So what really happened to the music industry – in data?

broken LP record

We all know the story of the music industry decline, but what do the numbers really tell us? Is the financial disruption as bad as we imagine? It seems there’s never been a time when more music has been consumed. Well, it turns out that downloads and streaming isn’t doing much to reclaim lost revenue from the vinyl and CD sales. Here’s some mind blowing data as to how heavy the industry loses have been over the past 10 years. (source RIAA).

10 years ago Now
Recorded music sales $16 billion

$6.9 billion

All streaming sales Nil

$1.5 billion

Download sales $250 million

$2.8 billion

CD sales $15 billion

$2.5 billion

The numbers show total revenues have more than halved. And it is also clear the revenue gap is not being filled by new low cost distribution methods of music. It seems as though the glory days of the ‘recorded music’ business shall never return.

We may even re-enter an age of Medieval Minstrels – where musicians all need to sing for the their supper, and the recorded version is the sample of a high paid live performance. But most of all, some industries, just like plants are seasonal, and not perennials. They have a brief moment of blossoming brilliance which will never be repeated. It pays to recognise when we might be in a such an industry.

New book – The Great Fragmentation – out now!

The reality of the screen

Old Abandoned Drive in Cinema

The reality is that all screens are created equal now. Every screen can serve up the same content. Every screen is connected to the same world. Every screen doesn’t care whose eyes and ears are at the other end of it. Every screen can deliver the same data, on the same day, globally. There is no such thing as TV anymore. And so it then begs the following question:

Why do people who profit from screens treat them as different entities?

It seems the people who work in TV still think their screens are different. It seems the people who make movies think their cinemas are different. And pretty much anyone else who created content for the screen pre-broadband era thinks the new screen reality does not apply to them. And while the screens don’t care what they show, the people also don’t care which screen they view it on. In fact, they’d much prefer to have the choice over which screen they can use. I’m pretty sure many of these people, like me, would possibly a premium for such a convenience. And yet, in 2014, decades into this shift, the powers that be, sorry the powers that ‘were’, are still avoiding their potential revenue. And here’s why:

They love their infrastructure more than they love their customers.

Or more correctly, they believe their ultimate success is decided by their supply chain and not by the end consumer. Serving business partners at the expense of the ultimate paying customer down the line is a strategy fraught with danger. Especially when we are now in a phase where the middle man is quickly evaporating. Many of those business who could go direct to the end user choose not to, as they may ‘offend their existing trade partners’.

I like movies: I love seeing new release movies. A night out at the cinema is a fun and reasonably inexpensive night out. But now that I have very young children, getting out of the house to grab a movie is more difficult than it used to be. And so my wife and I just don’t go very often. But here’s the kicker – I’d pay a premium for the right to be able to watch a new release at home. $30 for a stream via Apple TV? – I’d pay that. It’d still be cheaper than paying for parking, ice creams, inflated corn and everything else at the cinema. And to this day I still can’t do it. No doubt I’m not alone. No doubt, this entices piracy. And I know what those in the movie business would retort with. They’d say the cinema chains would cry foul and stop distributing their films. And when they both claim this, they’d both not be understanding the true reason we go to the cinema – The night out. The movie is only part of the deal and the real competition is not watching a movie at home, but going to a pizza a restaurant, or a bowling alley. They’re also forgetting the margin enhancement opportunities of low cost digital distribution.

Here’s some simple advice for every screen business: If you have the opportunity to serve a customer directly, then without delay consider releasing all content in all forums simultaneously. Not only will it create a new direct relationship with those who actually pay for the product, it might just stop another startup eating your lunch.

New book – The Great Fragmentation – out now!

My smart phone killer app is…

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…One which was already installed on my phone when I got it. It isn’t weather. It isn’t the web browser. It isn’t stocks, music, phone, mail or messages. But after paying attention for more than a week to which function I used most often on my phone, it surprised me to find out I use this the most.

The clock.

Yep, I take the phone out of my pocket to check what the time is. I use this more often than any other function on my phone. So for me, it is the killer app. And here is what is killer about it. When I do this, I unfortunately feel compelled to check out some other stuff while I’m looking at it:

“Has anyone tweeted me?”

“Are there any missed calls while it was silent?”

“What’s happening on my instagram feed?”

“What’s the surf like this weekend?”

Checking the time is a habit I formed even before the personal computer revolution…it takes me way back to grade school. It’s an old habit with a new solution. But what it does, it opens up related revenue streams and usage occasions. It’s another perfect reminder that we are far more likely to succeed when we leverage existing behaviour.

New book – The Great Fragmentation – out now!

Sack Your Boss – Wednesday night

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The thing that I’ve learned in the past 10 years more than anything else, is how transferrable many of our skills are. I started out my career working in the FMCG industry – Fast Moving Consumer Goods – think supermarket style brands. And while I chose to stay in the industry for more than 10 years, when I decided to leave, and even applied for jobs in other industries I kept getting the same barriers put up in front of me. The HR people and recruiters would say:

“They are after someone which the industry X experience”.

Even the surfing Industry rejected me twice given I hadn’t worked in it already, even though I lived the life and had the all marketing experience in the world – their loss.

I got defined by where I had been, rather than what I was capable of, or heaven help me, actually passionate about. But there is also one little truth to this that they never mention when we’re told we don’t have the right background. And that is this viewpoint and decision is entirely about them. It’s about their needs to simply fill a hole. It’s about their needs to justify a recruitment decision simply. It’s about them not wanting train you or, heaven help us, actually teach you something. In short this so called industry experience requirement is about making their life easier. It has nothing to do with us.

But here’s the upshot – there are some simple techniques to ‘Sack Your Boss’. I know, I’ve done it a number of times. And once you hear some stories about how you can transition to becoming an entrepreneur or a different career path, you’ll feel inspired. So we are running an intimate event on how to do exactly that. There are only a few seats, it’s small by design so we can deep dive. I’ll be sharing my story as will Ben Rowe on how we escaped the tyranny of consumer goods. But the stories will resonate no matter where you work.

Come along and have a drink and a chat. It’s this wednesday night in Melbourne CBD at the Hub, it’s free, and should be a fun little night.

You can register here. See you there.

Going back to the well

Screen Shot 2014-10-29 at 1.14.36 pm

This year I’ve been working steadily on my new book and sharing ideas with people who want to know about the technology revolution. And while it is true we are always learning while on the job, I feel like people in the information business need an off-season as much as professional sportspeople and musicians do. Problem is we don’t tend to plan for it on an annual basis as much as other ‘seasonal industries’ do. Which could lead us into a dangerous pattern of already knowing what we know, or at worst obsolescence through ignorance. The ironic thing is that this exact behaviour pattern is what is causing large corporations to be disrupted. They are so busy doing what they do, making what they make and utilising the assets they already own that they rarely go back to the well.

If you’re an entrepreneur or freelancer (like I am) then we need to ensure we don’t get so deep into our work wormhole that we ignore the world around us. Screens and offices are very dangerous places to watch the world from. It’s probably better to make, break and explore a few things outside of our work to ensure we keep our edge.

New book – The Great Fragmentation – out now!

Five for Friday v4

Here’s 5 pieces of information that got me thinking this week. Reading, viewing and listening pleasure for the impending weekend. Enjoy!

1. Are you suffering from Stuffocation? Author James Wallman takes about it here at Google.

2. Another reminder that the future is phygital – Both physical and digital have a place. One is not superior to the other. In fact, they are better together.

3. Crowdfunding the more important things in humanity – scientific research. Seems more important to me than a tricked up cooler. There’s hope for the internet yet.

4. This is BIG – Estonia has just become first country to allow for e-citizens. Just like corporations basing themselves in low-cost markets, humans can now do it too. Welcome to the Sans Nation State economy.

5. Isaac Asimov essay reveals the true secret of creativity – it’s about the cross connection. And guess what, creative industries and people don’t have a monopoly on it.

Yours in learning, Sammatron3000.

The people we want to meet

The people we want to meet, would probably be happy to meet us too, before everyone wanted to meet them. The problem with the people we want to meet, is really in the timing of when we want to meet them. Because we usually only want to meet them after they have done something notable. It’s not uncommon to read about a lunch with Warren Buffett being auctioned for more than a million dollars. Or for people having a list of people they want to meet who inspire them. But what’s interesting is that no one wanted to meet those people before their fame and success was evident. Yet they are the same person. Add to this that sometimes a persons success is not due to specific, unusual or dramatic insight, but probably more effort and circumstance.

Right now, there is a lot of pre-famous people out there whose advice no one seeks, yet. Right now, we all have friends and colleagues who give great council and thoughts, despite the fact they’ve never fronted the cover of a magazine or featured in a human listacle. Often the people we should want to meet, are the people we already know.