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Why Dave Allen Is Right That David Byrne Is Wrong About Spotify

· October 18, 2013

Dave Allen, an English musician who now also works in digital strategy and runs a record label, had a great op-ed this week in the Guardian, which was adapted from a longer post on North.com.  Allen was responding to a recent David Byrne article that vilified the Internet and streaming services’ impact on artists.  Allen explained how Byrne was wrong, and wrote a really thoughtful piece about industry shifts in response to technology and competition, and the benefits of changes in the music industry for musicians and music fans.

This is reminiscent of the Sky Is Rising report prepared by Floor 64 (and co-sponsored by CCIA), which demonstrates that despite legacy interests in the content industry decrying the effects of the Internet on their business model, the Internet has enabled more creating and disseminating and, yes, profiting from content more than ever before.  People are able to do this without having to rely on industry gatekeepers, who are likely making less money than they used to be.  But while disintermediated middlemen are losing out, consumers and creators reap the benefits of the increased availability and affordability of more creativity.

Early in the Guardian piece, Allen makes the point that it’s not a technology problem but a business problem; the industry is in flux in adapting to new markets:

The internet and Spotify (or any other streaming music service for that matter) are not to blame for musicians’ problems. . . . It is not about technology; it’s about systems and societal shifts. It’s also about music business bubbles.

Later, Allen discusses the phenomenon of incumbents facing competition from startups, which is something DisCo often covers (see, e.g., posts on Uber, food trucks, Airbnb):

And yet, when we look to other industries that the internet flattened, it is hard to find many articles written in defence of travel agents who had to adapt to competition from websites like Expedia, or go out of business.

In the original blog post, Allen wrote even more about disruptive innovation and competition, which is of course DisCo’s namesake:

Let me give you some quick examples of how the Internet disrupted certain markets and what happened to companies who didn’t pay attention to that simple fact.

Despite the societal changes apparent to anyone who owned a digital camera or currently owns an iPhone, companies like Kodak, Polaroid and BlackBerry simply continued to double-down on their efforts to combat change. And by change I mean combat what people were actually doing – they no longer used cameras that required film, they no longer wanted Polaroids nor did the BlackBerry remain the telecommunicating device of choice. This was not fantasy, it was fact. The results of people’s buying actions clearly showed that when they switched to products they preferred, discarding what they considered less useful products, then marketplaces changed. Kodak is in bankruptcy, Polaroid is struggling to be relevant, and BlackBerry has put itself up for sale after plunging from an 80% market share. Let’s not forget that the iPhone arrived in June 2007. It did not exist prior to that. It completely disrupted the marketplace for smartphones just as the iPod before it had become the Walkman for a new generation. Apple created a new marketplace for music.

It is always great to have the message reiterated about industry disruption and the need to adapt to new markets, even when your current revenue streams are at stake — the classic innovator’s dilemma.

Another highlight for me was the mic drop at the end of the Guardian piece (a similar one appeared at the end of the original):

Meanwhile, appearing to be elitist and luddite is not a good way to win over today’s music fans to one’s cause: let’s leave that to be the historical legacy of the recording industry.

Successfully competing in the marketplace requires understanding what the consumers — what the fans! — want, which tends to be online streaming, as piracydata.org demonstrated again recently.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.