News

[Gabby =]]

Understanding The Decline And Fall Of The Major Record Labels
         

There's a fascinating, and well sourced, editorial over at Hypebot by Kyle Bylin, suggesting why the major record labels have had so much trouble adapting to these changing times.  Bylin argues, convincingly, that a big part of the problem was that as the record labels got bigger and bigger, they focused solely on the "music as commerce" side of things, ignoring the role of "music as culture."  Obviously, music as commerce is an important part of the music business, but if you ignore the cultural importance of music (except, of course, when lobbying the government for more protections) you miss what's actually happening in the marketplace: how people are connecting with the music, and what they're doing (and want to do) with the music.  Here's a snippet:

As the record industry moved through this stage there was a decline in learning orientation -- in learning what fans actually wanted -- both in terms of how they consumed music and what they were willing to pay for.  So to, they began to discount the role that luck played in their success, to assume that the mass-marketing successes that occurred near the end the CD boom, which sold 3-4 million copies, applied to the natural laws of the universe, rather than that of a relatively short-lived phenomenon.  This addiction to blockbuster artists is what characterizes the second stage of decline, which Collin's deemed The Undisciplined Pursuit of More.  Here, the record industry started out on an unsustainable quest, and, because of their huge successes, they were pressured to grow.


Having reached the peak of the CD boom in 1999, the record industry had become a nearly $15-billion-a-year juggernaut, but under the pressure for more growth they collapsed, and, in the process, a vicious cycle of expectations had been set that strained the artists, the fans, the culture, and their systems to the point of breaking.  Since record industry was unable to deliver new music with "consistent tactical excellence," they began to fray at the edges.  Disruptive technologies were released, an epidemic of file-sharing proceeded, and, at this critical juncture, vested interests of music executives struggled and competed to achieve repetitive consumption through obsolescence.  But these executives were too late, as the record industry, by externalizing the blame for their decline in sales, had already started to show symptoms of stage three, Denial of Risk and Peril.

Music executives began discounting negative data, amplifying positive data, and putting a positive spin on ambiguous data.  In stage three, Collin's argues that those in power start to blame external factors for setbacks -- "or otherwise explain away the data" -- rather than accepting responsibility and confronting "the frightening reality that their enterprise may be in serious trouble."  Right away, the Internet and file-sharing became easy scapegoats for the decline in sales that the record industry faced.

There's nothing all that surprising in the essay, but it's nicely written and explained.  Well worth reading the whole thing.Permalink | Comments | Email This Story
 



 

         

http://techdirt.com/artic...20091210/0529417288.shtml