According to a recent post by Sarah Perez in Techcrunch, Nielsen’s data indicates that music streaming has been in rapid growth in 2015. Due to new players in the industry, improvement of connectivity and increased user acceptance, the on-demand streaming services grew from 164,5 billion songs in 2014 to 317 billion streams in 2016. This has resulted in digital music and album sales decrease on all fronts except vinyl, which has been increasing for ten years now. Retro sells. Another interesting fact from the article was also that new music is predominantly discovered from radio and its importance is increasing. In a way, we are going back in time with this too.
Music business has been the first content industry that faced the challenges free content distribution in the internet has made possible. They did all the possible mistakes in the early days, but have also been first to be able to create radical changes that have created the base for new business.
Looking at the big picture it is easy to declare that companies need to find ways to take advantage of disruptive technologies at the exact right moment. First movers are often in trouble, but if you are late, your business will not recover. Increasing popularity of streaming can be seen in other industries as well. movie and television business is a no-brainer, but the big trend of renting rather than buying is the same phenomena. The popularity of “streaming” a car, house or book is rising – and not only downloading, but uploading as well. Or how would you call Über, Airbnb or Campusbookrentals?
Big industry disruptions take ten years, give or take, to go through. Winners of these changes are active in trying to understand the changes as early as possible and first in experimenting with new ways of doing business. The time of long lasting competitive advantage is gone and all companies must build ways to adjust their business with the changes in the industry.