When you compare my earlier blog with this one, it is obvious how much has changed. Every day, it gets easier to produce content, to share it and to react to content others produce. The beauty, or horror, of it is that industry after industry faces disruptive attacks to its dominant business models.
Established businesses are struggling with the consequences. The music industry in particular is turned upside down. Severe pressure on their core business has forced companies to launch a flurry of new initiatives. Despite this, most are bust or sold. Will this happen to your company too?
UK Music, the umbrella body that lobbies for the industry as a whole, estimates
that music contributed at least £5 billion to the country’s economy last year,
with £1.3 billion coming from exports. While this makes the country second only
to the U.S. as a source of repertoire, 81% of the country’s music companies now
employ fewer than five people. The primary reason for this shift from the traditional model, in which giant
record labels controlled every aspect of a band’s career, is technology. While
online music piracy has greatly reduced the income from album and CD sales, the
same phenomenon has actually increased the market for music as a whole.
Is this what the future business landscape looks like? Will we all be self-employed ‘orchestrators’ that integrate all kinds of suppliers in customized combinations? Some firms certainly think so.
This does not bode well for established firms, which can compare themselves to the ‘giant record labels’ in the WSJ quote. Later in the article, musician (and producer, naturally) Craig Potter (Elbow) raises the question whether labels will even exist in five years time.
Will your company still be here in five years time?
- UK music industry revenue falls £189m (guardian.co.uk)
- UK Music Industry ‘Hit By Funding Failures’ (news.sky.com)
- Music Industry Being ‘Failed’ By Government (news.sky.com)
- Sirius XM Wants To Deal Directly With Record Labels (siriusbuzz.com)
- Music patronage: our generous benefactors (guardian.co.uk)
- Diversity, Not Just Digital Sales, Will Save the Recording Industry (musicbusinessheretic.wordpress.com)
- Century Media Responds to Spotify Uproar: Vince Responds to Century Media (metalsucks.net)
- UK music industry revenue drops £190m in 2010 (thenextweb.com)