The music industry has been a source of lore about and examples of digital disruption for years now. But instead of concentrating on the traditional culprits like ham-handed record executives and overly aggressive copyright enforcement tactics, I think a singular focus of disruption — which illustrates how the disruption occurred and what was disrupted — provides more insights still.
From Napster to iTunes to Spotify, the disruption in the music industry has been about reinventing the retail experience. This hews to the strict definition of disruptive technology, which requires that disruption find a cheaper and easier way to accomplish the same thing that used to be harder and more expensive to do.
Tower Records fell. Virgin Records fled New York first, then across the US overall. Local music stores folded. The HMV in the Shibuya shopping area in Tokyo closed just this past August.
Disruption of the music retailer has been the consistent story.
Napster attempted to take disruption of retail music all the way, but copyright prevented its approach from sticking. iTunes reconciled disruption of the store with rights, and has been hugely successful. And Spotify is attempting to move the store into the cloud.
Of course, when the retailer is disrupted, new bargains emerge. In the case of digital music, single-song purchases have changed the economics of music publishing a great deal.
But is music retailing actually better than it was?
A recent article from the Music Void discusses how struggling labels and lack of new labels will likely mean a plunge in creativity around how music is created, marketed, and sold. As Wayne Rosso writes:
. . . the record labels have now put themselves in the position of having to depend on the bulk of their digital sales from companies that actually couldn’t care less about selling music: Apple, Amazon, and now Google. These behemoths have huge revenues, 99.9% of which are not related to digital music sales.
The difference for me comes back to the cultural shifts from the craft of making a product to the process of delivering content. As I tried to express earlier this week, when new anchoring communities and trust markets exist, one side-effect is that our ability to craft experiences for users diminishes, and we become content delivery services. We are no longer the retailers of information we once were. In fact, we barely participate in the retail value chain.
That’s what’s happened to music.
For music, my anchoring community used to be the local record store, a retailer with a carefully crafted experience meant to make me want to visit, buy music, enjoy music, and enter the music culture. It was a value chain of the music community. What was on the wall of new releases often led me to explore new artists. The t-shirts, collectibles, magazines, and staff all added to the experience of anchoring in a music community. In addition, I could explore through tactile and immersive experiences — from cover art to song titles to heft and fold of paperboard, making an LP sleeve was craft particular to music. Nobody else made record albums. They were distinctive in artwork, size, and feel.
Now, the interface for music is pretty much like the interface for books and the interface for online video — the “play” or “advance” icons, distance until completed, the poor attempts to recreate cover art. Merchandising, retailing, and the value chain associated with both are now out of the record companies’ hands. Apple, Amazon, and soon Google will create the retail experience and own the retail value chain, including the anchoring communities and trust markets. (Apple’s Ping comes to mind.)
Is publishing headed down a similar road, shifting from distinctive, tactile retailers of information and becoming content providers rather than product creators?
Or are we already on the other side of that choice, and just waiting for the results to play out?