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ADAPT OR DIE

March 5, 2013

It’s only human nature to try to protect what you have. But if your market is fundamentally changing you can’t circle the wagons. You have to adapt or die. This marketing principle can best be seen in the music industry. Since its 1999 peak, the global music industry’s revenues are down 40%. Now revenue is finally going up, not by much, just 0.3%. But for an industry that has been in turmoil since online file swapping started, they are finally accepting a new marketing model.

The music industry’s first reaction in 2000 to file sharing was to go to war with a barrage of lawsuits and lobbying. But once young people discovered a way to enjoy free music, the war was really over. By the time the industry decided to make legal music available via iTunes and others online sources, the industry was toast.

The physical music market (vinyl records to DVDs) continues to decline and 32 percent of internet users are still downloading pirated music according to industry reports. But the industry has finally placed its bets on downloads, streaming and subscription services. These services now account for most of the music sold in the United States, although physical music still accounts for the majority of industry revenue worldwide.

So, you think this couldn’t happen to you? Think again… banks, retirement communities, big box retailers, video stores, office supply stores, colleges and universities, and nonprofits are all on my list of industries that are facing fundamental changes, and this list could be much longer. What are you doing this week to change?

 

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