Innovation Lessons from the Adult Pay Per View Business

Tuesday, 06 September 2011 06:30
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This week, I wish to relate an experience I had in the mid '90-s, during my tenure as Marketing Director at Time Warner Cable in Cincinnati, Ohio, to an emerging phenomena in open source collaboration. It's a saucy topic, but see if you agree that there are some relevant similarities.

While at TWC, I faced an extemely annoying and time/labor intensive challenge. Monthly, our cable system would receive a slew of X-rated adult movie titles from multiple independent distributors for our consideration for airing on our adult pay per view service.  Marketing was responsible for selecting titles and extensively editing content to ensure that overly explicit material didn't reach the airwaves (this being conservative Cincinnati, Ohio). This was highly time consuming work and not remotely as much fun as one might imagine.

How to address this nuisance? I selected a single provider and negotiated an attractive supply agreement with them. In exchange for awarding them 100% of our business, I negotiated a considerably more favorable revenue split and importantly, required them to rigorously edit their content to meet our community standards. Problem solved.

How does this example relate to open source collaboration? Apparently, some B2B and B2C companies are now beginning to experiment with engaging partner companies to assume responsiblity for managing new product development for some of their smaller brands and for select product niches within brands. These brands and products, while still important to their owners, can't justify the dedication of internal corporate technical product development resources similar to their larger counterparts. However, rather than neglect these relatively valuable businesses altogether, some companies are selecting and assign external partners to manage their product development. In doing so, they can focus their internal technical resources on (relatively speaking) higher priority businesses. The attraction for the partner is the opportunity to earn sustained, high volume manufacturing assignments for well-established businesses and brands.

This represents a fairly dramatic evolution from traditional external collaboration and supply agreements involving individual skus. This latest wave in open source collaboration promises to offer attractive win/win opportunities for B2C and B2B product companies and select external partners. Its progress will be fascinating to follow. I'd be interested in hearing from folks who have related experiences to share.

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