Did you ever wonder why Sony doesn’t dominate the digital music market? After all, they are historically strong in consumer electroncis (i.e. walkman). And they own a recording studio. Yet, Apple dominates and the word "I-Pod" is synonymous with digital music. Sony was locked into different divisions with differing goals, and a desire in those divisions to fight digital music in order to extend the life of CDs. They didn’t see the I-Pod coming. They were blinded by their Lock-in to their old Success Formula, so even though they could observe MP3 technology, and Napster’s first inroads into their market, they waited way too long to effectively react.
This week’s Oscars is a showcase for recognizing Challenges. The event was dominated by movies from small production houses, and best picture was won by "lowly" Lions Gate – best known for low budget slasher movies, urban films and documentaries.
It’s easy to discount this experience. You may not have enjoyed many of the movies which dominated the nominations, and the wins. After all, for best song to to be the urban rap "It’s Hard Out Here for a Pimp" is more than a bit jarring for many people over 40. It’s easy to say "I don’t connect with these movies, and this doesn’t make any sense to me" and then walk away. As a viewer, no problem.
But, if you work for Universal Pictures, you should think again. The early stages of change look just like this. A market shifting Challenge looks exactly like the 78th Academy Awards. A bit odd, easy to discount and explain away. But the fact is, films made differently, and for a fraction of what the big studios spend, just ran away with all the awards.
Lions Gate is a different sort of company from Paramount, et.al. These companies represent the front edge of a shifting marketplace. They demonstrate a new Success Formula for filmmaking. Larger competitors will ignore them at their peril, for they could well do to movie companies what Apple first did to large computers (such as DEC and Wang), and then later what a struggling Apple did to analog music.