Innovation

Bessant and Tidd outline the 4 Ps of innovation as product, process, position and paradigm innovation. In the media industry, this innovation is becoming ever more important to businesses with the escalation of the digital revolution. However, Getz and Robinson say that the ‘innovate or die’ mantra has caused the media to overlook the “true sources of long-term high performance” (2003:130) such as incremental innovations (process innovation). Innovation is not always inventing a completely new product, but making small changes to what is already there to produce reliable, good-quality products at reasonable prices (Getz and Robinson 2003: 134).

In the context of the publishing industry, Amazon is the company which stands out in terms of innovation. For example, Amazon has recently released a new line of Kindles, including a touchscreen version and the Kindle Fire multimedia tablet (product innovation). This tablet is the strongest competitor to Apple’s iPad tablet. However, Levy says that the philosophy behind the tablets is completely different. Apple is primarily a hardware company, with 91% of revenue coming from sales of products. Amazon, on the other hand is content-focussed (position innovation), with nearly half of its revenue coming from media sales (Levy 2011).

Additionally, Apple’s iPad focuses on downloads of movies, music and books among other things, even from the iCloud. The iPad, therefore, is “tethered to the paradigm of local storage, putting a premium on machines with more memory” (Levy 2011). The Kindle Fire, however, focuses on streaming as users can store for free on the company’s server (paradigm innovation). Amazon’s CEO Jeff Bezos says that the tablet is “a fully-integrated media service. Hardware is a crucial ingredient but it is only a piece of it” (Levy 2011).

Amazon also differentiates itself from other companies by working with low margins in creating their products (process innovation). Tech companies always have high margins with a smaller customer base; Amazon is the only one that has small margins. They focus and obsess on fixing small defects with products, as the most expensive thing to a business is a mistake.

Getz, I and Robinson, A. G. (2003) ‘Innovate or Die: Is that a fact?’ Creativity and Innovation Management 12(3): 130-6.

Levy, S. (2011) ‘CEO of the Internet’. [Online] Available from: http://castroller.com/podcast/WiredFeatures/2717420 [Accessed 29 January 2011].