Change, uncertainly and chaos are an entrepreneurs best friends. There has been a lot of change and uncertainty in the music industry over the past few years. In spite of the industry giants’ best efforts to stop the changes taking place in how we will be buying and listening to music, we are in the middle of a transition in the industry that will rival the impact that radio had on music in the 1900s. A new report from Nielson SoundScan reported in today’s Tennessean shows the changes that are just beginning to take hold.
The good news was that overall sales of CDs, ringtones, albums and digital downloads passed the 1 billion mark in 2005, climbing 22% in terms of units sold thanks to the rapid expansion of digital offerings.
Sales of digital albums and tracks soared by triple-digit percentages last year, offering industry insiders a fresh plate of data on the impact of the paid download market.
Does it mean that the giants will go away? Probably not, but how they do business, who they do business with, and how much of the music business they will control in the future will change. There are lots of glum faces among the traditionalists on Music Row in Nashville. There world is changing forever and their business models are unraveling.
And there in lies the opportunities in this industry. A few home runs will be hit, but most the action will be in lots of singles and doubles hit by savvy entrepreneurs who will embrace the product and distribution changes that are taking place.
Right now the changes seem slow to the entrepreneurs I know. They are ready for the industry to embrace their new business models. Revolution in an industry takes time to get traction, but when it does, hand on because change and opportunity will explode.
I saw this as an entrepreneur in the health care industry in the 1980s. We knew managed care was coming and that it would completely change our industry. But of those of us who were early entrants into the new health care world, we felt like kids waiting for Christmas to arrive — it seemed to take forever. But when the day arrives, it is a joyful and even chaotic time.
Music industry entrepreneurs get ready. The next five to ten years are going to be a wild ride!