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Many people still debate the future of television, but for the record business, the verdict is mostly in. and it is guilty, guilty, guilty! The record business as we once knew it is gone… the distribution, promotion and packaging that supported it is gone. Adam Curry and I had the unique privilege of telling this to the business starting with our internet broadcast of the Grammy Awards in 1995. Of course the industry had the unique privilege of dismissing us outright. Since that time, we have witnessed:

Other uses for the album?

1. The demise of DRM as we know it. Wrong fight at the wrong time. While the industry was on the sideline watching the disappearance of its traditional promotion and distribution networks (radio and record stores), they refused to empower an entire universe of micro distributors online who could have completely and profitably redefined the model… instead pricing or litigating them out of business… The industry shot themselves in the ass.
2. The demise of the Album Package (thanks to industry and iTunes, the album as a package is dead. Focusing increasingly on individual tunes and not acting quickly enough to create a new rationale for the package of songs… The industry shot themselves in the gut.
3. The demise of FM radio. Allowing the reality-driven, localized, free-exchange culture of FM radio to commoditized and homogenized destroyed the only real example of push marketing in media… The industry shot itself in the heart.

If I only had a heart! Well, in the mid 1960’s, entertainment found a heart, in the form of FM radio. Prior to that time, broadcast TV was well on the way to becoming the behemoth that it is today, controlling the airwaves with 3 channels whose programming was becoming increasingly packaged and similar (see the rise of Ted Turner). AM radio had already begun to give way to “programming from above” and restrictive formats. FM radio arose out of the dramatic change that occurred in music itself, in the process creating a multi-billion dollar industry far beyond the original intent of the manufacturers who had created the 45 as a jukebox novelty.

The arrival of the British Invasion changed the face of the record business. Artists were no longer solely the “creation” of songwriters and labels… They were bands… small groups of talented individuals who came together for a purpose… to create great music and share their passion with their audience. Lyrics became more personal, point of view was important, musicianship became valued, and the identity of the group became as important as the music itself. Fueled by a robust SOCIAL NETWORK of clubs and venues, given relevance by the VIRTUAL RECOMMENDATION ENGINE of FM radio, music became the most culturally relevant global force of the 60’s, and found itself at the epicenter of a cultural revolution that is still felt today. So. what happened?

The recording artists of the 60’s were self-contained media properties, utilizing the distribution and promotion engines of the recording industry, but extending their impact beyond the stage into the cultural fiber of society. Lyrics became more personal, song formats changed, rules were broken and broken again.

As the artists changed, the audience changed. They became more involved in the ideas and thoughts behind the band. They wanted to connect not just with the song but with the artist behind them. FM radio provided that connection. Then came the internet. Adam and I actually sat in meetings where record executives of major labels spoke of the net as “going the way of CB radio” and said things like “our music will never be on the internet”. Breaker, breaker, good buddy… you’re screwed!

While the labels ignored the shifting sands, the artists didn’t. The internet exploded and became the new social ecosystem of entertainment. Artists began to re-package themselves to reach their audiences directly, led by an amazingly talented genre and creative force, hip-hop. Hip Hop artists proved that labels were obsolete as artist breaking machines and went on to completely redefine artists as media franchises, launching tours, ringtones, clothing, television and movie productions and other innovative areas of revenue generation. The hit song went from the apex of an artist’s career to a value-add. Artists 1, labels 0.

Network Exec's Head Explodes

What can the tv business learn from this death spiral? Here it is: New media is not re-purposed old media. Just as the CD created a momentary spike in revenue as fans restocked their album collections from albums… Hulu and their ilk are just TV on your PC. More dilutive than accretive, having the same collective effect of iTunes on the recording industry… the de-bundling of programming.

While Television is fighting the 500 channel fight, an entirely new generation of producers are taking media to a different level, not necessarily better or worse.. d i f f e r e n t. New media producers use the tools and social constructs they were raised with… YouTube is a video repository, not an entertainment network. The new entertainment network brings together, video, audio, gaming, blogging, twitting, socializing into an extended entertainment format that is at the same time disturbing to old-school Television producers and absolutely refreshing and engaging to the audience. New media producers are busily re-defining the concept of the entertainment format and new networks will help them build their independent value franchises. On our network as well as others, audiences are growing to compete with the GRP of top traditional shows but with a far greater opportunity to generate value.

And what about TV’s sugar daddy, brand advertising? The perfect union is now turning into the perfect storm as Agencies implode trying to defend their business model to brands who just aren’t that ignorant. Brands understand audience. Brands know that connection means survival. The connection is occurring as what was once on brand one voice, becomes one brand, one thousand voices. How will brands connect in the near future? What can TV do? The building blocks for creating a true new media business are right here on the net. The model is very different and the potential to create sustainable revenue and value eclipses that of current media companies.

Stay tuned as we discuss what Old Media Companies can do to get on the train and not in front of it.