New business models for a new music industry

I found this quick 15 minute video of Mike Masnick from Techdirt doing a presentation on future business models for the music business, with Trent Reznor (from NineInchNails) as an example (via the Swedish blog Opassande):

This is a must see for any aspiring musician, music producer or record label manager. Or anyone else for that matter.

First of all, everything he says make sense. It’s just so beautifully simple.

Second, even though I’m in an industry that heavily relies on presentations that sell this is one of the best I’ve seen so far. Only “bad” thing about it is the speed he talks with, but I’m guessing he had to do that to go through ~280 slides in 15 minutes

Third, the points he are making are really chilling from a business perspective if you consider what the recording industry is doing today (threat, disconnect, sue, etc.). What they are doing is the same thing as Bethlehem Steel did in 80-90′s, and that is failing to adapt to a new market.

From an article by Jim Collins, the author of Good to Great:

Compare Bethlehem Steel and Nucor, for example. Both steel companies operated with hard to differentiate products, and both faced a competitive challenge from cheap imported steel. Both companies paid significantly higher wages to workers than most of their foreign competitors. And yet executives at the two companies held completely different views of the same environment. Bethlehem Steel’s CEO summed up the company’s problems in 1983 by blaming the imports: “Our first, second, and third problems are imports.” Meanwhile, Ken Iverson and his crew at Nucor saw the imports as a blessing: “Aren’t we lucky; steel is heavy, and they have to ship it all the way across the ocean, giving us a huge advantage.” Indeed, Iverson saw the first, second, and third problems facing the American steel industry not in imports but in management. He even went so far as to speak out publicly against government protection against imports, telling a gathering of stunned steel executives in 1977 that the real problems facing the industry lay in the fact that management had failed to keep pace with technology.

Anyone seeing the same pattern again? Spot on.

If I was a shareholder in any recording company (which I’m not) I would demand change in management or strategy. Now.