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Want To Learn From Disrupted Categories - Look No Further

If you want to learn from disrupted industries, look no further than the music business.

Yes, I went to Depeche Mode’s concert on Sunday, a school night ugh. But it was a reminder for me of how the music industry, IMHO, was one of the first to have its value chain completely disrupted, and what others can learn from it. From monetization to pricing, to manufacturing, its full value chain was disrupted.

Firstly there was Napster (iTunes, before iTunes) that allowed users, digitally to store music on their digital platforms for free, illegally. So right away the conventional music monetization model was being challenged.

Then came the actual music production side. Digital enabled keyboards to play samples of real orchestra instruments, drums, bass, etc. etc. on a keyboard. So no more need for orchestras in the production element.

Then came the other “manufacturing” disruption of how to record bands. It moved from 2 inch analog tape to multi track digital recording. So producers and engineers could cut, copy and past elements “in the box” like we all do with a PowerPoint presentation. So no need for musicians to come back in and do an overdub.

Then came iTunes, likely “borrowing” Napster’s business model. And instead of all of us buying a $19.99 record with 9-12 songs, we could buy just the one song we liked for .99 cents. Bands recouping money to payback their record company loads were cut down to 1/10. Concept records died a fast death. And maybe we all lost a little thinking when this happened.

More powerful computers enabled the long tail of musicians to start producing in their basements on a laptop, which I think is good and bad.

So bands, beholding to record companies, who were basically banks advancing recoupable loans to bands based on forecasted sales, had to find additional and incremental revenue streams. Hence why I think we see so many bands playing live shows these days.

And now streaming - the ultimate commoditization of the industry.

I could go on, but I think the lesson is don’t be afraid to look to other verticals, categories or markets for learnings you can beg, borrow or steal (actually don’t steal) to learn and optimize your business.

For example, do a gap analysis between an industry you think is going through, or has gone through similar disruption. Put up the 10 different types of innovation of them and you and determine strategic implications and ideas for your business.


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