Andy Lykens

Innovating and operating through growth

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Too big of a ship or too big of a head?

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This week HP announced that they will no longer be competing in the PC industry, instead they will be focusing on cloud computing. Hold on. What? You mean the largest PC manufacturer in the world is going to just stop. And they’re going to stop making tablets and smart phones too? Yes, it’s true. In fact, if you’d like to read a great article about what this means to their industry, check out this one.

So why am I writing about this in a blog typically geared towards the music industry? Well, as usual it’s to point out the failings of the music industry. Let’s think: when the music industry was faced with a competitor that absolutely, 100% got something right, what did it do? What was the RIAA’s reaction to Napster? And what’s more, what does the industry continue to do?

The solution probably wouldn’t have been to resign the administration of all copyrights to Napster, but in the late 90’s and early 00’s, the industry was in pretty good fiscal shape and it’s my contention that they could have bought Napster, or at least made some sort of deal. But no. What did they do? Lawsuit.

And now the industry sits atop their recent “accomplishment” of having earned money instead of lost it for the first time in years. Wow. Way to set the bar high for yourselves. I’m not sure if you knew this music industry, but you’re actually supposed to make money in ever-increasing amounts EVERY year. Not fail miserably for 10 years and then trumpet your prestige when you finally earn a few pennies. Anyway, I digress.

What is really interesting and even quite cool about this HP thing is that they’re turning an awful big ship. Everyone uses the excuse in the music industry “well it’s just too big of a ship to turn quickly!” Really? Bigger than HP? Nope. Now what’s the excuse? Oops.

Now the only thing left to blame is the ‘vision’ (or blindness) of the leadership of the major music companies.

The tipping point.

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Check this out. It’s an article about the beginning of the end of an obnoxious, intractable and downright foolish “business” mentality.

This is the first evidence that the labels are no longer going to be able to sue their way to generating income. They have been a huge pain to deal with, they have refused to adapt, and now they’re “Hoping Apple Can Force Amazon and Google Into Cloud Licensing.” Nope.

Apple doesn’t care about licensing or playing fair with the music industry they just have a better relationship with the labels and more clout in negotiations. Apple deals with the majors because it’s easy for them, not because they think they need licenses and to appease them. Why would Apple’s deal force anyone to do anything?

Now we’ll see the majors start to scramble for income. They’ll start sacrificing rights, prices will drop. I mean REALLY scramble.

Mark my words folks, this is the beginning of the end. It took a long time but the labels are officially no longer in control. They’re down to a 49% say in digital licensing. The tipping point has been reached. Big change is coming in music licensing. Big change is coming in copyright valuation. It won’t be too much longer – maybe a few years max.

The snowball is rolling down the hill.