The dawn of data or what will save the music industry this time
In a couple of previous posts we’ve looked at Rolling Stone editor Steve Knopper’s excellent book “Appetite for self-destruction – the spectacular crash of the record industry in the digital age” (2009). Previously we’ve seen how the music industry recovered after disco died and how the industry might have brought on its own downfall by looking at short term profits and focusing too much on hits.
In his final chapter Knopper looks toward the future and even though advice ages quickly he has some interesting thoughts on what the future will hold for the music industry.
… Everything has changed. Thriller won’t save the record business this time. Thinking differently will. And unless Morris [Sony Music Entertainment CEO Doug Morris, former president of Universal Music Group] and his colleagues stop fiercely protecting the old model of selling pieces of vinyl or plastic to as many consumers as possible and start hiring digital music executives trained to build the next Napster or the next iTunes or the next Long Tail service or the next music-equipped cell phone or whatever particular shape the future might take, the labels will become and anachronism.
The biggest ones may survive, by manufacturing a few Beyoncé-level, 2- or 3-million-copy blockbusters every year. They may still make money licensing their catalogues to movies, commercials, TV shows, and video games. But if they can’t figure out, soon, how to make greater profits via digital downloads or other means, struggling majors like EMI may have to sell their lucrative catalogues to other companies.
Maybe these new companies will follow Terry McBride’s prescription: Stop messing around with any type of digital rights management, stop suing customers, drastically reduce digital-track prices, cut unnecessary overhead like warehouses and crates, and thereby return to 1980s-style profits. It’s also possible that major labels such as Universal or Warner will come to this conclusion on their own – the Amazon MP3 Store and MySpace music are tiny steps in this direction. Maybe, some in the business suggest, Apple or Microsoft or some other visionary company with money to burn will buy up these assets and, finally, start running the major record labels as high-tech content houses.
But continuing to build an entire business that relies on another Thriller is simply not viable. Hits are getting smaller and smaller, and they just don’t have the healing poser they had in 1982.
Find out more what data can do for the music industry at the next Music 4.5 event Rich Data on the 19th of November.
Image via Swanksalot.