The Decade that Music Forgot (A Brief Glance Back on the 10 Years that Unraveled the Music Industry)

In a couple of days’ time the doors will close on a decadum horribilis for the music industry. Although recorded music revenues actually grew in 2001, the seeds of the forthcoming whirlwind were already well and truly sown. In fact one single event can be identified as the trigger: the launch of Napster in 1999.  Of course other seeds had also taken root in the late nineties, including the launches of MP3.com, the PMP300 and the MPMan.  But according so much importance to Napster is more than a useful construct for the historical narrative: Napster was more than just a metaphor for the transition from the distribution era to the consumption paradigm, it was the crucible of the music industry’s 20th century meltdown.

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Media Product Innovation: Building Products That Thrive In The Media Meltdown

2009 saw some solid progress made in various digital content marketplaces but it is too early to start talking about the green shoots of media recovery.  The Media Meltdown (the process by which media industries are disrupted and reshaped by digitization of content) will continue to claim scalps throughout 2010 as digital content revenues do little to offset the impact of plummeting physical media sales and as analogue dollars crumble into digital cents.  But consumers are not falling out of love with media, rather they are growing tired of paying for its 20th-century product iterations (and those 21st century products that try to reinvent the old products in a digital context).  A new framework for media product innovation is now required to align media industry content assets with 21st-century consumer behavior and demand.  Forrester proposes what form this should take in a new report Media Product Innovation: Building Products That Thrive In The Media Meltdown’.

 

The core asset that media companies own is of course the content itself, but Content is no longer king. Or, at least, its throne is no longer undisputed. Instead, content is busy fighting off the republican advances of the channel. ISPs and mobile operators use content to fill their pipes, technology companies to fill their devices, and brands to help sell their products and to meet their branding objectives. The hierarchy is clear.

 

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New magazine joint venture faces tough uphill climb

Today the long-anticipated joint venture between Conde Nast, Hearst, News Corp, Time Inc and Meredith Publishing became official. These firms -- all of them up against the ropes in an effort to deal with declining magazine ad revenue and the lackluster performance of online ad models -- have decided that to face the digital future, they'd rather do it hand-in-hand. 

 

The motivation for the union is simple: eReaders are taking over the book publishing world, meanwhile magazines are left in the dust, with no devices they can call their own.

 

I mean, really, have you tried to read Business Week on your eReader? It ain't pretty. And on the Kindle, most magazine publishers want to charge you for the painfully slow page turning experience of the device all in exchange for the convenience of automatic delivery to your portable device. So the industry -- seeing a world that is evolving without their interests in mind -- is joining hands to solve two problems:

 

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The Nook changes the game with the first built-in social experience

The official announcements about the Nook went out yesterday and much has been said about the device, such as whether it trounces the Kindle (it does not) and whether the delay in shipping (units you buy today, for example, are expected to ship January 15) will permanently keep the Nook out of the running (it will not).

Because so much has already been said, we paid attention to what hasn't yet been said -- as far as we can tell, by anyone. It's this: the Nook is the first eReader to hit the market that has any kind of social connectivity built in to it. I'm referring to the "loan a book" feature the Nook offers. Read reviews like the one at CNET and you'd think that the book loaning feature is a flop because: a) it only applies to select books (at the publishers' whim) and b) it only lasts for 14 days.

I'm gonna tell you a secret: it doesn't matter how limited today's loan a book feature is, it's a huge step in an increasingly important direction for eReaders.

People share books. They share them, and then they talk about them. A lot. This fact is so critical to the way people read books that it is amazing that none of the eReaders yet offered to the market have any meaningful book sharing built into them. So even though the Nook is shipping late (folks, this is the eReader market, demand has been outstripping supply for the past two years now, stop acting surprised that Barnes and Noble and Sony are experiencing delays), we applaud its arrival because it opens Pandora's social box in this space. Once it's open, this box will set free all kinds of goodies that we are excited to have, including:

 

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So just what does Apple want with Lala? (A few questions and answers)

Apple has confirmed the acquisition of streaming music provider Lala.  The move is significant (even though Apple appear to be trying to suggest otherwise) because it is one more piece in the gradually emerging puzzle that is Apple’s future music strategy, which for a few years now has remained relatively static.

 

Why is Apple’s music strategy in need of revision?

 

If the iTunes Music Store had evolved half as much as the iPod had over the last few years we’d have a cutting edge music service. Instead we have one that remains market-leading in terms of basic functionality (i.e. store to device synching) but behind the curve in terms of experience, discovery and community. Whilst the web threw up the likes of imeem, Spotify, Last.FM, MOG etc. the iTunes Music Store stuck to selling 99 cents downloads.  Don’t get me wrong the iTunes store is a crucially important platform that accounts for the majority of the current paid download market, but it isn’t yet equipped to drive the digital music market to the next stage.  In its current guise it is essentially a transition technology: with one foot in the distribution paradigm of selling units of stuff, and one in the consumption era of on-demand access.  It has done a great job of helping consumers take baby steps into the digital age, but has pretty much reached the limits of its potential as a music service. (You’ll note my continued and fully intentional implied distinction between the music store and the App Store – more on that in a moment).

 

So why buy Lala? 

 

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