Adapting To The New Reality

You say you want a revolution — and you got it. Now what?The record industry as we know it is fading fast. We haven’t quite reached the stage where selling 423 CDs in one week gets you a Number One record on SoundScan, although we’re moving in that direction.
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But what surprises me the most about the record industry’s rapid slide is that people are surprised. In general, monolithic entities have become democratized over the years, for better or for worse. Computers used to belong exclusively to huge corporations, with IBM, Cray, DEC, and a handful of other companies dominating the industry. Now people can go into a local electronics store and buy the parts to build their own computer.

The telephone industry in the USA used to be controlled by one monopoly, Bell Telephone. Oh sure, it got broken up into smaller subsidiaries, probably for cosmetic reasons more than anything else. But now we have Voice Over Internet Protocols, and Skype, the “killer app” for cheap phone calls. The monolithic post office has been usurped by fax, email, Fed Ex, and UPS. And even electric power distribution is starting to become decentralized, as more people install solar heating and photovoltaic panels that often end up putting power into the grid.

And for music, you no longer need a large corporation to own expensive studios; people can produce hits in bedroom studios. Nor do you need an unwieldy distribution network for physical products, as more songs move electronically via the Internet. From bands giving away CDs in order to score more live gigs, to MySpace, to iTunes and Web pages where people can download music, the music distribution system has turned into a chaotic free-for-all.

When Napster appeared, the record industry had a golden opportunity to dominate online distribution as they did physical distribution simply by going through the door that Napster opened with more clout, more resources, and more access to artists. For whatever reason, they didn’t; now they’re paying the price. It’s not inconceivable that at least some segments of the record industry could re-invent themselves and come up with a model that works in the context of digital distribution in the 21st century. But based on the their past track record, I wouldn’t bet on it.

So in terms of getting your music out into the world, the power has indeed gone to the people. Now the question is: What are we going to do with that power?