Thursday, May 28, 2009

Paradigm shifts: Facing the music

The music industry makes an excellent case study of how paradigm shifts occur. They don't occur swiftly and suddenly, as it seems in retrospect, many, many decades later: it's a long agonizing process during which it is not clear whether the status quo will prevail and emerge the winners or whether an entirely new regime will take over, thumping chests over the ashes of their victims. This fight to the death has been going on in the music industry over a long period of time -- perhaps since the beginning, but especially since the coming of the World Wide Web. Throughout its reign, there will always be those who are opposed to a ruling a paradigm and will act as irritants, to be crushed underfoot. But then one or more events occur -- typically a paradigm shift in politics, culture, or more often technology (I'm employing the term broadly, to include such intangible things as language and writing); and then the walls slowly begin to look vulnerable after all. Sometimes the guards are asleep, at other times, gaps begin to appear in the defences. An outright war is initiated and the balance of power keeps shifting back and forth between the ruling paradigm and the challengers. Eventually -- perhaps over decades, or even centuries -- the rulers falter and fall, and then very swiftly, the entire regime is changed. Most people remember only the last days when change occurs rapidly, not the long preceding period during which the regime struggled to keep its attackers at bay.

The music business is finally beginning to cave. And this, surely, is a sign that the end is in sight. New York Times has titled its latest article on the subject, 'Music labels cut friendlier deals with startups.' Apparentlhy, the major music labels are no longer trying to squeeze online music download services out of business. They are desperate to create legitimate alternatives that are under their direct control to both pirate sites as well as Apple's iTunes behemoth. They would do it themselves, except they just don't know how. And besides, they probably face stiff internal resistance to any publishing medium that threatens their existing infrastructure -- as digital publishing would. The music labels are signing their own death warrant for if they don't they will die anyway. It is impossible to stem all piracy. Moreover, customers have become accustomed to buying only the songs they like rather than be forced to buy an entire album -- as the labels have insisted on doing -- in order to listen to the one or two songs that interest them. Music labels are not structured to sell individual songs: their entire business model rests on signing up 'upcoming stars' to develop an entire album which can then be pushed for a higher profit margin than individual good songs.

The problem is, the music business grew fat on artificially erected barriers -- something that they managed to sustain during the reign of the previous technological paradigm. They haven't come to terms with the fact is that the new technological paradigm has made turned them -- as they exist in their current form -- into dinosaurs, on the verge of extinction. I predict that all of the music majors in their current form will fold in under a decade, perhaps five.

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