Maximizing the Prime of Time
Maximizing the Prime of Time
(Views are personal)
A master batsman in cricket will tell you that it is not just stroke-play. It is also superb timing that creates winning shots. The batsman judges the flight, pitch and direction of the ball and perfectly times the stroke to send the ball to the fence –or, even better, over it.
In today’s fast-changing business environment, harvesting of opportunities in an agile manner makes the difference between success and failure. No modern business plan is cast in concrete. One cannot miss a knocking opportunity because of an inflexible strategic focus. Brutus pleaded with his fellow-warriors to seize the fleeting moment thus:
“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.”
Using the window of available time effectively has become critical to business strategy. Most products have a “shelf-life”. It is not often appreciated that many service offerings and ideas have an “expiry date”as well. In a volatile environment, with competitors innovating every day, the life cycle of products and services are becoming shorter and shorter. In such an environment, you have to innovate, often cannibalizing your own product portfolio.
Apple and HP present good examples of cannibalizing innovation in their smartphone and printer businesses respectively. When Apple brings out a new generation of iPhones, there is a loyal band of Apple fans who readily jump into the bandwagon. The trick for Apple is to leverage the limited life cycle of the new model and sell large volumes as quickly as possible until a newer model hits the market. In order for Apple to succeed, it must pull off innovation with a capital I. Incremental improvements in a product offering is unlikely to persuade customers to switch as there is always some pain involved in changing over.
The automobile industry started the craze of new models. There are numerous, global auto-makers who are innovating constantly and offering new cars. In the changed environment, they must pay heed to what the Red Queen had told Alice, “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that.”
Seats on a flight or in a movie theater are perishable “products”. Once the flight takes off or the movie begins the revenue on empty seats is lost forever. Every movie has limited life-span in terms of revenue streams. Of course, there are classics like The Roman Holiday, La Dolce Vita, Pather Panchali , Sholay and Mughal-E-Azam. If you are not a film critic but a movie producer, you think very differently. Revenues from re-runs and DVD sales of classics have limited potential. The movie moghul Sir Run Run Shaw was once asked what kind of movie he liked. He famously said,“Only the ones which make money. “
From a pure financial standpoint, every movie has a time-bound revenue potential with peak opportunities. What Fayyaz Hashmi, a Calcutta-born Pakistani poet wrote in a ghazal about his beloved is equally true of businesses where revenues must be captured or they will be lost forever:
“Life is enchained in the prison of time.
Just a few precious moments have escaped from its clasp.
By squandering them dear
You will keep regretting for a lifetime.”
In the movie world, the traditional wisdom is to delay the publishing of DVDs or release it on the cable or internet , until the “prime time” is over. It is similar to the book publishing industry. Until the hard cover edition runs its course, the paper back does not show up. However, this strategy will work only if one is able to keep customers segments in water-tight compartments.
The proliferation of tablets and mobile phones, high-speed broadband and services like Netflix, Hulu and YouTube have changed the way movies are watched today. Changes in technology are making it increasingly difficult to keep them in separate boxes. You have also the scourge of piracy. No sooner does a movie hit the theaters than the pirated copies show up in shady shops. In addition, young folks burn DVDs, share them with friends, upload them on internet sites and physically ship them across geographies. Those who produce vernacular movies in India know full well that a majority of the revenues come from “sale of rights” in multiple geographies like North America, Europe, Middle-East and Australia meant for Non-Resident Indian (NRI) viewers. NRIs no longer want to wait for stale movies.
The contrarian strategy is to release the movies simultaneously via multiple channels and not sequentially. Kamal Haasan’s Rajkamal Films International released the spy thriller Vishwaroopam simultaneously on direct-to-home (DTH) television and in cinema halls with great effect.
In the movie business, revenues are generated by developing, selling and reselling the same content using different formats in different markets through multiple channels. In appropriate cases, a simultaneous release has a number of merits and some pricing challenges. If a movie is released at the same time in movie halls, on the subscription internet, DTH, cable, DVDs (fully priced), in airlines entertainment channels and in every geography-it is likely to access the maximum number of viewers in the shortest time span. It may cannibalize some channels but it will also hit piracy hard. Maximizing the prime of time is critical to success in a business with shrinking attention spans of freedom-seeking customers who want everything, here, now and anywhere.