The
of information
products
and services to the U.S. GNP is greater than 45%, and for Europe and Japan more
than 4O%.r
In this article, of the information
information
classifying
business:
creation
the core industries
that create, move, process, store and display information. These include
on
strategies. Scheme are helpful
and analyzing
in
the Infor-
mation Business. These are the forms of information, and the functions relating shows
to information.2
Chart
the classification
Information
Business
scheme
1 for
employing
these
two dimensions. The basic forms of information comprehensible by the human
senses-text,
graphics,
audio
and data-date back to the earliest civilizations. More sophisticated forms
of information-photographic
images, we examine
What
Our focus concentrates
Two basic dimensions is
a business
that in size approaches
businesses?
compete
change?
strategic patterns information
A Classification
process, narrow
Business-it
Nikhilesh Dholakia is professor of
Lawrence Erlbaum Associates, 1995).
will occupy
How can businesses
in this era of real-time
of
mation Business. If we take into account only those enterprises that
(Hillsdale, NJ:
user appeal
stage of the information
business.
business.
and application
products
are carried
Side Perspectives
and delivering developing and
We shall also address the competitive restructuring of the information
the industrial
tries. Together they constitute what is known in popular terms as the Infor-
book New Info-tainment in the Home: Demand-
and
that spawned
information
forthcoming Technologies
to those
and service-based;
the center
The creation
Island. The authors are co-editors, with Norbert Mundorf; of the
from those that
are cost and technology-based
plough that symbolized the rise of agrarian society, or to the steam engine contemporary era is rightly the Information Age.
ications and Information Marketing (RITIM} at the University of Rhode
of the information
2) that this change is occurring as postmodern forces replace traditional
once
to the invention
drivers
are changing
that are content
in
dominated
is parallel
competitive business
core of the
appeared centuries.
moving
pictures
and video-
only in the past two
The activities
we associate
with
broad-
the Information Business Grid in Chart 1 are neither new, nor are they
casting, cable, movies, telecommunications, information services, computers and consumer and office electronics. These industries drive today’s information-based economy. Our central arguments are: 1) that the primary
necessarily technological. Throughout history, however, key technological developments have transformed the nature of these activities-especially the speed, capacity and accuracy of information
publishing,
photo-processing,
95
Creation
Transmission
Processing
Storage
Display
Text Author and Hypertext Graphics
‘:
alw
:
Computers
Chips
High-Resolution Color Monitor
i xG4 :
Artist and CAD
:i..:&+&?4ngs1
Fax
Computer
Disks
Graph-
: :. _’:.
Color Printer
1 KS Data
k&d ,:
4kB?&Kkr2rS. Researchers and Sensors-Scanners
‘,.
1,:takucusatgm ‘.
~ Fi/e transfer 1
Computers
Magnetic
Tape
:uky~:y*yfdS
:,
Digital Radio
Computerized Recording Studio
-:,
::
Audio CD
1 Broadcast/Cable
/ Computerized
TV
Multimedia
,’
Concert-Quality Music Systems
:‘,
ers, Special Effects
y&ymwphamE . ,,, ,, -.:, .,. .:
~ t&$gQyj.
Video
1 Writers, Perform-
Laser Printer
I
Audio Musicians and
.,
: f&&k&&&&# ‘. ~~i&&~~ : i 1.,: ) 1 High-Definition
Digital Disks
1
Studio
I,
.
functions-and society.
thereby
the nature
With the enhancement
information
functions
in the forms
and availability
mation.
come changes
The Gutenberg
example, permitted
of infor-
Press, for
was a technology uniform
of
of the
display
that of textual
information for a mass market. Similarly, Jacquard’s punch-card driven looms programmable machines Babbage’s “analytical principles
96
established the basis of data-processing
to come,
and Charles
descriptions engine”
information.
The emergence
as an information
new forms
of video
to come. Video has added row to our information
a whole
new
grid. As
permits, new forms of will emerge (see box
“Hypermedia,
Telepresence
and
Beyond”). It is conceivable that a new form like Virtual Reality that is cutting-edge
the
commonplace
a decade
technological
innovation
today
will be
from now. As continues,
century
.,
grid of the 21st
will grow to include
many
novel cells. Following
of new forms yet
computer.
provided
of
form in the 20th
is a harbinger
economics information
the information
not only transforms it creates
regarded
of the
of the digital
Technology information,
century
: :
1 p&&@&&@e.
~ P~h:qrds’
logical century, erated.
the revolutionary
innovations
techno-
of the late 19th
the pace of change
accel-
By the 195Os, electronic
technologies had pervaded all aspects of the Information Business in the United States. in Information assisted
The sole exception was Creation. Although
by technologies
like the still
and the motion picture, and by electrical amplification of music, information
creation
The Columbia
retained
a quintes-
Journal of World Business
sential human character, remaining largely unchanged for centuries. Presently, electronic and digital technologies pervade all aspects of this business. Technology has started to creep into the final, human domain of information creation. Some fear that technology will destroy even the very humanism of the humanities,3 while others foresee possibilities of technoaided fiction, poetry, art and drama.4 Although these fears are now contested in the humanities and the social sciences, technology does enable creators of information to transcend the traditional limits of memory, speed, animation, verisimilitude and intensity of experience; it is likely to open up information worlds that lie beyond present-day experience.
Convergences and Crossovers Specific information industries have developed to occupy one or two functions in the information grid. The printing industry once dealt with the display of textual and graphical information; the photography business was concerned with the creation and display of lifelike two-dimensional graphic images; the radio and later television industries emerged for mass transmission of audio and video respectively. But as technological capabilities of these industries increased, and their primary markets matured, each diversified from the original focus. The data processing and data storage industry expanded into the processing and storage of text, graphics, images, and eventually audio and video. Similarly, the telecommunication industry
expanded from the transmission of audio to the transmission of all other types of information: text, graphics, data and video. By 1980, the information business structure comprised of a number of industries such as telecommunications and computers with deep vertical capabilities across information types, other industries such as consumer electronics and publishing with horizontal coverage, and finally some industries such as photography that remained closely anchored to their historical origination points. impact of Crossovers
The 1990s mark the beginning of the end of traditional components depicted in the information grid. After acquiring NCR, AT&T is now bringing products to the market that integrate
Hypermedia, Telepresence and Beyond Far from the dystopian visions of Huxley and Orwell, information technology has started blowing our way a fresh, wild breath of freedom. Some technologies, such as realityconquering video games, free the individual at least temporarily from the bounds of society while others, such as virtual-reality simulators and cyberspace connections, allow a measure of freedom over the laws of the real world. Hypermedia encompass the spheres of both hypertext and multimedia. Hypertext is computer-aided writing that facilitates non-linear reading. Like tiles in a kaleidoscopic mosaic, hypertext “links” allow the reader to organize a body of information to their own taste. Authors can no longer dictate the order in which their ideas are to be digested. Add 3-D animation, sound, and video components to this, and you have a combined movie studio and TV station editing room at your finger tips: hypermedia. In its most efficient form, multimedia allows a user to select the most appropriate set of sensory experiences to understand, or just feel, a concept. Telepresence goes beyond the power struggle between author and audience, to defy the laws of distance. E-mail,
Summer 1995
video-conferencing and remote file sharing make many of the constraints of space irrelevant. The Internet allows for an exchange of ideas among millions of individuals around the globe. Because messages are storable, the user is further freed from the constraint of choosing a common time as well. Video-conferencing and remote file sharing take the concept a step further by adding multimedia. In the future, Virtual Reality will combine all of these prior developments. This final step will allow the user to free themselves from the constraints of their own environment and their own identity. Through Virtual Reality the individual will be limited only by their own intellect in conveying and understanding information. -David
J. Cordeiro, Jr. and Nikhilesh
Dholakia
Source: Based on David Jay Bolter, Witing Space: The and the History of Writing, Hillsdale, NJ: Erlbaum, 1991; and Howard Rheingold, Virtual Community, Reading MA: Addison-Wesley, 1993. Computer, Hypertext,
97
computing
and communications
capabilities.
Software
are busy developing
boundaries
firms like Oracle supercomputers
in the information
grid
interactive
prowess, Deutsche Telekom brings a subscriber base of 14 million to this
Tracking
positioning
technology
service
of tomorrow
and Apple
become
a software
and consumer
electronics
may
businesses-skills
in this
area will mean the difference between successful strategies and strategic blunders.
firm. invading
turf that has brought logical crossovers. the result performance
are also
changing
characteristics
price/ of infor-
is going to develop
function of information creation. Many of the key players in the infor-
speculative
mation
is the
business
have realized
this and
“Ncgroponte Switch”-the controversial proposal by Nicholas
they have made or attempted appropriate strategic acquisitions of infor-
Negroponte
mation
of MIT’s AMedia Lab that
all voice communications wireless should
and fiber-optic
should
go
networks
communication bandwidth.’
that consume Supercomputers,
creation
European
firms. Japanese
cultural a lot of
imprints,
once
studios.
and
the world’s has started
of pubIished
largest software amassing
a
text, audio and
in the hope
of
has been a master
of the
acquisitions strategy for a long time and has been acquiring rights to medieval, modern, American and international fantasies from its very beginning
as an entertainment
company.
With studio
labels like
Touchstone Pictures, Hollywood, and Miramax, the movie-making side of
firms have made acquisi-
tions of some “classic
be used for multimedia
Microsoft,
Disney
into a
mation technologies. One such crossover that has received a lot of attention
and Kirch adds German
becoming a leading information provider to the world.
The building of sustainable competitive advantages in the information business
publishing
broadcasting rights to 50,000 hours of video programming. In addition,
video properties
techno-
Crossovers
of rapidly
venture
library
The Race to Create or Perish
each other’s
about
to Bertelsmann’s
producer,
It is not just firms such as AT&T, IBM and Microsoft
In
that can be easily redrawn.
and predicting such crossovers will be crucial for managers of information
on-line
venture.
addition
that could function as the mediaservers of the future. Microsoft is itself to be “the”
multimedia
may very well be mere lines in sand
Disney
American
now caters
to all audience
such as publishing
segments
rather
than just kids and
music labels and movie
families.
Through
the ownership
icons”
For example,
early to acquire
the Mighty
Sony moved
franchise,
CBS Records,
of
Ducks professional and launching
hockey
of “Beauty
reserved for top-secret military research, are poised to become gardenvariety “media servers” for cable and
Columbia Pictures and Radio City Music Hall. Matsushita followed with
and the Beast” as a Broadway show, Disney has entered an unorthodox
phone companies video-on-demand
the acquisition of MCA, the parent of Universal Studios. Time-Warner has
dimension
of entertainment
for them:
live performances.
of subscribers. cessors,
that want to provide services to millions Powerful
entered
micropro-
the brains of powerful
desktop
workstations, are morphing into smart chips embedded into dishwashers, cars
into a joint venture
with
Hitachi and Itochu, and has linked with Silicon Graphics, a leader in image processing
As the global up
that will provide
phone
lines and vice versa. Virtual
video-servers and other hardware and software capabilities for interactive
reality
simulators
television.
and TV sets. Cable lines are becoming have moved
military combat applications videogame designs. The ongoing
alliances,
from
Springing
to
mergers
and
acquisitions across the information grid look like a feeding frenzy as established global giants in each industry, as well as successful start-ups, position themselves for the integrated information
business.
By the year 2000,
the
from the written
word,
the world’s largest publisher, Germany’s Bertelsmann, has acquired book-publishing labels Bantam, Doubleday & Dell and has also diversified into television and telecommunication businesses. Bertelsmann recently teamed up with Deutsche Telekom and Kirch Gruppe to form an
mega-mergers
creation and
alliances of the Infornlation Age unfold, the question arises as to what exactly will be the sources of competitive advantage
in the information
creation fields. Merely owning a hot movie studio, music label, sports franchise,
or publishing
property
in
one’s corporate portfolio is not going to be enough of a ticket to success in the information age. The key is going to be the ability to integrate and deliver information content in ways that appeal strongly to the users. The more glutted the information environment
becomes,
the harder
it
will be to find information formats
and delivery
have a strong
content,
methods
appeal
which
to users.
Information Creation in a Postmodern World If information
creation
is at the center
of the contemporary information business, then the challenge of creating and sustaining
user appeal
is at the
heart of information creation. A number of factors have made appeal enhancing features
characteristics
the central
of the information
For example,
information
Thematic and Symbolic Linkages Merging of Genres Self-Referential
l
. .
Marketable
business. that does
not grab and hold a user’s attention
is
lost in today’s busy world. Infoglut, or information clutter, puts a tremendous premium on efficient and effective information
selection
information provider mation user. Infoglut users have alternative similar
information,
both for the and the inforalso implies that sources
for
and that there
Customizing Immersion Post-Adoption Relationship
l
l
is
not much risk if a user misses a particular information item, source,
or
channel. For example, one can get the day’s stockmarket closing numbers from radio, TV (broadcast, direct), newspapers, phone services), services,
computerized outdoor
cable and (audiotext
on-line
displays
(in Times
appeal
under
such conditions?
Are
and music-making
Square, for example) and fax. Within many of these modes, there are multiple channels that provide the desired stockmarket information.
there pathways through this seemingly hopeless thicket? There are a number
years illustrate
of emergent
publishing
rizes the new strategies
associated
Finally, the incipient
successful delivery.
creation
postmodern
society
transition means
to a
that there
are no more tried-and-true formulas for rendering appealing information. The cultural codes that create “user appeal” are m constant flux and are constantly reshaping consumer culture.6 How does one create and sustain an information business with high user
Summer 1995
patterns. information
Chart
2 summawith and
owning
properties
a movie, house
recording
Universal/MCA
has assiduously Spielberg
trial Light & Magic
Company
One of the ways information companies are trying to ensure competitiveness is by cornering cultivating talent. The headline
in turn based on Michael
“blockbuster”
products
of major movie
or
best-selling powerhouse
culti-
and his Indus-
develop
acquisitions
studio,
does not guarantee
1 Infusing and Cultivating Talent
grabbing
Merely
that work will flow. Matsushita’s vated Steven
and
in recent
this strategy.
to
entertainment
like the movie Jurassic Park, Crichton’s
book. Even a creative like Disney is constantly
on the prowl for talent; Disney/MGM Studios acquired Jim Henson’s
99
muppets
just before
untimely
death.
recruited
top athletes to appear
and advertising. player
Spielberg,
entertainment
star Nancy
as well as the attached
in its theme
parks
The most recent
David
combine
Jeffrey
battle
offerings multimedia
computers
The
services
who
gets what sized bite out of the users’ time. Some companies issue differently. World
available
the goal appears
as much
tourists
while keeping
in
as possible
Disney-controlled Disney
World
three-day
them
space. theme
passes
are encouraged
to buy four
or five-day
passes.
the three
parks in Florida,
a dozen
resorts
have sprung
wallets
open in a Disney
the day and at night. “mag-1ev which
train”
will whisk
visitors
from
airport
complex
in just seven minutes.
The recently
inaugurated
MGM
Grand Hotel in Las Vegas follows a similar strategy, This hotel, the world’s largest
with several
inside,
is a sprawling
“themed” structure
areas
purchases
American
GDE
a
10% of the
the consumer’s
time and
a key strategy
for a
variety of other service providers.
West
Mall in Canada
and the
Mall of America
are virtual
which
is surrounded
the visitor
merchandise,
by
service,
and information
enter-
options.
glass and steel. Once inside the MGM lion’s skin, the visitor’s time and
movies.
that control
Singapore’s
Changi
airport
space and time:
airport
and Pitts-
are not just air
but malls that offer a variety
information.
entertainment Singapore’s
and
Changi
even serves as a showcase
the nation’s
information by offering
for
technology free phone
calls
to anyone in Singapore and computerized transfer desks that can connect to virtually vation
any airline’s
seat-reser-
system.
3 Thematic and Symbolic Linkages
and channels
through
licensed up stores
the users’ space and time cannot
be captured in an undivided fashion, the next best strategy is to provide thematic
and symbolic
linkages.
connects its television
and through
space and time merchandise.
It has
across America
and
to bring a “Disney
to every major
shopping
mall.
4 Merging of Genres and Self-Referential Marketers
Positioning
of information
tainment
products
and enter-
and services
now
offer a merging
of genres:
work,
and entertainment,
shopping
travel and shopping, and theme context,
parks.
play and
hotels/restaurants In the postmodern
it is easy for information
providers
to offer, and for consumers
to accept,
fragmented
experiences, emotional
and momentary
each of which
create
high: a temporally
an
short-
How does the information and provider
Such
maintain
discussed already:
setting?
unity
We have
some of the methods controlling
and providing
time and space,
visible symbolic
thematic linkages. genres get merged another
creator
strategic
in such a fragmented
strategy
and
As widely diverse and juxtaposed, that is emerging
that of self-referential a Sony, It’s a Disney,
is
positioning:
It’s
It’s a Spielberg,
It’s a Wolfgang Puck. The implied blank after the name can be filled with any genre: movie, CD, tape, theme park, videogame, clothing item, book, cartoon,
When
already
It connects
opened
across time
lived ecstasy.
is not lost on other
businesses
airport
cities in
in
which space has been entirely enclosed by a stretched, green-tinted skin of
100
add up to nearly
capabilities
to the Disney
direct
purchases
of merchandise,
facility during
Orlando
warfare
Because
terminals
up so that tourist
is being considered
in trench
field. Why?
burgh’s
Disney
For the future,
it out to
of a World War I battle-
This strategy
and visitors theme
and the Fox
are slugging
reminiscent
tainment
two and
have been eliminated Ringing
marketalmost
programs
space”
Afternoon
numerous
In the Walt
parks,
viewing
Disney
of time through
set-Disney
Edmonton
of the time
and space. segments
and usage
that are spread
also internationally
space has become
to
to the Orlando-area
and a
to consumption
every 6-12 year old is glued to the TV
Capturing
the
For Walt Disney
in Florida,
be to occupy
approach
garden
by kids and kid-recommended
and
is about
experiences
In the U.S. afternoon,
gain cable affiliates
information
such as on-line
inside the hotel
park.
television
can help bring about thematic
continuity
for time has also moved
Kids’ Network
commodity.
linkages
(held
to the multiple
that time from 3 to 5 when
the High Ground
for many emerging
theme
children’s
and
2 Time and Space:
Time is a precious
Disney-style The battle
of Steven
Katzenberg
options
into the home.
Geffen.
Controlling
is captivated
and allocated
and performers,
on the scene is Dream-Works
SKG, the talent
budget
captive)
has also
such as figure-skating Kerrigan,
money
their creator’s
Disney
TV channel,
restaurant,
shop,
hotel, on-line service, smart card. From a marketing perspective, it is necessary
to establish
self-referential
position
the over-arching of the name.
The Columbia Journal of World Business
This type of “image quite different brand
positioning
which
on the attributes referential
positioning”
The art of delighting
is
ering (and building
from conventional relies heavily
of products.
positions
business
in
are likely to
Another
powerful
movieJurassic remember inside
example
positioning
of self-
appeared
Park. Many
people
seeing children
an actual Jurassic
in the still
in the movie (theme)
Park,
using lunch boxes with “Jurassic
Park”
logos. The same lunch boxes were later available
for purchase
the United
in stores
across
States.
product
offered
full satis-
to the users, that was enough.
Satisfied
users were ambassadors
of
goodwill
as well as repeat
This
is no longer
buyers.
the case. As in many other
industries,
user satisfaction the lowest
businesses: customers.
denomi-
in information
a necessary
cient condition
has
common
of competition
but not a suffi-
to win and keep
On top of user satisfaction, information
today are seeking user. The runaway
companies
success
in point:
even though images
floats across the screen users’ imagination. rates of piracy delighted
(GUI) intro-
a case in point.
nient and familiar
with conve-
icons such as file
popularity
emulation.
burn-ins,
that After Dark have captured
Incidentally,
the
for After Dark are low
to other
software-
users want to pay and get
their own disks of After Dark.
Summer 1995
design
ways to search for
is likely to take infor-
firms into “creative for delighting
shops”
in locations
multicultural factors
of
of
where
and other
For example,
established
a design
Sony has
center
and Germany’s
high-tech creative
diversity
The
is also
are likely to spur freewheeling
creativity. Jersey
designs
the establishments
groups
design
formation,
provides
that we have today
culture
of speed,
movement.’ not the speed
a society
Although
“news
of computer
that is the issue. While makes the speedy mation refers
driven
a by
processors of infor-
possible,
to the precipitously
the
of the world.
company’s investors
time,
by this American
rise to dominance
television
event
CNN now
news business,
in the
Japanese
are exploring
options
of
creating anchors
a rival to CNN that will have from all parts of the “triad”-
Europe,
East Asia, and North
America-and
produce
more
flavor than CNN. BBC
“global”
news with a
also launching context,
is opening
games,
deliver
a news
to rival CNN. the culture
up opportunities
and services: movies,
of
shopping,
education
ventures
for
information and even
and alliances
are
daily to create
and
such on-demand
services.
7 Skill Adaptation and Enhancement
it is
technology
movement
and materials
after its
on tap”-any
being announced
Paul
important,
habits
any place. Alarmed
sex. Joint
believes
living
of news being a planned
products
Virilio
of
using
CNN transformed
at 6 p.m. every evening,
speed
the Culture of Speed philosopher
Because
as well as in people’s
all types of “on-demand”
Valley.
cultural
product.
news coverage
being any place news is
happening
In a wider
Silicon
French
as
but it
correspondents stationed throughout the world, CNN is always there,
network
its main
shop in California’s
the
technologies
networks,
a unique
is reportedly
in New
Frogdesign-a
firm-has
6 Understanding
and other
television
Instead
have to find other
encouraging
other
news-watching
interface
all types in all parts of the world. search
CNN uses the same
In less than a decade
of the Macintosh
computer
“delighters”
of speed.
rooms.
clocks and trash cans. The
mation
culture
“there”
to find a
on their screens
immense
that understands
on ideas pioneered Palo Alto
of an infor-
company
round-the-clock
at Xerox’s
in an
mation
delivers
Center-was
folders,
culture.
broadcast
the user. The
Users were delighted “desktop”
surprise
is a case
today’s
don’t have screen
the captivating
the
of Berkeley
After Dark software
computers
of
ways to “delight”
Systems’
compared
Research
that are ushering
Macintosh
computer-based years earlier
“cycle times” instantaneous
CNN is a classic example
in a
please users. The continuing
information
successful
by Apple’s
designers
In the “old” days of the 197Os, if an
nator
delight
Users Interface
Today’s
Delighting
become
Graphics
GUI led to its widespread
5 Value Beyond Satisfaction:
faction
expect
that
These bonus
come as a pleasant
and therefore duced
go for such positions. referential
or service.
attributes
are costly to
create and hold: only the big players the information
users do not normally product
Self-
lies in discov-
in) attributes
speed
falling
As information tions explode of the biggest
technology
applica-
in all spheres of life, one challenges for firms is to
adjust to the skills of users. Although computer
literacy
and other
infor-
101
mation-age
skills are growing
worldwide
through
efforts
government
and private
growth
cannot
initiatives,
in technology.
challenge
for the information
is to design
products
A competitive business
and services
easily to the prevailing
More sophisticated engage
strategies
seek to
users in a new technology
through
initial
applications
very user-friendly intensive,
that are
and not very skill
and then to entice
to upgrade further
that
level of
.
user skills.
the users
the technology
minute
From time immemorial,
rides:
Crafting working
users find the total time
has to
such experiences on the intensity
entails
of engendering through
of the
a proven
way
user involvement
the creation
spectacles.
experience. Virtual Reality technologies represent one of the routes by which information businesses will
is
of fantasies
and
In the contemporary
postmodern era, the spectacle is no longer the rare event: we now live in a society Disney
of spectacle.8 Every single day, theme parks create fantastic
intensify the quality of user experiences. Besides this “high-tech” route,
spectacles in the form of parades, firework displays and laser light
the other route some firms choose the “high touch” route of caring
shows. The rising popularity of televised spectator sports is another
human
their skills to unlock
benefits
9 Fantasy and Spectacle
invested worth the experience they get in the five minutes that the ride lasts.
keep up with the
advances
adapt
this skill
theme parks are able to get away with SO-minute waiting periods for 5-
contact
Telephone
is
and interaction.
companies
and credit
indicator card
of the spectacle-infused
times we live in. By employing
well-
companies often base their market appeal on the attentive, caring service
National
through the countless jokes about clocks blinking at 12:OO and the need
their representatives contacted by phone.
has catapulted basketball into one of America’s and the world’s top
for a Ph.D.
beyond voice telephony to text-based and multimedia interfaces, the whole
spectator sports, sending Major League Baseball scrambling for ways to
issue of what constitutes
regain
offer. This is not a trivial task, as VCR manufacturers
found
degree
out painfully
to use the time-
shifted
recording
models
of VCRs. An engaged
however,
functions
user,
will go a long way to develop
the necessary
skills. Gamemakers
as Sega and Nintendo, sometimes
embed
of their games unlock
in the early
such
for example,
secret
which
keys in some
skilled
to access advanced
users can features
of
the game. 8 Crafting Marketable
Experiences
Given the hurly-burly of contemporary life, it is not enough to present new information
technologies
form of offerings
(be it products
services)
that are functional,
and versatile.
In an age where
in the or
capable time is a
provide when As we move
a kind, caring,
invest, they expect
their time. This is the reason during
busy tourist
seasons,
why, Disney
(NBA)
share.
delivered (at present, this means screen”) spectacle is less fantastic
such as “presence,” “attenand “intimacy” will have to
be re-interpreted contexts.
in tele-connected
the real-life Universal
In the experience business, the components and conduits-the hardware and the telecommunications
spectacle. Studios
“onthan
Thus, Disney
or
have to physically
get people into one of their theme parks to experience the spectacles: revenue streams depend on physical presence. We expect information
and other information delivery channels-take a back seat. Judgements about the quality of experiences
technology businesses efforts in the coming
are based on the software and user interfaces that people encounter.
rendering the mediated spectacle as, or more, fantastic than the “real” thing.
Powerful processing, storage, and transmission capabilities may be
As they succeed, there will be a corresponding shift in emphasis from space-
technological capabilities transparent to the user.
that they believe are worth
market
Association
Concepts tiveness”
ences that are engaging, absorbing and entertaining. For every unit of discretime people
Basketball
for example,
With the major exception of televised spectator sports, the media-
necessary to drive these interfaces, in the experience business, these
tionary
spectacles,
attentive and responsive human interaction will have to be re-examined.
scarce resource, it is necessary to charm the user by promising experi-
experiences
orchestrated
but,
have to be
to devote years to
major
based strategies (such as themed environments) to time-based strategies (themed, interactive, on-demand channels). There will, however, be new opportunities for space-based strategies because the user-owned equipment-what is called Customer Premise
Equipment
(CPE)-will
always lag in sophistication giant information company
to what a
can install
dramatically
on its own
premises.
IO Customizing
Immersion
We have already
alluded
and consumer
electronics.
the level of customizing
and entertainment
to the value of
We expect
Conclusion
to increase
in these industries
in the
As the traditional
increasingly
offers experiences
based competition.
that are immersing,
modes
of compe-
tition become scarce in the information business, attention will shift
future. As with computers, however, customization will work as a strategic, revenue-producing tool only when it
to content
and service-
Such a shift in
immersion-engaging
the user in
enchanting, engaging and delightful. It should be noted that merely creating
industry structure and strategy comes at a time when society itself is
absorbing,
and enchanting
capabilities
abandoning its modernist anchors experimenting with postmodern
interesting
experiences
that are so intense
that he
about everything
else for
of the experience.
Infor-
or she forgets the duration mation
technology
“customizing”
permits
experiences
to an increasing
The reason
customizing
to postmodern they fashion,
multiplex
refashion
Customizing
allows
using the After
a person
can project
a mystical
swirl one day and an star-trek
mood.
day, depending
on his or her
also helps the user
to deal with the major constraints face in adopting
space, money
skill. For example, providing
they
and using information
technologies-time,
interactive
stockmarket
users to customize
and
services
data allow
the portfolio
of
stocks they wish to track so that they can scan through the stocks of interest quickly and efficiently. Similarly, many application skilled
software
packages
users to customize
programs
enable
the
so that they can take short-
cuts or perform
fancier
than low-skilled
users.
operations
While customizing has made some inroads in computer-based information industries, it is still in its infancy
in industries
munications,
Summer 1995
that
“in thing.”
Traditional
mation
content-publishers,
networks, movie even conventional
developers
of inforbroadcast
studios, universities, software houses-
are therefore not automatically guaranteed dominance in this transi-
to achieve
tional
customization
11 Post-Adoption
products
success.
technology the relationship
of the buyer and seller after adoption is as important as, if not more important This is because the technology
before
adoption.
the value derived from depends on the sophis-
tication of use, which in turns depends on advice from the seller. Computer and software
sellers have come to
realize this and many offer extensive telephonic or on-line support, sponsor user groups, and publish magazines. Even videogame makers offer postpurchase support and announce, yet propagate through word-ofmouth, secret “keys” that unlock advanced game features.
era. New strategies
to appeal
Relationships
and services,
than, the relationship
manoeuver
Customizing
-the
forms.
and
Technology development and cultural analysis capabilities have to be merged
With many information
image of the
aggressive another
fashion
the user to
For example,
Dark screensaver,
they
images that
and project.9
the preferred
moment.
degree.
differentiation
seek today are the abilities to customize with powerful symbols are in current
is important
users is because
live life through
project
the
of these immersed
for endless
in a product or service does not lead to successful customization. What users
better
to mercurial
are needed
users of today.
Institutions and actors that understand these new, postmodern strategies will be ascendant
in these changing
As information businesses merge “info-tainment”
times.
and entertainment into a hybrid business,
each
business will have to understand the other’s operating logic. While technological strategies will continue to be important for competitive success in the information growing
business,
emphasis
with the
on information
creation, cultural strategies will also come to the center stage. The creation of usable and valuable information reasons of relevance, timeliness, productivity,
entertainment
for
value, or
personal growth is a cultural act. Information businesses will have to invest in understanding the cultural logic of our changing world. They will have to come up with ways of creating, processing and delivering information in appealing ways. It is the only way to get one’s message heard.
such as telecom-
television,
photography
103
q Herbert S. Dordick and Georgette Wang, The Information Sorrety (Newbury Park, CA: Sage, 1993) 2; Dordlck and Wang dwuss many other ways of measuring the informatw” economy and illustrate the conceptual difficulties Inherent I” wch meas”reme”t. 2 The basic idea for this two-dimensional grid hau come from varmus speeches and semmars gwe” h> Professor Jagdlsh N. Sheth of Emory Busmess School. 3 See, for example, Nell Postman, 7&nopo/y: The Surrender of Culttm to Technology (New York: Knopf, 1992). Accordmg to Postman, whde technology per se LEnot opposed to humanita, a technology-worshIppIng culture 1s so filled with popular culture m~ages that classical humanmes get crowded O”t.
104
4 See, for example, George I? Landow, Hypertext: The Convergmce of Contonporary Crrtrcal Theory and Technology (Baltmwre: The Johns HopkIn, Press, 1992); and Jay David Bolter, Wrrttng Space: The Computer, Hypertext, and the History of Writing (Hllladale NJ: Erlhaum, 1YY2). I” additmn to wrlr~“g text, Landow and Bolter are also leadmg writers of hypertext. 5 See George Gdder, “Into the Telecoam,” Harvard Busmess Review, March-April, 1992. For a wrw challenging the “Negroponte Swtch,” see J.N. Pelton, “Why Nicholas Negroponte 15Wrong About the Future of Telecommunlcatlon,” 7?lrcommunicarrons, January I YY3. 6 For a” mslghtful dlscussm” of these ~ssut‘s from a marketing perapectwe, see A. Fuat FIrat and Allad Venkatesh, “Postmoderniry The Age of Marketmg,” Intwnational /orimal of Research ,n Markrting, August 1993.
7 Paul Virilio, Speed and Politics: An Essay on Drontology, trans. by Mark Pohzzott~ (New York: Semlot&(e), 1986).
8 The term IS from Guy Debord, Socwiy of the Spcctoclc, (Detrwt: Black & Red (English translaUO”)). 9 Set, for example, Kenneth J. Gergen, Thr Saturated self: Ddemmas of Identrty rn Contemporary Life, New York: Raw Books, 1991; FrederIc Jameson, “Po\tmoder”lsm and Consumer Socuzty,” 1” H. Foster, ed., The Anti-Aesthetic: Essays on PostmodETVIC~dtzrre, Seattle, WA: Bay Press, 19X.3; A. Fuat FIrat and Allad] Venkatesh, “Postmodermty: The Age of Marketmg,” Intcmatronul]orrmalof Rescurch in Morketmng, August 1Y91.
The Columbia
Journal
ofWorld Business