Spring Time in the Music Business

There was a lot of hand wringing when the music industry consolidated, yet again, a few years ago to create three giant companies that seemed poised to dominate the market. It was 2003 and I had just moved to Nashville. Many of my friends wondered what an entrepreneurship professor was doing moving to a city dominated by such a mature industry and taking a job at a university that has one of the largest music business programs in the country.
Well, beneath the feet of the three dancing dinosaurs that dominate the current industry structure there is a whole new structure beginning to take form. The music industry has long been made up of lots of small businesses and independent contractors, as seen in this article from StartupJournal.
What has changed is that this grass roots level of music entrepreneurship is beginning to become more than self-employed artists (see the Future of Music for a discussion of these changes). Technology and consumer preferences are facilitating a restructuring of the music industry that will lead to an unprecedented shift of power. Both content and distribution have been firmly in the hands of the industry giants for the past few decades. However, the changes that are taking place in how music is made and how it is gotten into the ears of its customers are beginning to loosen the “big three’s” grip.
It would be a mistake to assume that we are simply taking a small, controlled step forward to the “next thing,” as when we moved from the 45 to albums and from albums to CDs, and that the industry giants will somehow grab control of digital distribution. Why? It is because this step in the evolution of the music industry is not being created by the market leaders as seen with the last few changes. This change is outside of their established system. It is revolution, not evolution.
I think that the iPod does not represent the “next thing” in the industry, as many are assuming, but really just one of several catalysts that will help propel entertainment into several years of entrepreneurial innovations and breakthroughs just as we witnessed in the information/computing industry in the 1980s and 1990s.
The music and entertainment industry is entering a period of new beginnings. This is spring time in the music business.