With the Grammy Awards on tonight featuring some truly great talent and with the rest just incredible branding and fashion, it’s time for my semi-quarterly takedown and challenge to what was once my industry. I am at my core an artist who likes to perform and teach. That’s why business entrepreneurship and business coaching speaks to me. However, I am an artist that hasn’t bought a CD OR purchased an iTunes song in 6 years. The music industry lost a customer. Why?
Think of any business that sells a product or a service product. How can they survive when their customer stops buying? TomTom, the ingenious navigation hardware that we all bought and used… that is until phone makers started placing them for FREE in our phones. Goodbye TomTom! Now they’ve actually innovated other products quite well to stay in business and more on that here. Anyway, Polaroid, Blockbuster and the list of all the companies that were destroyed because of innovation is getting longer and longer. Innovation is that hand that giveth and taketh away!
Look no further than the music industry, the (now) handful of companies that create products out of artists music and use their own distribution chains to sell it and market it, to be up next. These guys and gals in suits that make the decisions of the business, initially failed to see how resistance to innovation almost killed their business. They fought back against the internet usage of their property. Initially it was probably best from a copyright and a trademark point of view but they failed to see the power of how fast the revolution was changing the BUSINESS. They were busy in the courts (still are) and they had the illusionary comfort of their model and how THEY would win because it was “stealing”. They failed to see any opportunity with it. Their illusion that their CD product would keep their revenue safe for years or the unrealistic vision somehow that people would pay for a virtual CD almost killed them. Thanks to artist innovation, streaming and iTunes-like products they are making a comeback. The industry has a long way to go- revenue is still way down.
The industry experienced a severe downturn with revenues plunging in 2009 50% to 9 billion and only recently getting back to $15 billion in 2015 thanks to the same technology that almost destroyed them. In fact the 3% growth it experienced last year was the largest increase in almost 20 years.
What make the music relevant aren’t the companies that traditionally monopolized the industry or the greed that we are familiar with, it’s the resilience of the artists that make the music and the people that consume it. Music will always be a part of our lives but how? When will the next revolution be? How will a whole industry adapt?
Better question here is how can you take the lesson of innovation that brought down the giants of an industry, ones who were comfortable in the illusion of the lasting identity they had in their product, ones who scoffed at the notion that they would be brought down by a simple idea. How will you apply this lesson to your business? To your product? Will you look for change in the world and embrace the change? Even better, look at the world around your business… all the change around your business that it’s not taking advantage of. Will you incorporate new marketing tactics to your business or still use the old world marketing tactics? For instance, an astonishing almost half of US businesses DO NOT HAVE websites. How much business are they losing by not simply being on the web? How can they innovate by resisting the fear that is holding them back? Maybe they had a business than sold sneakers and now Amazon is crushing their business. They are still holding on to the old world brick and mortar model and not taking the initiative to make bold steps forward.
Where do you stand? Where does your business stand? Will your business be around when innovation is the hand that take the away?