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its effects. Consider, for example,
the music and movie industries.
New technology has completely,
and very rapidly, changed the
way that movies and music are
purchased and consumed. For the
big movie and music businesses
(and all their associated suppliers
and producers), survival has
required a high level of reinvention
and adaptation.
This reinvention has come in the
form of both new products and new
processes. Product adaptation
involves updates and redesign—
essentially, innovation and
invention. The movie industry has
undergone many transformations
since the early days of black-and-
white moving pictures, or “movies.”
It has reinvented itself through
technology (from adding sound to
creating “impossible” computer-
generated images); marketing
devices, such as monthly access
cards; events, such as outdoor
screenings; and the growth of the
multiplex to multiply visitor
numbers and reduce turnaround
times. The newest product aimed
at luring viewers away from illegal
downloads and back into movie
houses is Stereoscopic-3D—itself a
reinvention of an older idea.
Around the turn of the 21st
century, the music industry was
also struggling because of the drop
in sales of CDs, and began to refocus
on live music and merchandise.
However, both the music and movie
industries found new life through
digitization, such as Apple’s iPod
and iTunes. This revolutionary
combination of product and
process—Apple’s hardware and
software—made legal downloads of
music and movies more attractive
than illegal versions. In 2013 the
Apple iTunes store offered 60,000
movies across 119 countries, and
35 million songs.Innovative methods
Process adaptation involves finding
new ways to do things; it involves
introducing or removing processes.
Competition from online sales and
pirate streaming continue to affect
movie distribution companies such
as Netflix. The response of this
highly popular video streaming
service was to make all the episodes
of one television series (House
of Cards) available for download
simultaneously; the rationale being
that the risk of piracy would be
lower if consumers were able to
legally buy all episodes at once.
For Netflix this bold strategy was
not just a radical new process; it was
also an adaptation of the company’s
entire business model. Still in the
adolescent stages of growth, in 2012
Netflix was primarily an online
streaming service, but for House of
Cards it entered the world of
production. By producing and
distributing, Netflix was able to
capture more profit and gain more
control over content. Netflix did not ❯❯See also: Gaining an edge 32–39 ■ Keep evolving business practice 48–51 ■ Creativity and invention 72–73 ■ Thinking
outside the box 88–89 ■ Changing the game 92–99 ■ Avoiding complacency 194–201
START SMALL, THINK BIG
Excellent companies don’t
believe in excellence—only in
constant improvement
and constant change.
Tom Peters
US business expert (1942–)Product adaptation in the music
industry demonstrates the steady use of
new technology—from gramophone to
vinyl, cassette, CD, minidisc, and MP3
digital music file—as companies have
sought to broaden the market for music.