The Death of the Record Label Industry

I imagine if blogging was around back in 1999 (were they?), there would have been a few posts with the exact title of this one. They would have surfaced very soon after Napster unveiled itself on an unsuspecting public. Napster would have rocketed throughout the blogosphere being proclaimed as a 'revolutionary service heralding the end of the music industry as we know it'. Record industry types would have scoffed at the suggestion, and gone back to their powdery white mirrors.

Fast forward to 2007 and those record industry types would still be in the same situation they are in today, so i guess the moral of the story is: technological change is inevitable.

Record labels are in a quandary right now. It was one of the first highly visible industries to feel the effects of that killer disruptive technology, digitalisation, and it continues to feel those effects today. File sharing and peer to peer continue to run riot, and now bands, just like consumers, are more empowered than ever, and have the ability to distribute their music and market themselves globally, without the need for a record label. I believe the options are now so comprehensive, that in a couple of years time, the record label industry as we know it will cease to exist.

I'm so confident of this, i have even started a countdown to the death of the record label industry as we know it. See below:

I have also placed it in the bottom right hand corner of my website, in my widget panel, where it shall stay until such day as i am proven wrong.

So why do i think it will die a humble death then?

In general terms, i believe that web 2.0 is empowering bands or music groups to distribute their music and market themselves like never before. To be more specific, i feel applications like Indiestore and Blastmymusic (please add more into the comments below if you know of others, these are just the two i've found with my limited research budget ;) ) that enable a band, and their fans, to sell music via their website, myspace or blog, will empower bands like never before to distribute music across the internet and keep the lions share of the money for themselves.

Both these services offer a widget which makes it very easy for anyone with limited knowledge of html to insert a promotional store onto their website. This means a band can sell their music via their own website, and a band's fans can do the same. This creates an army of loyal sales agents for each band, expanding their reach. There are numerous other 'outlets' bands can sell their music through as well, Itunes of course being one, and another outlet will be via Myspace itself, who have announced recently they will allow unsigned bands to sell music via their myspace pages. With 106 million users, myspace will certainly challenge the dominance of Itunes.

Marketing will be easy. Bands have Youtube, where recently one band, OkGo, has won an award for their music video which has been seen over 14 million times. Myspace is a double whammy in that its a great place to market music and soon it will be a great place to sell it. Radio DJs in the future will become more like editors and choose what music they play, rather than pandering to the record labels. And music discovery services like Pandora, charts and social music services will aid in the exposure process.

So where do record labels fit in that process? They don't. If you're a new band right now, you could make it without them. But lets give the record labels a few years while they cling for dear life. My prediction is for early 2009, the record label industry will be dead.

(The long awaited) Disruptive technologies part 2

This post does go back to the 23/03/07 so i'm sure there were a few of you waiting ... surely?

Anyway, the original post is here, and i promised to tell you why i felt certain industries will be the next to feel the effects of disruptive technology.

So here again are those four industries and the reasons why i believe they will start to feel the effects of disruptive technology very soon:
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Advertising - I'm sure i'm not the first to predict their downfall. Advertising agencies are clinging to their cash cow (read: TV advertising) while all the data suggests that the mass market has moved on. Then they have disruptive technology converging on them from all fronts: User generated ads via Current.tv and Thought Equity; traditional television commercial ad booking service via Spotrunner. Video advertising on the internet via Narrowstep's Adserver and Tangozebra etc. Ad agencies need to innovate now and start to engage audiences. When was the last time you remembered the brand being advertised on a funny TV ad?

Video Production - Through economies of scale more than anything, the price of video camera technology has come down. Way down. It is now £500-£1000 to buy a good HD video camera (superior to Beta or mini DV). User generated content is the new fad and Internet video has unleashed the inner creative in everyone - expect a new breed of production companies to enter the fray with the barriers to entry (production equipment worth tens of thousands of pounds) now significantly reduced.

Website Design - Blogs, web 2.0, asp software, widgets, mashups. It is now easier than ever to create a credible web presence without the need to engage a web design agency. Complex website such as social networks can be created for free or at very little cost by web 2.0 application providers (my next post will list these), and widgets can manage lots of fun stuff like polls, calendars etc. Blogs get more influential by the day, i think when Hilary Clinton announces her run for the presidency via her blog it says something. The need for high-end websites will always be there but the low end of the market has effectively been cut out.

Fashion - Here is one you might not expect, but once again i allude to the creativity of the human race being unleashed by user generated content on the internet. Services such as Spreadshirt allow anyone to upload a design and sell their clothing on their myspace page, with production and delivery fulfilled by spreadshirt. This is an amazing business model and means that anyone can compete with the big fashion houses. With young consumers ever more distrusting of brands, and online retail growing all the time, expect more youngsters who grow up with this service to buy clothing from their peer group and fashion to feel the effects of disruptive technology.

Now, i have one more disruptive technology to blog about, but i think it deserves it's own little post. I'm going to call the death of an industry, by one little piece of disruptive technology, so stay tuned, i will post it for you later today.

BBC TV goes mobile

The BBC has announced a trial of mobile television services on the Orange, Vodafone and 3 networks in the UK. It's terrific they are exploring new areas but this is hardly something a public service broadcaster should be doing in today's media climate.

The 3G viewing experience in the UK is still poor and little used by the general public, and until broadband is readily available on phones and prices for mobile internet access come down (or mobile operators decide to stop confusing consumers), it will remain so. So why a public service broadcaster should foray into this area is beyond me. For my mind, they are a commercial hypocrite, this is the act of a company with public service pretensions, and example of how grossly over-funded they are.

Blog Goggles

Intrinsically different to the other type of goggles i often wear on a bender night out, Blog Goggles is a new directory of blogging professionals, categorized and rated by their peers. It seems like a great service in theory, but i was a little dismayed to find they didnt have a category for internet television or online video, which is generally what i waffle on about here, so i have placed myself under the 'social marketing' category.

Anyway, you can rate my blog by clicking on the new icon at the top right of the page, or here it is below. Sounds like a good little service i would recommend to all fellow bloggers.

Great video, now embedded

Where every hour is amateur hour

Now here is a site that will get no short amount of infamy. Justin.tv has just gone six days old and features a young entrepreneur, Justin Kan, streaming video of his life, live on the internet. The twist, in comparison to previous 'watch my life' web cam efforts is Justin has a camera mounted to his head, and you can watch him 24-7 no matter where he goes.

Not kidding.

Its a fantastic concept, and i will be amazed to see where this goes. He's already gotten himself a front page on Digg which must have put his viewing figures through the roof. It surely won't be long til Letterman comes calling and then i wonder what will happen? Will people want to watch the interview on television or over the internet via Justin.tv? That will be quite a showdown between the old big daddy medium and the new unruly one.

Either way, i think its hilarious. The servers will surely crash at some stage if it really starts to take off. But, if for nothing else, its an amazing, crazy, internet 5.0 idea.

BTW, my subject heading is a great quote taken from the site itself.

The Tipping Point

The NBC/News Corp announcement is nothing short of THE tipping point in the online video marketspace. Internet television has just gone mainstream. Yes, we've all been watching Youtube for a while now, and short from video from whatever other video sites might have briefly taken our fancy. But this announcement is about long form, advertiser funded, online video content, for which very few media companies have any sort of strategy or solution in place. Expect a rash of activity over the coming months as they fall over themselves to find one.

Content companies, start your engines, you might want to go to market with haste - the great land grab for internet video eyeballs has just begun.