Music Industry

by Bas Grasmayer

Filed Under:
business models, innovation


Can Innovation Through Business 'Solve' Issues That Legal Repression Can't?

from the making-music-worth-paying-for dept

If you follow music industry news, you probably didn't miss Spotify's launch in the US last week. Prior to this launch, a Swedish music executive was interviewed about what to expect when Spotify launches in the US. One part of the interview stood out in particular:
[Spotify] has eradicated music piracy almost on its own. Sweden was the home of Pirate Bay. They even had their own political party and made the prime minister in national television declare "Off (sic) course the youth shall be able to download music for free".

Three years later, The Pirate Bay is not mentioned by anyone anymore. Spotify is, on the other hand, mentioned by almost everyone - including the old Pirate bay fans.

This did not happen because some new radical law or brutal police force were implemented. Neither because a confused prime minister changed his mind again and embraced the music industry. It all happened simply because the users found a new legal service that they actually thought was much better than the old Piracy one.
What is interesting here is that innovation through business helped reduce 'unauthorized consumption' of music, while many a record label exec prefers to invest in legal changes that have not really made all that much impact so far. Personally, I think the recording industry missed a huge opportunity 10 to 15 years ago. Instead of using the legal system to fight Napster and the wave of peer-to-peer filesharing that followed, innovation through business would probably have been more worthwhile (and a lot less costly). Besides that, legal changes on the scale some of the folks in the recording industry envision would create a market that's even more broken than it already is, preventing other business (like Spotify) from driving innovation and competing in their industry, and would be threatening to civil rights (the rights to free speech and privacy in particular). Enforcing the interests of one group or industry by sacrificing innovation and civil rights surely must be one of the most undesirable things we as a society face today.

Even though Spotify displays a good model for success, it does have its drawbacks. One rights organization highlights an important issue with Spotify: the inability to port data.
The content industry is a volatile industry. Only two years ago MySpace bought imeem (the first platform in the US licensed by all 4 major labels) and shut it down the same day, replacing all playlists with ads. For this reason owning copies of music, whether through legal downloads or unauthorized alternatives, will stay attractive. As a matter of fact, according to the music exec mentioned above, digital sales in Sweden were up 17% last year compared to a mere 3% growth in the US.

We're only just entering the digital age. Blocking innovation with legislation and lawsuits is a shortsighted approach, especially with innovation proving to solve issues that legal changes can't. If the recording industry doesn't live up to their responsibility to innovate and service their fans, others will.

That's how business works.

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  1. icon
    PaulT (profile), 21 Jul 2011 @ 6:44am

    ...and yet again. Stupid AC comment, completely missing the core of the site's regular themes as well as the article being responded to, smugly accusing it of something that's never claimed - in this case, that "free" is the only business model that can work. That's never been said, and besides which, Spotify offer a free service - you only need to pay if you want the full service without ads. So, tell me, how does a service that allows free music streaming go against the idea of "free", again?

    "Are you suggesting that (eek!) legal music is in fact the majority of the market now, and that TPB is no longer relevant in it's "home" country?"

    I believe that if you read the words he wrote, he's saying that a Swedish music executive claimed the latter in the quote provided, while digital sales are increasing in markets where Spotify have a foothold. Anything else you think he's saying is your own assumption.

    "I doubt you will ever get to post again going against the techdirt doctrine like that."

    Except, he's posting the exact thing Mike often posts. The only people who go against the "doctrine" tend to be pathetic trolls like yourself. If someone can come up with a decent argument that's not full of lies, false assumptions and baseless attacks, maybe that person would be invited to post themselves. Most intelligent people welcome honest debate and intelligent counterpoints. But, I never see anyone like that, just people who attack Mike and/or regular posters as being thieves and pirates, when they do and say nothing of the sort.

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