The Inevitable Often Takes Way Longer To Happen Than You Might Think
I saw the news today that Nielsen reported that Streaming Now Officially the Number One Way We Listen to Music in America and I thought to myself “didn’t that happen a decade ago?” The report goes on to say that “on-demand audio streams surpassed 251 billion in 2016–a 76 percent increase that accounts for 38 percent of the entire music consumption market.” I guess that 38% is a global number and that streaming is over 50% in the US. At least that’s how I interpret the article.
Back in 2007 and 2008, I wrote that streaming was preferable to file based media. I expected the market to flip quickly.
A decade later, the market is in the process of flipping.
I started listening to streaming audio when Listen.com launched its subscription music service (which became Rhapsody and then Napster) in the late 90s. I moved on from file based music almost twenty years ago.
Which is a reminder that something may be inevitable, but that doesn’t mean it will happen quickly.
Yes, it hopefully takes a very long time to die. Inevitable, but not necessarily in the near future. Not trying to be morbid, just supporting your thesis. Cheers.
Thank you 😉
To your health, salud!
Well said, if the things we want happened very quickly, then the same would hold true for the things we’re not so fond to see materialize.
Same story goes for video/IPTV streaming.
Semi-Related: Surprised no one has disrupted Neilsen. Seem ripe for it.
I worked for Neilsen 7 years ago and couldn’t agree more. Such an old school culture, and not in a good way.
yeah- weren’t they supposed to have died long ago? And yet they’re reporting this disruptive change today. How meta !
the ‘testing’ industry is *way* behind the curve (read as “ripe for disruption”)…this is (personally) *VERY* exciting…but let’s just keep it between us for a bit longer. 😉
There was a recent bloomberg masters podcast on the subject
Here is the link to Bloomberg Masters of Business with Bruce Tushuman https://www.bloomberg.com/n…
they are used by the government for FEC rules. So they are not going away anytime soon
So true. We are starting to finally see dispersed devastating effects of online vs brick and mortar clothing store shopping. Banking is just starting the journey. Knowing how hard it is to write new core code and drive adoption, you can see why.
Was thinking about this the other day when reading gothamgal post on same. Would she be working for Macy’s or in retail at all if she was graduating now vs. when she did? Answer: Probably not many more interesting things to do for aggressive smart people.And one thing that is never mentioned is the lack of sales floor talent vs. back in the day. Many reasons for this but one is certainly lack of margins and profit which is needed to pay for better people to work the sales floor (leave it up to others to define ‘better people’).In other words how much can you really afford to pay someone to work at the retail level if all of the profit is sucked out by online competition? So it becomes an even worse experience than it was.Some businesses are not as impacted though such as:a) Mission driven businesses (like REI let’s say) or Apple, or Whole Foods.b) Higher margin businesses (like Apple or Whole Foods)c) Businesses which have an employee upgrade path (like Enterprise rent a car with college students given opportunities in management).d) Small nichy type stores (like the local wine shop or guitar shop).Then we look at who ends up wanting to work in retail to begin with when all of the activity for young people seems to be to work (at least for some) for a ‘startup’ what appears to be an easier path to making it big quickly (not important if that is correct but it is the thing many people think).
Same store sales of Whole Foods are in a free fall.
Here is my un-scientific response. Why is the mall so damn full?? I hate that place, but now my teenager wants to go. I actually look forward to her being able to drive so I don’t have to go to it.
I think that it has to do with convenience and densification. Don’t you like to get some coffee an sit back and watch people passing by while your family does the shopping?
I think people view shopping as an actual activity. An experience.Nope really don’t like getting a coffee and wasting time.However, I am upset that Macy’s got rid of their classic sports bar from the 1900’s in their Herald Square Flagship Store in NYC.My old girlfriend used to laugh. She said she would open the door, and 100 men used to turn around and look, one would get up to pay and 99 others would turn right back around. She said it was one of the funniest things she ever experienced.
That store is amazing, the last time I was there I could use the wooden escalators. I also saw mice running through and around the Christmas decorations.If you ever see me having a coffee or walking relaxed somewhere, please assume that I am into deep thoughts about very trascendental things. 🙂
I actually don’t think stores are going away completely (particularly for clothing). I think it will decrease, and brand loyalty + its relationship to fits will matter.Outside of that, how will you really know if a brand is good
Sounds like VR/AR type of situation
Well Mark Cuban knew exactly when to flip …. from streaming.
And then you have vinyl sales outperforming digital downloads: https://www.theguardian.com…
Cool. I love vinyl
Who can forget ‘parents not home, blast stereo’. Iirc, needing money to buy good speakers, turntable etc. could have been one of my first motivations to earn money. Next was money for a car….
I recall playing vinyls on an archaic turntable attached to a mono tube radio amplifier and a speaker box, not sure about the fidelity but I do remember the thing was very loud, clear and without any distortion. Anytime we threw a party the cops came to make us turn the volume down.
Which is why linear video is not dying the way most people on here have predicted for years. Don’t expect it until the 2019 recession
We introduced online ordering (clunky as hell, but cool) at Boloco in 2003. We thought it was game changing. For 6 years it hovered at 1% of sales or less. In 2009 we switched platforms to one we didn’t build on our own and it rose to 4-5% by 2014, even with a permanent 10% discount in place. I was SMH the whole time. We switched again and in 2017 we are still sub 10% as are most others (with a few notable exceptions). If 100% of Amazon purchases are made online, why hasn’t something as every day as lunch and dinner made it to 50%+ mark? Can someone enlighten me (hopefully with something I haven’t heard before, but I also value repetition so don’t hold back).
Great question. I’m a happy customer, by the way. Never online, always enjoy the walk and the brief wait in line. 🙂 My favorite habit was School Street breakfast in 2014. Mmmmm. Get there by 11:00 am.
Sorry, I was dreaming about mini scrambled egg burritos with black beans. When you order in situ and watch it get made, you can catch any mistakes quickly. Not there ever were any great mistakes of note. And oh yes, the Jimmy Carter milkshake …
Thanks for that. Sorry we had to sell School Street. Congress only a block away, hopefully working for you. 🙂
my hunch (as a total outsider to the industry, and thus a likely useless opinion) is that an aggregator is needed. but the economics for such an aggregator seem very challenging.
They have been challenging to date, it seems.
When I decide to leave for lunch, I want to just get up and start walking, not wait around and pull up a website to order first. In fact, I’m usually deciding where to go after I’ve already started walking. Ordering from a phone while I’m walking is awkward. Easier to wait till I get to the store. Now if I could (at the store) drop in an order on my phone that let me skip the line in front of me, I would. I think that’s the fundamental problem – when you’re walking to the store to pick it up, it’s hard to wait and order before you leave.Getting food delivered to you is a completely different story. Domino’s online ordering system is poetry in motion. (and you can see it in their stock price). I will order online every time if it can save me a trip, and if delivery is both prompt and doesn’t cost too much. I’ve ordered Boloco from DiningIn many times.
Agree on Dominos.As for getting to the location and ordering there, the mobile app (which i should have included in above) is always right there at everyone’s fingertips. It is part of the stats above.
Interesting, I remember seeing the signs for it, I guess I just assumed (incorrectly it appears) that it might take 5-10 min to process an order received online, so by that point the time savings would be relatively small. Also, getting me to install one more app on my phone is a psychological hurdle. Guess now I’ll have to actually try it out!
Are you referring to online delivery or online order and pick up? If you don’t provide delivery service, then pick up times or windows may be perceived as too restrictive and hard to manage (“I always get tied up when I should be walking out the door.”) If you provide online delivery service and sales still are small, I too am SMH.
I’m genuinely curious – what does online ordering gain you? My first thought is that you can make the burritos faster / more cheaply if you don’t have to listen to real-time customer decision-making, but does it play out that way in reality? Is it significant enough to move the needle? The only other thing I could think of is that if you could recognize and save the customer’s top 3 order preferences at the top of the ordering app, it could make ordering easier / better experience for the customer and thus increase your customer LTV. But is that correct, and/or is there anything I’m missing?
I don’t know much about this stuff, but, I do think I’m seeing *more* people using the Dunkin’ and Starbucks apps now than not. Especially in the Dunkin’ drive thru. (Although I have yet to join in, and I think it’s because I’m not a daily customer.)Maybe it requires thinking about which specific customers would benefit the most from online ordering and understanding what about your online offering doesn’t meet their needs. It seems like the big advantage of the app for folks is time savings — no waiting in line to order, quick payment by just scanning the app (or even already paid?).Maybe it just needs a loyalty program, ha!
Most people overlook a principal factor in this trend, young people are going into the music at the rate that they did in generations past.
the gap between when the investing opportunity window is closed and the market proof happens can be a damn long time. And of course, sometimes never.
Can you explain, maybe with an example? Not sure I get what you mean.
sure–you invest way ahead of the market curve.when everyone knows about it it is late.but it take time, often a very long time to get to market usage if ever.so there are funding cycles, deployment and success cycles.as a consumer in mainstream you may only know about it in the last phase.
but you can also invest too early…Timing it right is both skill and luck.
life is timing and luck…
Amen to that!
Got it now, thanks. Though not the same thing, reminds me a bit of the early adopters concept in Geoffrey Moore’s book Crossing the Chasm. Had read it and found it interesting. This is more like early (or timely) investors.
Great post – a decade is such a long time in this industry!It’s so easy to forget how long it it may take for the obvious/inevitable to happen. In the meantime, startups die by the wayside…It seems that these slow-moving transitions are especially common in consumer markets (vs. B2B.)
in a small assisted-living type place in Dartmouth, MA… far outside our little urban, techie bubbles, lives my grandmother, who owns a ton of CD’s…and further yet, on Cape Cod, my parents are in their house, listening to CD’s, maybe even shuffled up via their 6-disc changer! and when they venture out in their cars, they’ll turn on the radio. not Sirius. straight up radio.small sample-size, but poignant still (for me at least).
part of the issue with most VC – forces timelines on companies when patience for a market to hit wins…i think you said it once when you said companies need time to experiment.
ps…can i ask, when you do investments at usv when:1. Wave is super early 2. Whole market adoption is unclear Do you – as rule of thumb – get companies to burn low till demand is clearer:?
I agree Fred. VCs are way to short sighted in general. I’ve developed a business model/technology that if properly implemented will inevitably replace the current credit card network models. It takes a little time to fully comprehend. Unfortunately a venture capitalist’s time is much harder to get then their money. Perhaps this is part of the reason why so many funded ventures fail.
“inevitably” – a bold statement 🙂
it is time for some inevitable matrix reference…https://www.youtube.com/wat…
Carefully chosen word.
I love streaming and have converted 70% of my listening to Spotify and 10% to Bandcamp and Soundcloud. HOWEVER, I’m still too weird. There is just too much stuff that is not on any of the streaming services, and it’s terrible the way things become available randomly while others disappear. Being subject to licensing whims and catalog wars while I pay my money is a bummer.So I still have a few hundred gigs of files, most of which are things you cannot get on any streaming service. That part right there is what I want to get rid of, but nobody has the solution.And the first person who recommends Apple Music or iTunes Match gets a 😛 Tried those. Don’t work.
I put my music on an external backup drive, but also load them into both Google Music (the free version) and Amazon Music (the super cheap version).They give me ‘cloud’ access to my otherwise un-available tracks (and playlists) via my phone and other mobile devices (including my Echo — but not my Google Home yet [ranted about that a few posts ago]).
I may try the Amazon’s play in this space. I have Amazon Cloud Drive, Prime, and whatever else they are selling me these days. Google Play didn’t work at all. Limit was too low (50,000 songs). Will check what Amazon offers.
They both have kinda small limits IMHO – but I make them work as best I can…
“You can’t get so far ahead of the parade that no one knows you’re in it.” – John Naisbitt
How long did it take to flip from live music (as the only way to listen to music) to vinyl?
I think your response means you underestimate radio. Despite its shortcomings, it’s free and ubiquitous. So, it’s hard to displace. Especially when you have a cell plan that charges by the Gig.
A lot of things in the tech world are this way. Ask any ordinary person (and a lot of very well informed ones too) the percentage of retail sales represented by e-commerce and most people will say 25-60%. The real number? 8.4% It’s a rapidly growing number and I wouldn’t want to necessarily be on the bricks and mortar side of the divide, but it’s interesting.
That is right. I made a comment about the mall. Now do I think retailers need to realize that they are in a declining business and make money? Yes.I think that is one of the hardest things for business to do. Just realize you are in a flat or declining business and milk the hell out of the profits.
Or recognize that the world is different and change your business model to have greater longevity. Milking profits tends to accelerate the decline.
We strongly disagree.You see I think there is nothing wrong with maximizing (not milking profits)If investors want to put that into a new business? Great.I have seen more value killed by management that did not start or own the business try and make a low or no growth business become a high growth business.
Most of the time, inevitability is a mirage. In streaming music, for example. It has advantages, and it has disadvantages. The reason it appears inevitable is that the incumbents keep on doing the same things that made it attractive for the new entrant in the first place, which usually includes extracting high rents for low value services.In the case of music, the margins for hard copies (CDs) were outrageous, and a lot higher than for the vinyl that preceded it. These margins were justified initially because the cost to make CDs was higher, and they were sold as being a better digital platform. By the time everyone decided to switch, costs had fallen dramatically, but the price of a CD never did, and that in a nutshell explains why the sale of music began to fall precipitously, especially when it became practical to rip and share files.Publishers were greedy, and accused their users of stealing, when in fact, users were doing the only rational thing they could do in response to extortionate pricing and outrageous margins. Even though Steve Jobs succeeded in getting publishers to reduce the cost to download a (lower quality) file and briefly cause a resurgence in music sales, it was still an unnecessarily (unreasonably) high margin on a not-as-good product.When you combine a radically lower price with a few conveniences, streaming looks inevitable, however if publishers had made high resolution files available at a reasonable price 15-20 years ago (instead of trying to preserve the CD market), and focused on innovations to permit or even encourage sharing, streaming as a business might never have happened, or it would have remained a tiny niche. Instead, we have purchase of music becoming the niche because the new services looked at the broader job-to-be-done for music and were willing to experiment, be creative, and offer more of what consumers wanted.In this example, it was Sony, CBS, BMG et al trying to milk profits from the sale of physical CDs that accelerated the decline of that product, and “owned music” more generally, and enabled streaming to become the new dominant way to listen to music.In my experience, and in my work, whenever I see a company or industry go into “milk profits” mode, I see opportunities for disruption. There is not really any such thing as a low growth business that can be disrupted, only a low growth mentality or business model based on thinking about a specific vehicle for delivering a product or service, rather than thinking about what it is that the consumer really wants to get done.Streaming is really just a better version of radio that offers more control. We have gone back and forth a few times between ownership and sampling (radio-style listening) in the history of the industry, and preferences are dictated by business model and price, rarely by the product. With the right model, ownership could easily reassert dominance.
Apple killed a significant share of music rev w/ the $.99 download. No longer a need to buy multiple tracks, which CD’s delivered along w/ a higher rev stream, even when the price of CD’s began to drop precipitously. The real losers here? Not just artists and labels, but listeners, too. No longer is there an opportunity for music (CD’s or multi-tracks) to grow over time, as they did w/ LP’s of yesteryear. There’s too much pressure today to generate “hits,” which has dramatically influenced the creative process, and not necessarily for the better.
All of what you say is conventional wisdom of the music industry, and a big part of why they were so badly disrupted. Apple didn’t kill any revenue that had a chance to continue, and in fact did the music industry a favor by pointing them at a more reasonable price point.Whether you call them hits, or singles, it matters not. Until the long playing (LP) record format was introduced, almost all music was consumed a song at a time, whether via sheet music, 78s, or 45s. The only place where music was heard in the greater context was in concert or public radio. Music (popular music) has always been about hits, and you can’t ask people (especially kids, who are the biggest consumers) to not prefer hits over an album full of stuff they don’t like, and don’t want to pay for. Additionally, some albums are great, but many have only one song that is even listenable. There are lots of individual tracks I might be prepared to pay for where there is no way I’d buy a CD for $20 if I didn’t like the whole thing.There is plenty of opportunity for album sales to grow over time. There are still core groups of influencers who will listen to and/or buy whole records and pass their thoughts on to others who follow their lead. There are people like me (and it sounds like several other here) who simply prefer to buy the album, even if a few tracks are turkeys. The difference today is that streaming services exist and are rapidly growing, and no one has to buy music if they don’t want to — that isn’t Apple’s fault, and I suspect they’d be happier if competition from streaming didn’t exist.The fact is, music sales went up quite a lot initially with the advent of legal downloads on iTunes, and profits even more, since a huge amount of cost to press CDs or records, and unnecessary intermediaries in the distribution chain simply disappeared.Total music consumption, though it was more singles-oriented, went up dramatically, and didn’t start to fall off a cliff until streaming services took hold.The fact is, music sales volumes were in free fall before the iTunes store opened, declining 25% by dollar value (which equated to CD volume, since that was really the only format at the time) in the four years before iTunes opened for business. This is directly attributable to trying to keep on charging extortionate rents, while consumers found ways to avoid paying them, such as Napster and the myriad of other file sharing services of the late nineties. If iTunes had not come along to enable legal music downloading, it’s very likely the industry would have collapsed completely, insisting their prices were fair as they went down for the count.Revenue is not an entitlement, and you can’t force people to go with the business model that you want based on monopoly control of the product. Industry costs went down, but they insisted on trying to force people to buy CDs at high cost and high margin for years past when that made sense or was fair for the industry and its customers.Bottom line: tech changes. Business models change. We are all in competition to satisfy what consumers want to accomplish at a reasonable price. Companies can charge whatever they want, but when you over-charge, you make yourself vulnerable to disruption, and you have no one to blame for that outcome but yourself. Surviving and thriving is about constantly adapting to new realities, not sticking with wishful thinking as a strategy.Think about this a different way: if you had to pay for the computing power in your phone based on what it cost in 1980 dollars for the tech, you’d be paying probably more than $20M for it, and none of us would have one. The music industry would prefer to keep charging people based on the cost of a CD in the 1980s — that’s an invalid comparison in today’s world.
I think we are talking past each other. I don’t subscribe to words like “greedy”What words I do believe are “reality” and “disruption”These are very hard for executives to face.For instance, if you are in the business of providing items that people know they want to buy, you better get as efficient as possible to compete with Amazon. Strip out all extraneous layers of management and expenses.If you are supplying a commodity like gasoline, get the best locations and supply chain.Same for music or books. If the cost for distribution goes from shipping records or printing books to downloading bits, you better adjust your model super quick.I still however, believe you can be very profitable. But you better strip out costs faster than the costs of the underlying good has come down.You have the momentum.This is really hard when you don’t own the business you are just a manager.Do you want a: $10B business that makes $500mmor a business that turns into a: $2B business that makes $750mmWell if you are putting the money into your pocket it is obvious.However you have to strip out $8.25B of expense. That’s a bunch of friends, jets, perks, and people that are kissing your ass.Tough if you are just a hired manager.
I don’t think we’re talking past each other that much (maybe a little).When I say “greedy”, I mean employing a skimming strategy (exploiting a ‘cash cow’) that leverages some (temporary) monopolistic advantage to maintain very high margins. This is what pharmaceutical companies are doing, for example, and it is harmful to their customers and will come back to bite them. In businesses where it is easier for upstarts to launch and where demand is not so inelastic as it is for EpiPens (for example), it is a suicidal strategy that virtually ensures a disruptor will emerge — all that economic surplus is very inviting to competition and means there are lots of ways to offer a better deal to customers, and still make a good profit. There is a bit of value judgment when I use the term, but it is more about stupidity and short-term thinking (although the greed in the pharma business is also immoral in my opinion). So, if you still don’t like the use of the word greedy with those qualifications, I accept that — for me it is a short hand for dumb decision making.re: being hard to face. I agree. That’s why there is a business for me to advise and teach them. What is clear is that older models that we took for granted for much of the last 100 years no longer work. We’ve gotten very efficient at seeing opportunities for disruption and creating new companies which feed on the excessive economic surplus and create larger markets in the process. Companies would do well to consider as part of their risk management creating a straw man competitor and creating a business model for it capable of decimating their own (using whatever proprietary knowledge they have of their business). That is a truer threat assessment and indicator of potential disruption than anything else they could do, because it forces them to think beyond their industry and who they consider to be their direct competitors. If that straw man is a substantial competitive threat, then the best strategy is to start becoming it before it emerges organically to defeat you.While the dilemma you suggest looks bad on paper, it rarely is that dramatic in real life, but even if it is, the reality is that if your costs are 5x what a competitor can offer, and that competitor is also able to offer superior convenience, ease of use, flexibility, etc, then that competitor is guaranteed to emerge, and they will be unstoppable. The hired hands at middle management levels may not see it as desirable to change, but that’s what CEOs are paid to do, so it isn’t that tough unless you don’t value your reputation and stock options and future employability.In everything else, I think we agree.
I agree we agree 🙂 I have seen more than one business where costs have come down more than 20 fold. See a classmate’s Josh Koppleman on this: http://redeye.firstround.co…I agree trying to keep prices where they are and extract a huge surplus never works.I guess my point is this, which I appreciate you make me articulate, is that if you are willing to cut faster and be more efficient, even in a shrinking market you can make money.Best regards.
Completely agree. Not just make money, but sometimes make more money + avoid possibility of disruption if aggressive enough. This MO is one of the reasons Amazon + Google own near monopolies in several business domains. 20 fold reductions are rare, but agree, they do happen. Even a 50% reduction is enough for a competitor to eat your lunch if you aren’t proactive.I’d be careful about saying “never works” though. It has worked in pharma precisely because demand is inelastic and until patent protection comes off, it’s impossible to have a product which is chemically the same functionality. That’s also why they should be much more regulated than they are — the same way utilities are. There isn’t a free market or true free choice to not consume, therefore they should not be allowed to set prices wherever they want. I guess in that respect, you could say it isn’t going to work for them either, because they are inviting the government to knock them down.
Read Josh’s article. Wasn’t thinking of it the way he describes — it completely makes sense when you turn it on its head and attack embedded cost that competition can’t shed. This does happen all the time (classic example Netflix v Blockbuster). Would like to talk offline — you can track me down through my disqus profile if interested.
Although that real number rises to 18% in China. They have jumped over big box and modern format retail stores to e-commerce, similarly to how India jumped over land lines to mobile. One of the reasons why things are changing more slowly in the US (but steadily).
And in practice, writes Music Business Worldwide, here’s how very popular streaming looks:”In their first two days on Spotify (up to end of Saturday, Jan 7), the two tracks have racked up over 23m streams between them. That’s around half a million plays every hour.”http://www.musicbusinesswor…
Can you compare the count of digital downloads of a particular track vs the times that track is played via streaming? I don’t think so.
Don’t you need to track for royalty payments?
I don’t know if the streaming companies pay royalties per the times a track is streamed, I guess not. Would be interesting to know how they pay for the rights.But my point is if it is correct to compare the times a track is streamed with the times a track is downloaded, because in the case that a track is downloaded and assuming that the buyer acquires perpetual rights to play it privately, no one knows how many times the track will be actually played.Now I am confused. This is how coding can damage your brain. 🙂
I really disagreed when you first said this, largely because there is so much material I listen to that is not available in the official catalogs (old stuff, remixes, live recordings, obscurities). However, streaming has grown to meet the majority of my needs (opening up lots of stuff that was hard to find) and Google and Amazon adequately support uploading your library and streaming it to yourself to supplement.
The ubiquity of mobile bandwidth and the fact that networks now provide you with relatively cheap access has accelerated this IMO. Prior to this I was file based because I wanted music in the car or on the beach, now via google play music I have instant access to just about anything I want and if I’m in the gym my smartwatch stores enough music offline to keep me happy.
The problem is that (current) streaming is an opaque business model decided ad-hoc between gatekeeper (Spotify, Apple) and artists.I prefer the pay-per-buy model, where I voted and gave money directly to artists. Maybe there should have been more pricing options (20 cents, 50 cents, 75 cents, 99 cents).Now we have everything.. and we have nothing.
“Now we have everything.. and we have nothing.”Exactly.
If it’s true that we’re in the middle of a pendulum swing back toward the client, as Peter Levine proposes here http://a16z.com/2016/12/16/… then is it also possible that we’re going to see sometime soon a move back toward a device having everything we need already on it?It’s not inconceivable to think that the 1000 or 10000 most popular movies on Netflix (for example) will be on everyone’s phone all the time. When we’re in wifi, the content refreshes automatically. Or, more specifically, the 10000 movies I’m most likely to want to watch. Same with music.To your point of things always taking longer it is also true of network speeds. If that’s the case, then my ability to carry everything I might want around with me instead of relying on the network may be in the future. I think of Netflix now providing offline (which Spotify has done for a while now) as a signal that the devices we walk around with are going to be doing more and more (including storing more).
when a new thing goes from zero to something in a few short months or years, it feels like it has taken over the world because it is growing at triple digit growth rates and setting a blazing trail. But the new thing that is now something still has a long way to go to displace what existed before it came along. But with that kind of growth, both private markets and the cultural mores of our times typically value the new thing as if it has almost become a big thing. It is this disparity that creates the dissonance.
Great observation Fred, and probably a reason why entrepreneurs should pick projects they are deeply committed to.
@fredwilson:disqus where do you think digital encryption and things like a “no password” world fall in this spectrum? At the iPhone end of the spectrum or the streaming music end of the spectrum? Once the core innovation is confirmed, the inevitability seems to be influenced more by market monopolies rather than consumer behavior. Brings me back to @philipsugar:disqus comment above (below? as i type this) — monopolies have no incentive to accelerate disruption and often have a fiduciary responsibility to retard disruption to maximize their profit extraction window.One of the reasons i dig applying lindy effect.
Napster and alike really built the proof of concept for peer-to-peer transmission and music sharing, brilliant on vision!Amazing what a few Outsiders can do with a powerful idea…
Thanks Fred, this is a very true statement indeed. At CES I was asked by each and every cabbie if self-driving cars would put them out of work. While the demo can go on, it more likely will take many years to your point. Details (and often regulation) make a big difference and as project completion rules often show, the last 10% can take the most time.
By watching the film “All Things Must Pass” about the rise and fall of Tower Records, I learned that the Tower brand carries on in Japan. They still sell CDs there because access to streaming services are limited by the government (at least they were at the time the film was made). Talk about an interesting cultural phenomenon given the history with the Walkman, other personal listening devices and all that came from it thereafter.
I needed to hear this on a personal level”The Inevitable Often Takes Way Longer To Happen Than You Might Think”True in life
I’m still on file based music, essentially. 80% of my listening to music time is while:1) while running outside2) on the NYC subway or amtrak3) drivingNone of these places have reliable wifi, or even reliable cell coverage many times. I have few doubts that listening to streaming music while working or at home is probably everyone’s #1 use case, but I think my case is pretty common, too.
What was the first smartphone?
I’m with you 100%.Perhaps it’s our age (or how different the world is from *our* youth).Perhaps it’s a trust or an experience issue (I’ve had the rug pulled out from under me regarding the gray area of ‘ownership’ more than once — and it’s a frustrating and infuriating experience). I’ve also ‘lost’ important things because of hard drive crashes, platform price hikes, as well as internet and cloud ‘issues’.So whatever it is – I much prefer to ‘own’ stuff.I’m in the habit/mode of backing up a lot of what I ‘own’ to the cloud as well as pushing it into some platforms (because they make access easier/better)…but at the end of the day I still really prefer ‘owning’. It gives me a sense of freedom (maybe just a perception thing, but still a *real* thing for me).
Generational thing. Hip hop (younger listeners) is driving streaming, while most recent surge in vinyl driven by death of older, iconic 70’s artists and their catalog (e.g., Bowie, Prince, Frey). A bigger generational thing for me is sound quality. When did that become un or considerably less impt? Sound quality w/ streaming imo is pretty bad. Recently my gf insisted we trade our nice living room B&W’s for a Sonos primarily for aesthetics. She amazingly couldn’t hear the diff. I drew a hard line w/ our den set up. I still have about 300 vinyl LP’s, pops, clicks, warts and all.
streaming music services are beholding to copyright holders. they strike an agreement, build a platform, gather a user base, become a success, and then the agreement comes up for renewal and the copyright holders jack up the price.
Charlie, I’ll be first to admit that I don’t wholeheartedly agree with you often, but every one of these points resonates with me, and are among the reasons I will always want to own my music, regardless of format. There are two other factors in addition to these that are important to me:- quality. Whenever possible, I only purchase high resolution tracks, which on good equipment sound absolutely stunning — they are the closest thing to actually being in the presence of the artist, and communicate the intent, feeling, subtlety and dynamic range as closely as can be done in recorded media. The lowest fidelity I will accept is CD-quality.- artist compensation. I want to ensure that new (and high quality) music continues to be produced, and that artists are rewarded fairly for their work. Much as many of us choose to pay more for fair trade coffee, when we have some assurance that the growers are getting a bigger cut of the retail price, artists get a bigger cut of music that is sold (particularly when it is sold as high-rez downloadable files, and get the lowest cut possible on streamed music (far lower than radio, for example). Yes, with streaming the public gets a lower price to have any music anywhere, but that comes at the expense of the musicians, and that doesn’t sit well with me. I’d be happy to cut publishers out of the pie (they have traditionally taken a huge cut because the production costs and capital expenses for studio and recording equipment and marketing and distribution used to be so high. They are now largely useless middlemen.)Ownership will be a smaller niche for the foreseeable future, but it isn’t a segment that is likely to ever go away.
I too am a believer in still owning the music I listen too. I do use Pandora as my “radio,” but for any specific music I want to listen to on demand I buy the MP3s, usually from Amazon. Then I sync them back up to Google Music so I have access from my phone, and upload them to Google Drive as a backup.
Right on.I can’t stand it when I save an album in spotify only to return a couple of weeks later and half the tracks have become unavailable. It happens with monotonous regularity.Besides which, most people seem to substitute volume for clarity. There will an entire generation that is hearing impaired.
How can any of us really tell the speed of change? We have unique views on the progress of time
I’d go with the IBM Simon in 1994…
Was listening to a podcast w/ Jack White who says he always records in analog. Amazing what early artists accomplished w/ overdubbing on a 4-track. Ironically, the bar for in-home audio sound quality is now pretty low for most listeners, while ‘live’ concert venue sound quality keeps getting better and better.
you’ll laugh, but I don’t always get analog. I rather just hear live. Streaming and digital sounds normal to me, since it is essentially what I grew up with
90 is old Charlie. don’t write yourself off just yet.
It isn’t an age thing. My kids prefer better sound, and like the better quality sources and equipment, they just can’t afford it. There is only one side benefit of streaming besides cost that is age-related, and that is the ease of sharing discoveries and playlists — something we all did as teenagers, but it was a lot less convenient than now.
i don’t remember Simon. i do remember the Nokia 9000 Communicator. a brick.
+1times change, and not.
I remember reading about Lititz. For years I wouldn’t go see a concert in a large, cavernous venue, unless it was Carnegie Hall, Radio City, etc., or venues specifically designed for good acoustics. In retrospect, I missed out on a lot of good shows when bands outgrew smaller venues and went big. No longer the case. The last big venue concert I went to was David Gilmour at MSG and the sound was incredible.
Yeah, we have different (opposing) philosophies on many things, but sometimes we are so opposite we meet at the same place. I’m sure you’ll get over the trauma.I looked at Pono when they first set up their online music store, but I didn’t see any advantages to it. I get most of my stuff at HDtracks — they’ve been at it a lot longer and have a bigger selection (and a working store. Pono has been offline for a while.) Met Neil Young and listened to first version of the Pono player a couple of years ago at CES. It’s pretty good, but I think there are a lot better players out there too especially if you don’t mind spending large money. Pono is probably the best hi-rez player at an accessible price.Apple is confused about what business they want to be in. They don’t seem to want to sell iPods or iPhones with sufficient storage to hold large amounts of files, haven’t improved the basic tech in years, the best they offer is “lossless” compressed which is not truly lossless, so there really isn’t much point to offering music files for sale. Instead of improving quality and driving down prices (the natural progression of most businesses), they held the price and decreased quality, and then took years to respond to alternatives, which I think has a lot to do with the speed that streaming services have taken over.There are some interesting new models out there, especially for Indie artists. You might be interested in this company: http://www.bittunes.com/ It’s sort of bitcoin meets co-op platform, where buyers are rewarded for helping to spread the music around. Artists do better here as well. Actually, I’m a little surprised that Fred isn’t involved with them — bitcoin and peer-to-peer networking are central to their business model, but that could be a reflection of his belief in streaming vs ownership.
To play the goat hoofed advocate: apart from very lossy files, the difference is more likely all in your head https://people.xiph.org/~xi…
how do you think comp should be structured
Yes, and that’s part of the appeal of Spotify. It’s like radio + mix tapes made easy. But, there’s no reason that iTunes couldn’t have offered a way to do this 15 years ago. Sitting on your thumbs for a long time is sure way to help disruptors get established and promote “inevitability”.
I’d love to take a visit with you there. Reach out next time you go.
Not to mention quality of music production and mixing. Looking back I am sorry I goaded you into this post – because although I think there is a lot of placebo effect in the audiophile world, I also know how real the differences can sound depending on what you describe above. Plus it is so much darn fun to set up a rig and play a pure vinyl while reading the liner notes, I wouldn’t want to dissuade anyone from doing that. Truth is I’m right there with you on this one.