130 years old and innovating

After writing about introvert and extrovert organizations, I’ve been challenged to come up with more examples:

Imagine an organization that is more than 100 years old. It has a demanding and highly conscious customer base, who expect nothing but the best. Which is what they get, with live deliveries on a consistently superior quality level, multiple times a month, with constant alternation of leadership.

For 130 years.

This sounds more like an extremely steady delivery organization than an innovative one. In fact, any organization who’s even remotely resembling such seemingly impossible behavior is likely to resist anything new. Never change a winning team, as they say.

Getting closer with classical music

Getting closer with classical music

But the Berlin Philharmonic does the exact opposite.

There are concerns about the future of classical music, which constitutes a vast portion of the repertoire of a symphony orchestra such as the Berlin Philharmonic: Whenever I go to a classical concert, I see a lot of white hair in the audience. Professional artists and orchestras know that if younger generations fail to take any interest in classical music, they will inevitably run out of customers. Hence, you could argue popular music with its light-weight distribution channels (like streaming), demystified events and appeared newness is disrupting classical music.

The revenue of a symphony orchestra comes from selling concert tickets and albums (they also receive support from public and private donors, but to me that doesn’t count as revenue). So when an orchestrata starts broadcasting its concerts live, and offers a video-on-demand concert archive, and distribute this content directly into our homes, the Berlin Philharmonic is most likely challenging their existing business.

Whenever I hear about such business cannibalism, I smell an innovation. So I decided to dig more into what new the Berliners have in their suitcase.

There's more to VOD than Netflix

There’s more to VOD than Netflix

Could it be, they’ve realized the problem with classical music isn’t the actual music? Younger people have neither the time nor the desire to spend evenings at old-fashioned concert venues. They expect to be instantly entertained, they want to be interactive, and they don’t understand the many unwritten laws and traditions associated with classical music. Older people may like the traditions but they don’t necessarily want to travel to Berlin (or downtown to their local orchestra for that matter) just to hear a concert. They may have invested in hi fi-systems that render the old stereo vinyls slightly monotonous (yes, there is a nostalgia to phonograph records, but Wagner on your 42″ with surround sound also has its allure):

Alas, why not experience the whole classical thing with an app?

After launching Digital Concert Hall in 2009, the Berlin Philharmonic has acquired over 280.000 users in over a 100 countries. As of april 2013 they had 14.000 paying subscribers. They offer subscription video on demand (SVOD) at a Netflix-ish price level, and through cooperation with Sony they are accessible on smart TVs, iPad, PCs and more. Remotely controlled high-definition cameras mounted on the walls in the concert hall and skilled producers make broadcast shows as if multiple persons were crawling around the orchestra with cameras. Through sponsors like Deutsche Bank, they make the service accessible in school and education. (Compared to the torture of cassette players back in my school days, I would think that seeing The Magic Flute in HD makes the music slightly more attractive to school children, and anyone else for that matter.)

The Berlin Philharmonic successfully addresses user needs you will only understand with a cross-organizational focus on your customers. Imagine the many skeptics that could terminate such initiative even before it starts, by arguing: “We’re about to give up our core product, our reputation and our sound by marginalizing ourselves into an app”.

You need to unite, before you can create anything unique, and you need to look beyond yourself before you can create anything of value to others. This is extrovert behavior.

About to gift someone with an awesome HiFi system?

The Gift to anyone with a decent Hi Fi system.

Instead of focusing on their own pain, The Berlin Philharmonic turned to their audience and realized: We don’t have to change our core product – we need to do something with the packaging. They came out with same sound, different wrapping, and hence solved their own problems by focusing on the problems of their customers. For being an old organization with an established culture, it is a particularly interesting example of unexpected organizational behavior: I rather expect they will be around, physically as well as digitally, for a long time to come.

This post is based on a few public case studies from the organization in question, and my own exploration of their innovations. If I succeed in getting a case interview with the entrepreneurs behind the Digital Concert Hall, I will post more on this topic.

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