Online Creative Destruction: Music Blues Part 1

When it comes to new technologies the law of creative destruction is merciless. One of the latest victims of the new generation of Internet applications - commonly referred to as contextual Internet, Social Media or (more often) Web 2.0 - is the music business. The industry’s picture is gloomy: sales and revenues are in a tailspin and there is a general feeling that the good old trusted music marketing knacks simply do not work as they used to. A clear symptom of this is the steady decrease of hit albums since the year 2000: only one music album released in the new millennium is found in the Top 20 list of hit albums of all times http://www.rockonthenet.com/xtra/toplps2.htm

Industry insiders, stockholders and even academics try hard to figure the best course of action. The main causes of the problem are known: File sharing, illegal downloads and the decreasing power / lack of effectiveness of mass communication are mostly blamed. Less people seem to realize that another source of troubles is the explosion of the special interest micro-markets that have switched a large part of demand for music from the hit album to the “Long Tail” at the cost of the official labels that have dominated the music scene for the last forty years. As a result a steadily increasing chunk of the demand for music is shifting towards remixes and amateur online music, circulating through blogs, podcasts and other Web 2.0 type web sites. Music amateurs and enthusiasts have access to freely available, open source software that turns them into composers, performers, producers and distributors of remixes or other shorts of “garage” music, that is further virally distributed among funs. In other words the music industry does not seem to be the victim of technology only but also of the victim of changing consumer predilections.