The following is a guest post from Jack Isquith, which originally appeared on his blog Digital Music Insider, and is reposted with his permission. Isquith is a digital music industry veteran who has held senior posts at Warner Brothers Records and AOL Music.
The Final Take: On first blush this Bain chart of global music revenue is sobering. We have lived through a painful slide. And, no one I trust is betting on a reprise of the upward growth curve of the '90s. That growth was a CD phenomenon.
But, if you take a breath and steady yourself, you will note that we are seeing a business still driving substantial revenues -- equal revenues to the early 1990′s. This despite being tied to a badly outdated business model -- a model overly dependent on selling individual copies of pre-recorded CDs & a la carte digital files. This is a business plan that hasn't really changed since 1992.
So, how will this chart start heading upward again? If I knew that with 100% clarity, I wouldn't be blogging tonight, I'd be collecting on my bets. So while I don't have 100% clarity, I do see some light. People still love music. The amount of music-related YouTube and Facebook posts alone are staggering.
Here's what I do in times of confusion; I think about Bob Dylan. And since we are talking about the 1990′s, playing the Dylan card works nicely. In the early 1990′s Bob Dylan was washed up and counted out -- he was knocked out loaded. Rambling and seemingly incoherent performances, indifferent albums, and no discernable strategy.
And then, seemingly out of nowhere, he (or someone close to him) remembered "Bob Dylan Is Important". Let's position him as important. In the early 1990′s, as CDs were booming, Dylan made two under-the-radar but critically lauded blues records. Tours got much better. He dressed up like a squire. Dylan got proud again. This all led to Time Out Of Mind, which won the Grammy for Best Album in 1998, and cemented Dylan's comeback. Then for an encore to Time Out Of Mind, Dylan capped the decade off and summed the whole thing up, with this classic line from the song "Mississippi",
You can always come back, but you can't come back all the way.
That's what I see when I look at this chart. A music business that seems, for now, like Dylan in the 80′s. Positively knocked out loaded.
But perhaps, with Social Networking, Hack-Days, New Artist Deal Models, and above all a real embracing of technology -- the business can find some way to get proud again.
Like Dylan, the music business can come back, just not all the way.