Large, conglomerated titans ruling over a highly influential communication medium suddenly thrown into flux (replete with plummeting revenues) by the advent of technology. Sound familiar?
It’s what is happening to the print news industry right now – but it happened to the music industry nearly a decade ago. I’ve been thinking about the parallels between the way the music industry responded to the challenge to its business model and how the newspapers are reacting now and it’s eerie to see the similarities.
- Resting on Their Laurels: As the newspapers built their profits to soaring heights relying on classified ad sales and increasing the share of their profits that came from advertising, so too the music industry reached its zenith with over-produced pop schlock. Increased profits moved the leadership of both music and news away from serving consumers and focusing on the quality of the product and increased the temptation to cut corners and aim for the middle. (This cannibalizing strategy tends to go into overdrive when revenues begin to fall – and it hastened the decline in both cases).
- Neglecting to Innovate: The record labels sat around for years ignoring the growing demand for the .mp3 format (which held obvious advantages over CDs). As a result, consumers were left up to create their own world; and create they did – completely leaving the industry out of the loop. My first Diamond Rio 300 player held only 8 songs, but it played without skipping, weighed almost nothing, and lasted FOREVER on a single AA battery. It was worth having to rip my own CDs to access those advantages and be able to make my own “mixtape” quickly and easily on my computer. What has the newspaper industry innovated in the last 10 years? (Seriously – I’m not trying to be a dick, but if you can think of something – let me know).
- Trying to Stifle Development With Brute Force: Rupert Murdoch’s proposal to lock Newscorp’s content behind paywalls and the Associated Press’ efforts to sue aggregators into compliance smack of the draconian efforts by the music industry to fix prices, sue file-sharing platforms into bankruptcy, and lock music away from consumers with Digital Rights Management software. I anticipate they’ll be just as (in)effective.
To be fair, I’m painting with a broad brush. There are certainly exceptions to these generalizations – but not many. These are the dangers of refusing to accept the new scale businesses can effectively operate at, under-prioritizing creativity and treating one’s audiences as dollar signs.