Disintermediation – Word of the Day Friday

As you look out over the horizon in your industry, are you paying attention to those that are storming your castle. Or more importantly, competitors taking the bypass and not even worrying about your castle. I am talking about those start-ups and fast movers who are looking to take you out of the equation. Let’s look at three examples of it.

TV Un-Chained

While John McCain attempts to give us the ability to subscribe to discrete channels we really want, the more interesting possibility is the removal of the whole broadcast television infrastructure and going right from production house to my television.

Ever since Apple released the black AppleTV there has been speculation over the introduction of apps. Some of that speculation has been about games, but TV apps will give the user incredibly granular control of their viewing experiences. At first, this will mean networks bypassing the satellite and cable providers and offering their shows to you directly. You see this in its nascency in the mobile space already, with apps on your iPad or Android tablet.

Some of you may argue that Hulu Plus and Netflix already are disintermediating television and many users have cut the cable. Well, that may be true, but I find it more interesting this morning to read in Deadline that the CW will be bringing it’s own app to the AppleTV at no cost. While I love Netflix, I don’t get the shows from last night. And while I love Hulu Plus, I don’t get all the CW’s shows (like the first 15 episodes of Arrow).

Set-top boxes, or TV’s with app functionality, will give the user great control over their viewing experiences. If I was a satellite or cableTV provider I would take a look at what happened to all our record stores (whither Tower Records?) when iTunes took over the world. How many years before they really see their revenue stream dry up? It will be a few, but it will happen.

Your Health – In Your Hands

When I grew up all the control over your health care was in the doctor’s hands. You went in, described what was going on, and they did their magic. I was too young to understand second opinions and took their advice at face value. Today that has changed. If I have a symptom, I look it up on WebMD and decide if it is serious.

Unfortunately in health care we have seen in our lifetimes the reverse of disintermediation, hypermediation if you allow me to coin a word. Now a faceless group tells the doctor what they think is good for the patient and if the doctor disagrees they have to jump through hoops to get there. Case in point, if a man under the age of 50 wants a colonoscopy because they are worried about colon cancer, the doctor has to come up with some fabrication why it is medically justified. This is despite the 3% rise (every year) in colorectal cancers in those under 50. Missing a diagnosis of colorectal cancer can very easily mean a decreased chance of a cure.

What I think I see in health care is a convergence of wearable computing, home health monitoring and big data analytics. With more inputs coming in and computing power costs going down, the ability for a computing system to diagnose me before I even sense something is wrong is increasing. IBM’s Watson is better at diagnosing cancer in patients already. Watson must have spent all that money from Jeopardy on it’s medical education.

With devices like fitness trackers, users are taking control of the information about their own workouts and correlating it to other measurements, like weight and BMI. They can now know whether 3 sets of 20 squats are better than 4 sets of 15 squats. This is a trick question as squats suck, period.

It is not too much of a leap to go from fitness trackers and health monitors to a world where the patient has all the data at their fingertips and their home computer has a preliminary diagnosis before they ever go to the doctor. At least I hope for this as the trend in Health Care is not doing anything to increase our health.

Car Buying Unchained

Another case of the holders of the castle resisting efforts to storm it comes to us from North Carolina. Tesla’s whole buying model is quite interesting. You don’t go into a store, test drive, decide to buy, resist the finance guy’s sales pitch for extended warranty, sign the loan documents and then drive away. You order your car online, and can have the car delivered right to your home.

There is a little known law in most states that kept car manufacturers from dealing directly with customers. Much like the law that prevented movie production companies from owning theaters. All of those car dealer associations have been lobbying for enforcement of the laws against Tesla and in North Carolina they have almost succeeded in making it illegal to communicate with Tesla if you are a Tesla owner.

The North Carolina Automobile Dealer’s Association calls Tesla’s model “unfair competition.” They are supporting a bill which would prevent any car manufacturer from “using a computer or other communications facilities, hardware, or equipment” to sell or lease a car to anyone in North Carolina.

The real rub is that those dealers make money not from selling you a car, but from servicing your car. By this type of model you wouldn’t have to deal with a dealer franchise ever, reducing their ability to make a profit. Okay, I do feel for them alittle bit, and have always wondered why the manufacturers never lobbied to push them out, anyway. But this is progress folks. Standing on the ramparts of the castle lobbing fireballs at the siege towers will only keep them out for so long.

Disintermediation is the Future

These three examples may not have any relevance to your business or your relationship with your consumers, but you need to pay attention to this trend. You may be able to take advantage of it and go directly to your end-users. You may be that new start-up who has a way to disintermediate some aspect of a consumer’s life.

Pay attention to the horizon, look at the trends, and seize the opportunities.

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