Time to Face the Music

I'm taking a break from writing on the fate of print for a while, because frankly, I've run out of words to describe "dismal, bleak, futile." Best give poor Thesaurus -- and publishers -- a break. (Mein Gott! With what their futures hold we best just pass out razor blades to the poor blokes and let them be done. Ooh, very bad joke: What's black and white and red all over ...)

In any event, let's focus on another victim of this century's Creative Destruction. That was the incongruous concept made popular by 20th Century Economist Joseph Schumpeter who trumpeted that innovation is the force that sustains long-term economic growth. The downside, he admitted, is that some established companies that enjoyed some degree of monopoly power might find their values … diminished.

The Internet surely would have been Schumpeter’s idea of a Creative Destructor, as it – and its offspring of innovations have impacted every conceivable sector: retail, music, media and business information, to name but a few. All of these industries have found that shifting from a physical world (CDs, stores and print products) to a digital one has been made so much more complicated by the likes of Google, MSN, Yahoo and user-generated sites like YouTube, P2P downloading, FaceBook and Flickr. Listen to music executives bemoan the sharing of music – and you might forget that the industry has grown to $130B!

The challenge has been, ahem, to the middle men. The Internet formed a conduit between the creator of music and the consumers bypassing the Big Four Labels. Their Sturm und Drang regarding 21st Century musical rationalism would be amusing and if not for the draconian measures they have taken to ensure their monopoly. In case you missed it, what with the tanking of the newspaper industry, the Titanic voyage of the finanical industry, and the intense pressure on all of us to jumpstart the economy by doing massive holiday shopping, the RIAA decided, last month, to end its reign of terror on 13-year olds. Yes, it has decided that it would partner with the ISPs to go after music pirates. More on that when I parse through the legal language.

In the meantime, what does this mean to the music industry? Well, probably that some of the overpaid suits at the Big Four will now be let go, as less self-important people are needed to support the dying medium of CDs, which really, if you think about it is nothing more than a container. This unbundling of content, selling the parts for less than the whole, but where the sum of them exceeds it, is playing quite favorably with kids. Decontainerizing and unbundling content has meant new life for old tunes. Because for all the hand-wringing the music industry has never been healthier!

Yes, yes, sales of CDs are down -- but that doesn't mean interest in music is down. The problem is, the measurement metric has become obsolete. It would be as if we measured interest in transportation by the number of people who owned horses. The demand is, as in print, to put the content into a mutable format so that it can be available in any container an individual wanted (and to figure out how to charge for that service). Music itself has never been more ubiquitous. From iPods, to ringtones, to the music in online games -- music is vivacissimo!

The numbers are astounding: More than 45 billion downloads (albeit 95 percent illegal, still 45 billion!!). Last year's concert sales actually rose! At a time when the average ticket price was over $65. Too, how else to explain the interest in a 25-year old heavy metal band? AC/DC, which warrants its own channel on Sirius XM Radio, is one of my 10-year old's favorite bands. I know, because my 10-year old flicks to that channel in our car. And it hit me, that Guitar Hero introduced this classic metal band to a whole new generation.

Yes, the inustry is challenged: the measurement metric is obsolete, the business model is evolving, and sartorial executives can network with outplaced bankers. But clearly, the band plays on.