The week before Christmas, pondering a year-end music business essay, a litany of major stories jumped to mind, including: the Twitter and SFX IPOs; Sony and Vivendi investors’ calling for entertainment spin-offs; Live Nation’s record revenues and the touring market’s banner year; the Samsung-Jay Z partnership and branding’s continued rise in the music space; impressive album roll-outs by Daft Punk, David Bowie, Justin Timberlake and Eminem among others; new entrants to the U.S. streaming market iTunes Radio, YouTube, Beats and Deezer just as MP3’s sales flagged and streaming revenues rose; the WMG-Clear Channel broadcast royalties deal; pre-emptive lawsuits against music legends like the Beasties and Marvin Gaye; and, of course, all things Miley.
This seemed a reasonable starting point with a range of events from different aspects of the music business. But then, of course, the earth spun. And, in rapid succession, three major music business news stories broke.
Within a span of 24 hours, WME announced it was purchasing rival IMG whose clients include Justin Timberlake and Taylor Swift; the federal rate court ruled on the BMI-Pandora case with far-reaching implications for the U.S. music publishing business; and, out of nowhere, an artist named Beyonce dropped a surprise album that rocketed to No. 1 and went on to sell nearly a million albums in ten days with virtually no promotion. The music business in 2013 awaited no one—especially those pondering.
“Disruption” is a business concept that has been bandied about ad nauseam for years in journals and at virtually every music and/or tech conference on the planet. The basic gist is that new, innovative technologies creating new markets can disrupt older, firmly-entrenched businesses and pick-off market share. The old guard music industry, for example, when it was run by a powerful, shit-kicking oligopoly was disrupted by the rise of digital music and an MP3 market that could not be tightly controlled.
The music biz’s disruption began over a decade ago, but the music market and consumer behavior has yet to settle—even more so in 2013. The business remained in a state of flux as consumers had yet to decide how they will listen to and pay for music and many new music businesses models have yet to be fully realized. And this year, too, as disruptors were disrupted, any sure bets were off.
The MP3 download, for example, that glorious, easily transferable, compact and rather soulless digital medium that brought down a long-entrenched music empire, this year lost market share. Digital music sales through November shrunk by 4%, which Billboard’s Glenn Peoples described as the music format hitting “middle age.” Perhaps in the same way that MP3s sparked consumer fatigue with teetering towers of CDs, music streaming services, like YouTube, Spotify, and others facilitated consumers loss of interest in storing, finding and playing music from daisy-chained external hard drives or far-away cloud storage lockers backed-up to the hilt with music and selfies.
No, consumers need it now and everywhere at once; on their smart phones (increasingly so), wafer-thin laptops, multi-sized tablets, desktop towers and from clouds—simultaneously. Also, in car dashboards and when traveling domestic and international. And “it” means the history of recorded music instantaneously at the fingertips. And better if both soul mates and vague acquaintances can know exactly what they're thinking, doing, bothered by and dreaming of while listening. Thanks Jimmy, Larry, Daniel, Axel, Tim and Brian--let us know when it’s really ready. Talk about demanding consumers...
But for some artists, the long tail’s promise of incremental micro-payments lifting all boats has yet to happen as promised (see Chris Anderson’s 2006 book “The Long Tail: Why the Future of Business Is Selling Less of More,”), and they grew weary and impatient. "To me this isn't the mainstream, this is like the last fart, the last desperate fart of a dying corpse. What happens next is the important part," said Thom Yorke in an oft quoted interview with Mexican website Sopitas.com, that clearly resonated. "It's like this mind trick going on, people are like 'with technology, it's all going to become one in the cloud and all creativity is going to become one thing and no one is going to get paid and it's this big super intelligent thing'. Bullshit,"