Canary in a Coal Mine: How The Music Industry Destroyed Itself and How Your Industry Can Avoid The...

Canary In A Coal Mine

How the Music IndustryDestroyed

Itself

And How You Can Avoid

The Same Fate

George Howard, Founder GHS

Any institution built upon a firmament of unethical behavior, will ultimately crumble.

From its inception to today, the music industry has traded on exploitative asymmetrical relationships between themselves and those who create and purchase their products.

This has resulted in “relationships” of necessity and command/control power dynamics, rather than actual - shared benefit - relationships.

This “original sin” led to practices and byproducts that so handicapped the music industry that it has essentially collapsed.

Its fate is avoidable, but requires a shift in traditional business thinking.

What the hell just happened?

Ironically…

…the music industry refused to listen to customersor market signals

An incalculable - literal and figurative - distance between the industry and its customers/suppliers was created, and, thus, deafness to market signals, suppliers’ needs, customers’ changing requirements.

Result:

Result:

Vast over adherence to “cash cow” model, even while “shooting stars” presented themselves…constantly

…just slower than the Amish. (Credit to Stan Cornyn)

The music Industry adopted new technology…

Attempted to Destroy:

Temporary salvation: Piano Rolls

Attempted to Destroy:

Temporary salvation: Vinyl

Attempted to Destroy:

Temporary salvation: Cassettes

Attempted to Destroy:

Temporary salvation: Mustaches/Brooklyn

Just making sure you’re still with me

Temporary salvation: Coffee

Attempted to Destroy:

Temporary salvation: Compact Disc

Attempted to Destroy:

…it became information. People share information.

When music transformed from analog to digital…

"On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life.

On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time.

So you have these two fighting against each other."

—Roger Clarke, Whole Earth Review, 1985

The collapse of the music industry obviously and easily predicted the travails of newspapers, books, film, tv, retail that moved from “analog” to digital.

Its fate, however, is a cautionary/instructive for far more.

Our Models:

Harry Potter’s Mirror

Customer As Teacher

Architecture of Participation

Model I: Harry Potter’s Mirror

All great companies avoid commoditization via product offerings that make those who use them feel a more realized version of themselves.

This requires a deep understanding of and transparent expression of a firm’s values. It’s “WHY.”

Model I: Harry Potter’s Mirror

“We are like X company, with Y competitive advantage no longer works.”

Replace “Y” with “wh(Y),” in order to avoid innovator’s dilemma trap and embrace whatever technology gets you to your KPI/WHY fastest.

Model II:Enlightened Customer As Teacher

As customers resonate with the firm’s clearly defined and articulated values (its Values…its “wh(y),” They build durable bonds of trust as well as Positive Information Asymmetry.

They have discovered some product/service that makes them feel better about themselves.

Model II:Enlightened Customer As Teacher

They will be unable to NOT share this with their friends.

De-tethers you from outmoded “command and control” “marketing,” and shifts the burden of promotion to customers/users in a distributed fashion.

Results in an increased NPS.

Model III:Architecture Of Participation

Our heuristic for an architecture of participation is drawn from Cross Fit:

• Social• Fun• Competitive

Model III:Architecture Of Participation

• This approach enables an ongoing dialog (Markets are Conversations) between firm and stakeholders, in which the firm becomes a dynamic platform for: learning/teaching

• creating/sharing• cogitating/iterating

Closer relationship to customers.

There are two ways of being creative. One can sing and dance. Or one can create an environment in which singers and dancers flourish.—Warren Bennis

Thank youGeorge Howard

gah650@gmail.com@gah650