Remember Napster?

Napster will go down in history as one of the most disruptive “things” for businesses in the old economy. The music and video sharing and downloading site gave users across the globe the ability to “share” each others’ collections. The music industry bore the brunt of Napster there was a time when we thought that it will change it forever. Countless copycats and lawsuits later, things seem to have settled down a bit.

A couple of “legitimate” business models emerged in this space. Where legitimate means: music download is OK as long as you pay for it. The two most prevalent business models are – “pay by the sip” as in Apple’s iTunes or monthly subscription as in Real’s Rhapsody. Napster itself morphed into dopted the subscription model.

This music industry saga is far from over. It will take a few twists and turns before all is said and done. But there is a much more important story emerging thanks to Napster.

Well, forget Napster. Also forget what it did to the music industry. That was nothing compared to what is going to happen thanks to what Napster started. Or arguably, was the first one to tap into or prove. This phenomenon is not going to be restricted to an industry. It will fundamentally affect all industries – especially those that have a customer!

Are you going to be affected? Is there opportunity for you? Read on…

Do All Travel Agents go to Heaven?

When was the last time you went to a travel agent? Chances are, you have not been to one in years.

Where did they all go? I am told, they all became real estate agents!

Kidding aside, the story of the apparent demise of the travel agents has a key lesson for intermediaries in this new world order. Let me explain.

The travel agency network was the distribution channel for the travel industry – airlines, hotels etc. used them to sell their “products” to the end customer. The business model was that of the classic retail intermediary: a fee – built into the price - for each product sold. Customers bought from the travel agents because of convenience, service and choice. Over time, relationships developed that are hard, if not impossible to break. Airlines and hotels – the “product manufacturers” - preferred using travel agents because they did not have the relationship with the customers and to avoid getting into a high transaction business that was outside their core competency.

For decades, this model worked. Along came the internet. It was ubiquitous. It provided the capability for transaction processing, including buying tickets etc. Customers loved it because they had unprecedented choice and convenience.

Has the internet made travel agents irrelevant?