A movie that I want to watch is going to be released in a streaming format next week. I am going to watch it as soon as it is released. I might watch it on my TV. Or maybe on my home computer or a laptop. I might even watch part of it on my telephone.
When I was in high school (back in the Stone Age, in 1976), the VHS tape was invented. That technology was “disruptive”, although we didn’t call it that at the time. We knew it was revolutionary. People lined up at video-rental stores, like my local West Coast Video store.
In 1995, the DVD was invented. People stopped watching VHS tapes, and started watching DVDs.
In 2006, Amazon launched video streaming.
“Renting a video” was a revolutionary concept in 1976. It absolutely revolutionized home entertainment. Now I don’t know if there are any video rental stores in existence. I am amazed when a disruptive technology is disrupted out of existence.
Which brings me to cars. I am fascinated by cars. I’ve written about this before (“Take Me To Work, Siri”). This is a part of our society that is ripe for disruption.
We spend a lot of time and money on cars. I did a search on “how much gas did America use last year” and the result was 143 billion gallons. At $2.50 a gallon, that works out to be about $360 billion per year. Add in $570 billion for new car purchases last year, and our expenditures for cars every year approaches $1 trillion. And that doesn’t include maintenance and tolls.
The largest profession in the United States (by number of people who perform the work) is truck driver. 1.7 million people drive trucks for a living. That is a lot of salaries and benefits. And many more people drive taxis and limousines.
One sign of disruption is that Ford Motor Company (a profitable company) recently fired its CEO and announced the layoff of 10% of its global workforce.
Another sign of disruption is that the largest American car company by market cap (stock market size) is no longer GM or Ford. It is now Tesla, a company that doesn’t make very many cars. At least not yet.
Other signs of disruption include the existence of cars that can park themselves (at least ten of the 2016 and 2017 models can do this), electric cars (at least 16 models now available), and there is now testing of self-driving cars. Mapping software that used to require special devices and subscriptions is now included on every smartphone. Cars no longer need to stop at tollbooths.
Given that there are now fully electric cars, self-parking cars, sophisticated mapping software, and automatic payment at tollbooths, it is only a matter of time until someone puts all of the pieces together.
Someone will figure out how to do it. This isn’t just videotapes and home entertainment.
There is a trillion dollars a year riding on this.