A decade of war on its customers got the music industry nowhere, but now the internet is actually boosting sales.
The music industry has been through tough times in the last 15 years, although much of it was self-inflicted. It's hard to feel too sorry for a bunch of pig-headed, gucci-clad industry executives who were too arrogant and stubborn to see the writing on the wall.
They were told from the beginning that if you make it easier to buy music than to steal it, most people will do the right thing. Instead they stuck with heavy-handed legal tactics, draconian Digital Rights Management and underhanded trickery such as installing malicious software on people's computers (yes Sony, I'm looking at you).
To the industry's great surprise, treating customers like criminals didn't encourage them to buy more music from their local record store. Meanwhile the music industry was dragged kicking and screaming into the age of digital downloads -- eventually offering easy ways to buy music online as well as innovative new models such as subscription music services. The record companies deserve no credit for "leading the way", it's more that new-tech giants such as Apple seized the initiative and now have them over a barrel. You could say the same for most big players in pretty much every old-world content industry, former giants who failed to embrace the rise of the internet and are now being overrun by nimble new-world competitors.
Sony's Walkman was the iPod of the 1980s and 90s, but it was first up against the wall when the revolution came. Apple's fledgling music player only became the new Walkman because Sony's obsession with DRM crippled its digital music players. Sony made it all too complicated, in the belief that it was too powerful to fail, but people simply flocked to more convenient alternatives. Had Sony embraced change and played its cards right, it would be in Apple's shoes today.
Once the music industry stopped fighting the internet and actually embraced it, things started to turn around -- especially in Australia. Looking around the world, Australia is one of the few countries where digital music sales have managed to offset the drop in CD sales. In fact last year Australia experienced its first growth in overall music sales for three years -- a 4% increase on 2011 thanks to the digital music boom. We bought almost twice as many online tracks, while streaming music services more than doubled their figures.
Globally, music sales increased by 0.3% last year. It doesn't sound like much, but it's the first time sales figures have increased since 1999 -- the year Napster was born. A decade of war on its customers got the music industry nowhere. While piracy has taken its toll, the internet is finally helping the music industry fight back.
The latest sales figures look promising, but imagine how healthy the music industry might look today if all the money wasted on lawyers, DRM and other bastardry had been put towards cultivating legitimate online music services from day one.
As the National Broadband Network rolls out across the country, it's going to make music and video downloads more accessible to all Australians. It's time for the music industry to learn the lessons of the past decade and seize the initiative. But it seems you can't teach old gucci-clad dogs new tricks.
"If more action isn't taken by the government and ISPs to curb piracy levels the NBN could have disastrous results for the local industry," according to a major report from the International Federation of the Phonographic Industry. "All Australian content industries" will suffer if pirates are allowed to run rampant on the NBN, added Dan Rosen -- CEO of Australian Recording Industry Association.
It seems the internet is finally helping the music industry win back customers from piracy, yet when the industry looks at the NBN it still sees a threat rather than an opportunity. Expect the stubborn music industry to stick with its same old dirty tricks over the next few years, fighting against the internet with overpaid lawyers and shady backroom government deals.
Ramping up the war on its customers won't see people start buying more music. It's a war the music industry can't win, but it seems determined to die trying.