EMI = Every Mistake Imaginable

The past few weeks have been somewhat tumultuous in the music industry, with the departure of two of the music industry’s best regarded executives, David Munns and Alain Levy from EMI and the closure of Sir Richard Branson’s V2 record label in the USA (home of the White Stripes, among others).


It’s interesting how a total lack of recognition and adaption of a new business model is slowly killing the recorded music industry from the inside. Live music is still firing, music publishing is fine – but records – oh records, what a sorry state they’re in. A sad state of affairs, but few in that industry are acknowledging the fragmentation and movement from physical distribution to distributed consumption. The former is about a central factory making and distributing artefacts and physical products. The latter is the central factory placing content on a variety of channels and allowing people to consume at will; they choose the time, place and channel.

Every industry will move thorugh these phases:
1. Reduction in the cost of production due to technology and globalisation
2. Increase in number of producers / democratisation of production
3. Increase in number of channels due to digitasation and high cost of physical channels
4. Increase in ability to distribute through channels as internet speeds get higher and computing power gets better / cheaper.
5. Fragmentation of channels and consumption meaning large “culture driving companies” will struggle to impose their products
6. Changes in marketing and advertising – increased personalisation of marketing as fragmentation will lead to a need for greater relevance and “chase” of smaller markets
7. Decoupling of product from time or place (goodbye seasonality, hello songs from twenty years ago randomly appearing in the bottom rungs of charts).

What other ramifications?