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.
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.
Frankly I am surprised that it took this long. But today, we read in the Wall Street Journal that two major publishers have decided to pull a music industry mistake. Simon and Schuster and Hachette Book Group have announced that they will not release most eBook editions until the hardbacks have been on shelves for four months.
And I quote David Young, CEO of Hachette Book Group, whom the article cites as saying: "We're doing this to preserve our industry, I can't sit back and watch years of building authors sold off at bargain-basement prices. It's about the future of the business."
Correction: This move is about the past of your business.
I'm just being a historian here when I point out that language like "We're doing this to preserve our industry" is a classic symptom of what we at Forrester loving call The Media Meltdown. I wrote a whole report on this ailment and its many symptoms, chief among them is that media businesses attempt to preserve analog business models in the digital economy, even when analog economics no longer apply. This is exactly that scenario.
I have two very important messages to offer the book industry (most all of them clients, so I'm trying to be delicate here, the way a group of friends running an intervention for an alcoholic have to act even if it involves summoning tough love). The first message is the hardest to hear and it will make me some enemies. But the second message offers some hope and I encourage you book types to give it a fair hearing, because I have history and economics on my side.
Today the long-anticipated joint venture betweenConde 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: