Companies will need to drastically change mindsets to face a newly-evolved marketplace.
With the next generation of people existing primarily in the cloud and a dramatic change in the way the average person consumes, companies can start to look at successful Web models to shape future strategies.
This is according to Futureworld CE Neil Jacobson, speaking this morning during his keynote address at the Neotel Solutions Day, at the Sandton Convention Centre.
He aligns the “free to fee” concept with the successful business model built by online services like Google, YouTube and Facebook. “What Google has been able to do, is deliver a series of high value business in the peripheral of its free services. We call it Googlenomics.”
According to Jacobson, while the largest industry impact has been in media, all sectors will feel the invasion of these models. People's connections through social networking have changed the way they consume, and many businesses are finding themselves at a loss in dealing with that level of connectivity, he explains.
“Convergence has changed the balance of power,” he notes. He says convergence has turned traditional marketplaces into what he considers the first true marketplace. “Take the music industry: in 2008 there were 14 million downloads of which only 1.4 million were legal. The market has spoken; they want their music for free.”
Convergence has changed the balance of power.
Neil Jacobson, CE, Futureworld
Jacobson notes it will not be long before all other sectors will start to have the same reaction from the consumer, simply because of the control they now have over the way products are delivered.
The freedom to control their own product development and easily disseminate new ideas has a large impact on research and development, he adds. “User-generated content is a certain tsunami.”
However, he explains that the African continent still has opportunity to mine, specifically with the coming undersea cables and high capacity telecoms networks. Local businesses will have to start taking lessons from the media industry and start shifting strategies that fit into the world of connectivity.
He points out that companies need to start taking advantage of Facebook and YouTube, by making the new social connectivity a basis to build brands, since they are replacing advertising. “People are beginning to trust a blog more than a R40 million advertising campaign.”
Jacobson notes that businesses which move to the “free to fee” model may have the best chance of survival in the newly developed marketplace.
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