The Great Unbundling: Google, Uber, HBO as the “disrupters”

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Google and Uber are the latest tech companies to disrupt how services are provided. "Unbundling" describes how mobile technologies and social media are affecting the products offered by traditional businesses.

Google as a mobile phone company

Google's "Project Fi" is offering mobile phone services on its Nexus phones. It launches the web search engine into the mobile phone industry with a competitively priced offering: $20 per month for phone and texts and another $10 for data services.

Significantly, customers only pay for the data that they use, so it breaks apart the bundled mobile packages offered by traditional providers like Sprint and T-Mobile.

Google is using their infrastructure and targeting just their core customers, so it's not a big venture but a notable one as it "disrupts" the standard offerings with an unbundled package. Usage-based pricing has the potential to disrupt the industry.

Uber as a shopping service

Similarly, the co-founder of Uber is taking on e-commerce giants, Amazon and eBay, with the Operator app.

The concierge service offered via the app is a combination of human expertise and algorithms to let people replace say a pair of shoes at the touch of a button.

Operator bets that the human touch will make its service superior to the current e-commerce firms and is a standalone service that doesn't require an infrastructure of products since it will partner with retailers.

The service takes aim at Amazon whose Dash button to re-order washing powder at the touch of a button, which I've written about before, as an example of the other big trend which is the Internet of Things.

Operator believes that for clothing and home décor, having a human working in conjunction with the algorithms that are the industry norm will be a more appealing service.

Of course, that is also more expensive and relies on retailers having enough workers to answer queries from the app. Still, Uber drivers already deliver food so could also do so for these goods so a speedier delivery could be expected as compared with the postal services of e-commerce sites.

In any case, it is a disruptive force in the online/offline retail industry that unbundles the way that business is done, by combining the algorithms offered by the former with the human service of the latter.

Future of TV is online?

Perhaps the most notable example of the unbundling of services, and potentially the most disruptive, is found in the media industry.

We increasingly live in an on demand world. We watch TV shows and news videos when we want, for instance.

So, HBO has launched a service called HBO Now which allows subscribers to select the channels that they want to watch in a streaming service initially offered on Apple TV.

It unbundles the cable packages where consumers have had to buy packages of channels, and disrupts the traditional cable and satellite operators like Time Warner Cable.

It compounds the challenge confronting these media companies as customers increasingly watch shows online and are moving away from subscription TV.

It's not the only one. Sony and Showtime are jumping in with standalone versions of their premium channels to be viewed online. CBS is also offering a paid streaming service for its shows.

The rapid growth of Netflix, which also offers original programming only online, to a record 62 million subscribers is a prominent example.

By comparison, there are about 100 million pay-TV homes in the U.S. But, U.S. households are "cutting the cord" as the numbers of pay TV subscribers have been falling in the past couple of years. America's largest cable company, Comcast, may even have more internet than TV subscribers as the former surged to 22 million while the latter declines.

On demand world

When I interviewed Steve Forbes, the media mogul, he predicted that the only thing that we will watch live is sports.

In an on demand world, we would choose and select the programmes that we want to watch, when we want to watch them. We are increasingly being able to pay just for what we select, and not what is selected for us.

That's a fundamental challenge to traditional media companies.

The great unbundling may well prove to be the great disrupter to traditional businesses.

For consumers, though, paying just for the services that we want, usually for a lower price than the bundled alternative, could mean that we end up as the winners from the disruptive force of tech companies.

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