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Last Updated Wednesday August 23 2017 07:23 PM IST

The digital threat to traditional business models

P. Kishore
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The digital threat to traditional business models

The world's largest taxi company owns no vehicles, the largest accommodation provider owns no hotels, and the most valuable retailer has no inventory or warehouses!

This interesting trend bears testimony to the society’s willingness to be receptive and experimental to adopt new technology. Mobile phone applications and other digital marketing initiatives are posing a serious threat to the survival of many of the traditional business models. 

Global hotel majors still remain stunned at the operations of Airbnb, a company which offers cheapest but quality accommodations across the world via a mobile app. The customers can choose from a list of residences, hotels, flats or single rooms as per their need. 

Oyo Rooms, a branded hotel network, founded by young Indian entrepreneur Ritesh Agarwal, offers customers a predictable, affordable and an accessible experience. They advertise hourly rates rather than following a fixed tariff. It helps the operators increase their revenue while providing a fair deal for the customers. The mainstream hotels that do not seem to recognise the trend, will have to pay a heavy price for failing to see the need to break from their old business model. 

Uber, which owns no vehicles, becoming the world’s largest taxi company, and Alibaba emerging as the largest retailer without possessing any inventory, are two good examples of the latest trend. 

The rise and fall of magazines like Playboy is another story. Penthouse, an adult entertainment magazine launched in a bid to challenge the Playboy, was forced to shut its print edition and go all digital. 

Playboy, published from Chicago, was a popular magazine among male readers, especially the youth, till the final years of the last century. The magazine contained articles, literature and interviews that enticed people into serious reading, besides pictures of scantily clad women. However, it was a known secret that the ‘serious readers’ were not the main customers of the magazine that had a proud place in men’s secret stash. 

Debonair and R.K. Karanjia’s Blitz, Indian men’s magazines modelled after Playboy, had also faced similar issues. While Debonair is striving hard to survive, Blitz closed its doors forever several years ago. 

What could be the reason for the fall of these print magazine that endorsed nudity. There is a clear answer. Since pornography and nudity is just one click away, why should people subscribe to magazines like Playboy? With the digital cornucopia of pornography, Playboy was forced to do away with nudity and feature models with glamorous costumes. The policy shift has reportedly helped the magazine boost its online subscription base. 

Playboy founder Hugh Hefner is 89 now. The magazine has shuttered its Chicago offices and relocated the company's headquarters to California. The relics left behind the magazine, including the first issue featuring Marilyn Monroe on cover, published in December 1953, are now displayed at the Chicago History Museum. The circulation of the magazine, which had sold 72 lakh copies in 1972, has come down to just about 8 lakh copies now. 

It is the fate of a magazine, which once published stories by James Baldwin, and its interviews included Vladimir Nabokov, Martin Luther King Jr among others. However, the magazine’s logo of a bow-tie wearing bunny still remain an iconic symbol, making Playboy one of the most sought after merchandise in the world. 

Endnote:  Facebook, the world’s most popular media owner, creates no content. It is the users who come up with engaging contents called posts or status updates, followed by likes, shares and tagging, that eventually fuel never-ending controversies! 

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