The world is not flat, why the music industry has a future

It had looked as if the story already told to the end. The the rise and fall of a gigantic economic industry, the music industry. Seemed to have come in the invention of the record and its final point with the extinction of their CD early.

Maybe both wrong. At least not the beginning. In the beginning was namely not flat, but a roll of wax. The famous physicist Thomas Edison had developed in 1888, 10 cm long, with a diameter of 5 cm. You what the first useful Audioaufzeichner and player. Several minutes of audio could preserve the wax cylinder.

Not in form, but in the art similar to the roll already the later LP: To play the rotating wax cylinder was sampled with a rounded diamond.

The subsequent history of recorded music is widely known. On the wax cylinder was followed by the more durable and reproducible gramophone records of the German inventor Emile Berliner, the record, the tape, the Compact Cassette and finally the Compact Disc.

It was not even a question of time before the technological inventions of the economic benefits followed: Shellac plate inventor Berlin had in 1887 Gramophone with American Co. established the first record company world, followed by Columbia Records and in 1898, with German Grammophon, the first German record company.

Pretty soon had apparently realized that technical progress allows a brilliant business model, namely to copy a once-captured millions of times, and then again individually for sale.

One-time production costs and low variable costs – such an economic logic needs one thing above all: fame. So even let amortize fixed costs of production resulting in lightening speed. The reproduction technology made to Gold Stars donkeys.

In 1921 the sales mark of $ 100 million has been exceeded in the music industry of the United States for the first time, 1967 Been more than a billion.

The rise and diversity followed by the concentration. Record companies bought each other out. Today, the recording industry is oligopolistic structure. There are few large suppliers, so-called major labels, and a number of smaller record companies (independent labels). The Big Four, which are: Universal Music Group, Sony Music Entertainment, EMI Group and Warner Music Group. They reach a global market share of 71.7 percent.

The crisis began in 1997. The reason was the same, which the industry had made possible the rise: technical progress. With the massive sales of writable CD for the first time held a technique in household collection, which enabled the cheap reproduction without loss of quality. One could say that the music industry has been beaten at their own game. What she had done great, let them now shrink again. Because they had lost the monopoly on cheap and quality reproduction.

The music industry fights since then with a strategy against relegation, which can be observed in many dying industries: with defense, the preservation of the status quo. CDs were provided with copy protection, with lobbying is fought for the tightening of copyright and – since the Internet and the MP3 audio format lets the paragraph further crumble – with waves action against those who download music without paying for it.

The defensive battle may have slowed the decline, he could not reverse the direction. Anyone considering strategies for the defense, has no reserves for new ideas, for offensives.

A whole decade held the music industry secured to a business model that was created in the pre-Internet era. As would still only sells vinyl records and CDs, individually packed, inserted at the checkout in a bag, torn open at home, hung up and played.

The music industry maintained a business model that has been developed, as has been paid for a physical equivalent. Today, however, music is digital. You can still have music, they were raised in an IKEA shelf and when this is full, pack boxes for the cellar. Only necessary is no longer the. Gigantic music collections fit today on small hard drives. And that need not even be kept in their own home but can manage safely by Internet experts, are available on the Internet, keyword: cloud computing.

Slowly the new technologies seem to generate new income opportunities. Business models, build that ownership is becoming less important. Not for the ownership of music will be paid in the future, but for access to it. Not the preservation of a collection on lifetime is more the goal, but the making available position of what just interested – as could the business model, the cash cow of the future, look.

That will not work, complain conservatives. The man wanted to have, would not again give the once acquired, would preserve the solidified since his own youth musical taste tangible phenomenon. Maybe. Maybe not.

Perhaps the handling property also follows fashions and technical possibilities. Maybe you will be surprised in 50 years, how could barricade living room with huge books and records and CD-shelves. Perhaps the removal of visible evidence of even experienced ones can also be a liberation.

We do not know. Not yet. The technical progress will have it. It started with the fact that the e-book the bookshelf makes competition, now gets the music industry a second chance.

In Germany, the foundation stone was laid for this month. The GEMA (GEMA) and the Federal Association for Information Technology, Telecommunications and New Media (Bitkom) have signed an agreement, which regulates the level of copyright fees that must be paid for the online sites of music on Internet music portals. Between six and nine cents should be paid per song.

This lays the foundation for a business model in which the customer is no longer individual pieces or albums for eternity buy, but paying for it, that they gain temporary access to millions of songs. The music lovers can now for two competing business models decide (he in legal channels of music procurement remains): Either he has relatively few music titles on a permanent basis or if he has the choice of all available music, the but only so long as it pays.

There is some evidence that the latter is the model of the future. Because, who grew up without a CD, do not come to the idea of wanting to replace the MP3 player through a CD rack. Because with music streaming the desire is awakened to new music. Because instead of constantly put the same CD in the player, entices a streaming subscription to go exploring. Finally million songs to choose from. One thing is certain: The history of the music industry did not begin with a slice. It looks as if the disc does not mean their end.