The music industry is a wonderful example of how established players in any market often feel they have a vested interest in stasis rather than dynamic change. Rather than see new technical innovations as potential boons, the industry has spent a fortune trying to use the state to defend its existing business models with an army of lobbyists and lawyers, attempting to un-invent the technologies that they (rightly) see as shattering the current structure of its multi-billion dollar industry. Steven Den Beste has a good article on the subject and makes an excellent point regarding the self-defeating culture in the boardrooms of the music industry majors:
As long as the industry doesn’t see it from that point of view, they will continue to try to fight the future. No industry can ultimately survive if it thinks of its customers as enemies; ultimately the industry has to adopt the point of view of its customers and cater to their desires. You cannot sell someone what you want them to have. You have to sell them what they want to buy.
A classic case of this syndrome of ‘customer-as-enemy’ was provided by Steve Heckler a VP from Sony Pictures Entertainment in August 2000 who said:
The [music] industry will take whatever steps it needs to protect itself and protect its revenue streams,” Heckler said. “It will not lose that revenue stream, no matter what. […] Sony is going to take aggressive steps to stop this. We will develop technology that transcends the individual user. We will firewall Napster at source – we will block it at your cable company, we will block it at your phone company, we will block it at your [ISP]. We will firewall it at your PC.
Although Sony tried to apply some damage limitation spin to Heckler’s remarks soon afterwards, this is clearly delusions of grandeur on a spectacular scale and is exactly the mentality to which Den Beste has alluded. The major players think they can translate their wealth into political muscle and use the state to crush would-be new entrants that seek to undermine their businesses. taking out Napster has only encouraged this flawed thinking. Additionally yet more money is being spent on technological fixes which are also doomed to fail due to the ‘Swiss Watch Effect’ (it is cheaper and easier to smash a Swiss Watch than it is to make one): they spend millions on copy protection that will be broken within months or weeks by the worldwide army of Internet linked 15 year old crackers who work for free.
Another indication of the scale of ‘wrong-think’ going on in boardrooms is that they do not seem to realise that many people’s CD player is their computer. I might have purchase the new Natalie Imbruglia CD White Lilies Island but I have read that most computers gag on some of the tracks due to copy protection and I do tend to play a CD in my computer whilst I surf the Net. As a result I have not bought the CD. Well I suppose if the company strategy is to make it hard for me to rip any tracks into MP3s, one way of doing that is to discourage me from buying their products all together. Somehow I don’t think that was quite the effect they were hoping for but that is the one they have got.
[Update: article amended with Steve Heckler of Sony’s exact remarks thanks to the excellent input of readers Tino D’Amico and Joachim Klehe]
