Tomorrow Everything Can Change

Entering a new Era, as is the case of the current Digital Era, is not pacific, from the corporate, social, and economic viewpoint, and even at individual level.

The impacts are huge and we will witness profound changes at all levels. Today’s leaders will hardly be the leaders of this new Era. We will witness the crumbling down of companies, and major individual behavioral changes with significant impacts on the consumption of goods and services.

One of the industries in the epicenter of these changes is that of Media and Entertainment that will see the business models undergo changes that will forever change the production, distribution and consumption models.

The change and reorganization processes are always complex and, at the moment, we face the challenge of understanding this new reality.

In the mid-90s, with the explosion of the technological start-ups and market capitalizations around the dot-coms, there was a trend that fed the idea of a radical change that was not possible to explain by the traditional economic models and corporate management logics. It was said that we were in a “New Economy”.

This perception that we might be living a new economical logic that would require new economic models was generated by the fact that we did not understand that new markets were emerging in traditional industries (for example, digital advertising in the Media industry), or even new industries as is the case of the videogames industry.

In 2000, with the collapse of many technological companies caused by their economic non-sustainability, it was clear for everyone that the economic models and management logics remained unchanged and valid.

When everything seemed to be clear, Chris Anderson (editor-in-chief of Wired magazine), set the confusion with two books: The Long Tail (2006), and Free (2009).

The Long Tail is based on the theory that a good produced and distributed digitally has very low costs that allow making it profitable in the long

term. This led to a second theory, according to which abundance will ultimately lead to free products.

The changes we are currently witnessing led to a positive technological shock that generated a productivity increase and the decrease of distribution costs directly impacting price. But, as always, there are no “free lunches”.

Thus, Chris Anderson made some basic mistakes of economic analysis, and ignored the capacity of management and marketing strategies to influence the behavior and consumption of consumers. He also forgot

the continuous emergence of new markets/ecosystems and new Media consumption devices.

His theories have been criticized in the academic community, namely by Anita Elberse, Professor at Harvard Business School, who wrote one of the most assertive critics.

For managers and economists the challenges are increasingly high. Everyday new realities emerge at an increasingly accelerated pace. This book intends to reflect on the challenges and realities that we live today.

But tomorrow everything can change.