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?
11 Thoughts on "Is the Music Industry’s Recent Past Still Instructive?"
It is becoming increasingly difficult to draw parallels between the two industries, particularly if one concentrates on scholarly publishing. The music industry has been largely supplanted as far as any value add they can provide to a musician. They used to serve as loan officers (providing extremely poor terms for the musicians on the money lent) and as marketers, holding the keys to admittance to the few arenas for exposure (mainstream radio, video, etc.). Those days are over, and the question for publishers has to be asked, are we just as obsolete, or do we add value?
One thing in our favor is that unlike the music companies, our artists generally like us and appreciate the service we provide. The music industry has a long history of screwing over musicians, cheating them out of royalties, and such. It’s interesting that while the anti-copyright online crowd lumps publishers in with record companies, actual authors (including many strong “copy-left” advocates like Cory Doctorow) see publishers more as valued partners. Perhaps the big difference is that publishers cover the costs of editing/production, expenses which the artist is not expected to pay back as a loan. Author advances are also not turned into debt for the artist as music advances are. Publishers act more as investors than as loan agents.
You’re right in that the dissolution of the retail chain does have some similarities. One thing we’ve talked about elsewhere is the loss of browsing and serendipity that’s coming from this. I rarely find books on Amazon or B&N by stumbling across them, I’m almost always doing a directed search. This is very different from wandering through a bookstore and looking at the shelves, or digging through the bin at a record store. Social recommendation systems are attempting to fill this void, but so far seem unable to provide a good match for an individual’s taste.
The article you link to sounds somewhat bitter–the founder of Grokster whining that if only everyone had used his business things would be all sunshine and unicorns. I fail to see how Grokster as a gatekeeper would be any different from Apple or Amazon. But he is right on one point, “Nobody’s going to pay Google $25 a year to store their music in a cloud.” Sounds like double-dipping to me, buy the music, then pay to access it?
I agree, the guy’s bitter, and the comments on his post call him out as such. But he has some points worth pondering.
Social recommendation has to start somewhere — somebody has to try something different and start word of mouth. If we’re all incestuous, and all our ideas and influences are essentially first-cousins, what kind of diversity can we expect?
True, it’s early days, but I wonder if we’re training people to shop in a different way. By the time recommendation works well, how ingrained will it be for people to just go to the site and search for a specific product, rather than window shopping?
Marketing is so fragmented.
Our local chain in Mass and New England–Newbury Comics–has always reinvented itself and remained viable during the past 25 or so years as their Toweer then Virgin then HMV and other local stores disappeared.
They started with comics and are more or less pop culture stores but for the better part of their existence and even now–when folks think music artifact version–this is where they go.
In recent years lots of used CDs and video, but also new vinyl, band appearances, in- store events. They are unique in this.
Though the image is hip and young–they have been around long enough now that in some of their suburban stores I see parents shopping with kids tagging along. I know folks in their sixties and seventies who go there to buy used CDs. Once I saw a grandfather–the kids perusing the merchandise while he had a sales assoc read him the fine print on the back of a CD and she was totally patient. I was in another aisle and could hear but not see her, but she may have been pierced and or tatooed but the service was still friendly and patient with the customer. Stores are geared toward young folks but I have not heard of middle aged or older folks being uncomfortable there. They also carry novelties games books all kinds of stuff.
I was in the old music business for over 2 decades. They didn’t want the CD, they didn’t want VCRs, They didn’t want MTV, BET, or VH1. Don’t worry, by the time we land on Mars they’ll come around. What’s funny is they’re not listening to anyone but themselves and their lawyers. Pray for them, for they don’t have a clue!
One effect of changes in the music industry is that now more than ever music becomes a driver for ticket sales to concerts and purchase of paraphernalia, on the model that The Grateful Dead pioneered (and that has been used ad nauseum by the copyleft as a demonstation of how giving away content can be both liberating and financially remunerative). This unfortunately limits the choices that artists have. Steeley Dan, I understand, preferred to make its music in the studio and not do much touring; that option has now become much less viable. Is there a parallel here with books? Cory Doctorow has made much of giving away his content as a means of driving print sales. But will this work for most authors of scholarly works? Will authors in general need to go “on tour” to earn their money (or, for scholarly authors, increase their reputations so that they can receive promotions that come with increased salaries)? One can imagine this working for major public intellectuals, who already command high prices on the lecture circuit, but what about the author of very specialized works on esoteric topics?—Sandy Thatcher
Helienne Lindvall recently had an editorial in The Guardian shredding Doctorow and his cohorts on this very subject recently.
In fairness, Doctorow – who is also an author of science fiction – is not the only person demanding more in an hour than what an average professional musician makes in a year, peddling a utopian, and some would say fictional, business model to increasingly desperate music and media companies.
Doctorow wrote a fairly scathing response.
“It’s unfortunate that Lindvall didn’t bother to check her facts.”
You forgot cassettes–the first big threat–that I can think of–but then wasn’t there also a worry that TV would keep folks from attending sports events.
I wish TV was still “wireless”.
A friend used to live in a neighborhood built in the early days of radio–in town they refered to it as the Radio Section. Homebuyers received a free radio.
Radio and radio audiences are so segmented. I’m not the typical sportsradio demographic, but I like that their audience (more female than it used to be) is much more diverse socially and economically and I like that variety. No one believes I listen to them!