Greg Baxter, the Australian technologist heading global digital at Citigroup, wanted to capture the serious attention of senior Wall Street colleagues about the threats and opportunities of what he terms the “new information age”.
So he presented Citi executives in New York with a financial analysis of incumbent business models in the music, video, travel and media industries that had been turned upside down by digital disruption.
In the first four years, “old” companies like Blockbuster Video typically lost only about 1.5 per cent annually of traditional business to digital competitors.
Then suddenly an “inflection point” coincided with their revenues dropping off a cliff and migrating to digital alternatives like iTunes, Nextflix and Amazon at a rate of about 6 per cent annually. At such a fast clip, revenues are slashed in half over a decade.