Mass Customization

by John Davidson
28 December 2005

More bad news for the music business.

How about this lead from that article?

“A new Bridge Ratings study says that 12-24 year olds will take their iPods over traditional radio.”

Meanwhile, music industry leaders are pouring money into yesterday’s technology.

The next generation of consumers (my kids, who aren’t even in grade school yet) aren’t going to be getting their music on CDs. Bloggers such as Coolfer miss the point when they point out the marketshare of the compact disc: the tweens are ready to ditch that medium en masse. Five years from now, the vast majority of the 18-25 demo (the largest segment of music buyers) will be ignoring the compact disc altogether. In other words, if you’re not planning for the future NOW, you’re not going to be ready when it gets here. It’s time to stop waiting for digital rights management (DRM) to catch up with culture. It’s time to take some risks and anticipate the future.

Another important aspect of the above article is how it demonstrates the growing demand for customization in the marketplace, which is yet another sign of an industry in maturity and headed towards decline. Technology is flattening the mass market rapidly, not only creating a long tail marketplace but broadsiding the major labels’ primary competitive advantage: massive scale to cherrypick mass markets. In today’s world, having zillions of marketing dollars to throw at a handful of entertainers (witness the millions spent on major label stardom gambits) doesn’t guarantee success because the market is so fragmented and robust technology can actually serve those fragments efficiently. And that’s why you see so many articles right now, such as this dismal sales report in the Wall Street Journal (subscription required) lamenting the lack of mass appeal for a handful of artists. Guess what, world: mass appeal is over, with the few exceptions being skin-deep novelty ploys such “My Humps” and “Crazy Frog.” It’s now a niche market where Top 40 means much less than it used to, and there’s no way of reversing the trend. Customization is predictable in an aging industry, and any music executive with an MBA should recognize the signs and see a revolution on the horizon.

Filed under music industry newspapers