Let’s walk down memory lane: The music industry faced significant disruption with the emergence of Napster, a peer-to-peer file-sharing application enabling illegal downloads, causing a decline in CD sales. Napster eventually shut down in the early 2000s because they did break the rules through copyright infringement.
Fast forward to today and we are enjoying the services of the likes of iTunes and Spotify who transformed the music landscape, revolutionized music consumption, and generated new revenue streams, while adapting to ever-changing consumer preferences. Here’s how they did it:
Challenged Norms using Intelligent Naivety:
Music Access: Consumers purchased physical copies of music, whether it be vinyl records, cassettes, or CDs. iTunes and later Spotify challenged this by promoting the idea of music access through digital streaming, reducing the emphasis on owning physical copies of music.
Distribution Model: The traditional distribution model involved physical distribution of music through CDs and other physical formats, which were sold in brick-and-mortar stores. iTunes challenged this convention by offering legal digital downloads of individual songs, eliminating the need to buy entire albums.
Entire Album vs À la carte: iTunes introduced the "à la carte" pricing, allowing users to buy individual songs, while Spotify pioneered the freemium model, offering both free and premium subscription options, instead of requiring a fan to buy the whole album.
Music Discovery: Before the digital disruption, music discovery often relied on radio airplay, music videos, and recommendations from friends or music store staff. Spotify's algorithm-driven personalized playlists and music recommendations broke the convention of traditional music discovery, providing users with tailored content based on their preferences, behaviour, and listening history.
Not all conventions were completely shattered. Some conventions remained relatively unchanged or adapted to coexist with the disruptive forces. Here’s where they maintained Category Expertise:
1) Label and Artist Relationships: Record labels continued to play a crucial role in artist development, distribution, and marketing while including digital platforms and streaming services to their distribution strategies, collaborating with them to promote and monetize artists' music effectively.
2) Music Creation and Artistry: Musicians and artists continued to be responsible for creating music and expressing their artistic visions while benefiting from the broader reach and new avenues to showcase their work that digital platforms could provide.
3) Copyright and Intellectual Property Protection: Copyright protection remained a fundamental principle in the music industry to safeguard artists' and content creators' rights.
4) Monetization of Music: Monetization through album sales, concerts, merchandise, and licensing continued while digital added new revenue streams through digital music purchases.
5) Role of Music Charts and Awards and Recognition: Music charts continued to track the popularity and success of songs and albums based on sales and airplay. Streaming data was incorporated into music chart calculations, reflecting the changing consumption patterns, and ensuring a more accurate representation of a song's popularity. The Grammy’s remain unchanged.
This example of Controlled Disruption in the wild highlighted several conventions that were disrupted, adapted or kept within the music industry and there is much more to learn from this positive change.At Flying Fish Lab, we actively help you reframe a challenge through Controlled Disruption so we can find opportunities to increase your chance of success.
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