A Psychological Analysis of Record Industry Decline - hypebot

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Jake

Nice piece Kyle. Interesting insights.

Kyle Bylin

Thanks Jake, I tried to be careful, as just because the dots seems to connect on the page doesn't mean they actually connect in real-life. But, it was too neat of a post to pass up once I saw the insights align.

Chancius

The record industry was a juggernaut that saw good and bad times. I'm currently reading the book Appetite For Self-Destruction and it clearly shows that the execs at the music industries were paid extremely well while signing acts to deals that really sucked when you compared the two. Almost every exec was interviewed at their homes that were luxurious and grand while a lot of their acts wound up just as broke as they were before they sold hundreds of thousands of cds. These companies were SO tight fisted about their revenue that that they employed dirty tactics to leech as much money from consumers as possible from payola scams creating fake placement and hype on the billboard charts to MAP arrangements where they fixed prices of their product at different stores. It was only a matter of time until their empire crumbled. A lot of it was fake. All the hype and promotion was just bullshit to get our money and get our money they did because they had the market locked in their favor.

Free album download at http://www.facebook.com/chancius

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snfubar

... in a word "piracy" ... seriously... nuff said.

Kevin Leflar

Good article Kyle.

It seems clear to me that the slow death of the majors over the past decade or so is about managing decline of the most profitable music format ever created for the distribution pipeline they control: the compact disc. The death of the CD is not the death of the music industry - but it will likely change many of the players and the rules. Copyright is at risk in its current form and needs to be updated more quickly than would seem legislatively possible.

Kyle Bylin

I agree. Had I only been able to find some research that applies for directly to CDs, this picture would've been more complete. It's one of those things where I could've spend a month perfecting and expanding on this analysis, but I did it instead in a few short hours and lots of coffee. For now, it's just fun food for thought. I had no idea if I was crazy or onto something.

james wilkinson

the greed and spending of the artists and execs in the 80's and 90's boom is the spike in popularity. the decline in sales over the last 10 years and lack of will to move forward and embrace the current digital revolution is the downfall. there will be an answer, it just might take another 10 years to get to there.

Rudy

I was on more than one conference call in the late 90's in which the label heads stated "this internet thing is going away"

They blew it when they did not get together and own the technology (Napster), before the horse left the barn, now there is no way they will ever get it back no matter how many consumers they sue...

ken, betterPropganda

Sorry, it's not a "nuff"; and it's not correct. Empirically, according to the research done at Harvard/ Chapel Hill: "(illegal) Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates. Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales."
http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

ken, betterPropaganda

Steve Blank talks about three types of companies: mom-n-pops, scalable entrepreneurial, and a typical corporation. The third one, the corporation structure, describes the music industry circa 1999 and now. The corp is set up to execute efficiently in an existing market with a well-established product against a specific plan. But, this organizational structure doesn't deal well in situations of change. So, when the music "product" changed radically, the industry was unable to nimbly shift due to its very structure. This inability to shift probably manifested the psychological reactions mentioned above. Thanks Kyle, you've definitely added a layer of analysis to the picture.

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