What are the similarities and differences between a community-driven product development process and a traditional product development process within a firm?
American Idol.
Fox’s rating giant. From its second season in 2003 to this year’s tenth season, American Idol has earned huge television ratings. The popularity of “Idol” allows Fox to charge more for advertising during Idol than any other show on television. Each week, Americans vote for their favorite performers by calling or texting or voting online (according to Fox, there were more than 72 million votes last week).
The votes not only determine which person will be booted off the show (the person with the lowest number of votes) they indicate to record producers which singers are more likely to sell the most songs. The people that vote on idol are assumed to be the same people that will buy the songs/records. Instead of doing their own search for talent, producers can rely on the Idol “community” to find talent, not only at no cost, but at a profit!
How has that worked? As of May 2008, Nielsen reported that record sales and digital downloads of songs by American Idol contestants surpassed 71 million units. Even William Hung has sold over 350,000 records/downloads.
The people behind the Threadless on-line T-shirt company were smart in using the same model to sell their shirts. People from the Threadless “community” submit designs, people in the Threadless community vote for their favorite, then Threadless produces only the shirts that have received the most votes. Threadless needs no design staff and they don’t have to invest in marketing research. They only produce shirts that have already shown to be popular with their customer base.
