In tribute to my long time hero, Steve Jobs, I would like to dedicate this blog post to him.

One of the greatest feat that Steve Jobs had achieved was how he recreated the entire ecosystem for the music industry.  While there are some striking similarity between the Music industry with the Travel industry (that they are both old, distribution channel controls most power), there are of course many differences to keep in mind.  So, what would Steve Jobs do, if he was to put his mind into reinventing the travel industry?

What would Steve Jobs have done if he were to recreate the travel industry?

iPod – the End User Device

The music industry change began with the Apple iPod, the first hard-drive based mp3 player that had people asking, “Why do I need to have 6 GB, when 512 MB is enough?”  At that time, the iPod was certainly NOT the first mp3 player – in fact, Apple was quite a late player into the MP3 device manufacturer.  However, their biggest selling point, 6 GB of space, won out many of the hard core music fans who at that time would at most half filled their iPod.

This provided room to grow.

The Travel Industry:

For the travel industry, the current iOS platform (iPhone, iPod Touch, iPad) provides a hand held device that is very capable of performing any travel-related activities.  From travel booking, researching, to taking photos, to sharing the travel memories, these devices are used.

iTunes - the End User Experience

Along with iPod came iTunes.  It started off as a program that transfers songs from ones’ computer to the iPod.  While it was a buggy program (it still is), it does allow easy synchronization and a way to reliably transfer the contents.  With this device distribution methods ready, people are free to rip out their own CD, as well as download (em hem, Napster) music and put them onto the iPod.

The Travel Industry:

This may be the most crucial piece that is currently missing from Apple’s pipeline, if they do intend to go into travel.  In fact, back in 2010, there was a news story broke out about the iTravel patent.  While it never really made into public eyes, it was nonetheless a very interesting report.

As the app is completely designed in Apple’s hands, designers can make it very user friendly, with performance and data efficiency, as well as practicality in mind.

iTunes Store – The Distribution Channel

The biggest game changer, however, is when Steve Jobs went to each major record label, and ask them to sell their musics PER TRACK and FOR 99 cents.  Both are radical concepts.  A CD typically has 12-18 tracks of songs, and costs around $20.  On a per track cost, it does work out to be about the same price.  The music industry, used to “bundle” a bunch of songs, hit titles, non-hit songs into ONE CD.  Regardless of whether the consumer likes the song or not, he or she will have to buy the entire CD for $20.

The $.99 per track model turned this paradigm upside down.  The hit songs are sold very well, and they are typically charged $0.99.  The not-so-hit songs, however, can even charge higher, some go as high as $1.29.  This caters to “the long tail” and hard core fans of the artists, who would collect every music that has been created by the artist.  By 2010, there were more than 10 Billion tracks available on iTunes, making it the largest single music source, and forever changing not just the music industry, but also media distribution industry such as books, and video shows.

The Travel Industry:

Much like the music industry, the biggest obstacle to recreate the travel industry is to change the mindsets of the distribution channels.  While music industry was entirely consumer focused and hence the mental shift can be purely made from consumer electronics, the travel industry involved a lot more hard cost.

For example, the cost involved to create a music track can range from very little (using a laptop, microphone) to very much (state-of-the-art studio, famous artists, etc) while most of the costs are soft costs.  By contrast, the cost to provide a plane ride is at least the maintenance for the plane, the flight crew, and the fuel.  That’s why for air travel, it is difficult to control.

The opportunity for cheap deals is when the flight / hotel room is almost full, and that the few remaining seats can generate many buzz or to help extract more revenue.

While booking is still mostly done with intermediary (GDS, wholesalers, travel agents, OTAs), or referral sites (Kayak, Google Flights), suppliers are now marketing aggressively to the direct consumers.

The intermediary, at this point, can offer consumers something that direct suppliers can not – the ability to change and modify their itineraries.

Genius – The advisor

Perhaps not many people are familiar with the Genius playlist.  But it really is what a Travel Agent/Advisor do for travel planning.  Genius starts with, “what do you have on your playlist”?  and then go on to suggest songs that are similar in taste.

An experience travel agent/advisor should do just that.

I must also note, that this “advisor” role maybe the weakest of Apple’s offerings in music.  Guessing what people want is never easy, and hence companies like Google build their entire business out of this.  With the reach of reading your email (gmail offering ads), browsing behaviours (google search record will be kept if you are logged in), social interactions (google +), Google has a very good idea of what YOU WANT.

And that’s why Google Flights/Hotel, and the concept of Google Travel is a very scary but potentially lucrative piece of the puzzle.