The New Music Business


Mashable posted the above graph earlier today outlining what would have happened if peer-to-peer file sharing services such as Napster, Morpheus, LimeWire, Vuze, etc had never existed. Given the above chart, the support seems to be in the music industry's favor.

They claim a loss of $55 billion since the inception of Napster. They are suing LimeWire right now for a loss of income (and thus a decline of the business model) and if guilty, LimeWire is going to owe Sony and Warner in the billions of dollars. Billions, with a "B" as Kevin O'Leary says.

This story reminds me of when Bon Jovi blamed Steve Jobs as having single-handedly killed the music industry. If anything (given the chart above), Steve Jobs helped give the industry a fighting chance.

To me, this brings up several questions regarding the role of technological innovation in the production of content.

Are the file sharing companies responsible for the dying business model? Or is the music industry's refusal to move forward, with thoughts and progression technologically, to blame?

I'm not quite sure of the answer here. There is no doubt in my mind that the file sharing services have hurt the industry, but digital music was becoming more relevant with the iPod and all of a sudden carrying your entire CD collection around with you (having to switch cds in and out) seemed impractical. The music companies were against this entire process because it placed music files into places where they could not only be shared (no one has ever borrowed someone else's cd right?) but edited, morphed, and uploaded to sites like YouTube.

It made the music...interactive.

Napster (and those like it) created a sense in America that you didn't have to pay for content. iTunes has successfully changed that. But, they neglected the idea of an album to do it.

So, in a sense, Steve Jobs did ruin the music business (because the entire industry was based upon selling $15 cds that people bought to hear 2 or three songs).

Or, if you are me, you see it as progress of technology blowing open a lucrative business model that was based off selling things to people that they didn't want, and then jacking up the price.

It would be as if the grocery store told you you could only buy the good bananas if you bought a group of them (of which only two were really enticing) and they charged you $15 for the group. If people could find a way to get the bananas one at a time, they would (even if it meant stealing). Either that or the banana business would go downhill.

And, that, is why bananas are sold by what you choose, by the weight. You only pay for what you like.

If the music industry would wake up to this reality, their business model would change and again be able to afford to stay in business and grow. I love the music industry, so I hope they do.

Sometimes things change. You must change with it or it will redefine you. And then you die.