Music industry

Predicting IoT’s Future from Music’s Past

The tech industry is facing challenges similar to what the music business encountered around the turn of the century.

Here is a secret: The Internet of Things has been building around you for decades. It has been quietly gaining steam since the first Bluetooth toothbrush appeared at the Consumer Electronics Show and the first car GPS became mainstream. If you pay attention, then there is little new under the sun. Take comfort that the challenges we face today as leaders in the IoT space can be better understood by looking at the past.

Tech is, ironically, going through its own disruption, and one of the best lessons can be learned from a previously destabilized industry: Music. We would be wise to take what we can from an industry that didn’t move as quickly as it should have. 

If you are on the fence about totally adopting to the IoT ecosystem, consider these three stages experienced by other disrupted industries.

1. Uncooperativeness Leads to Disruption

The music leaders saw digital coming. The corporate behemoth Sony practically invented the portable music industry with The Walkman. VHS creator Panasonic and other multimedia-forward tech companies were working on solutions. It would only be a matter of time before the (Sony-invented) CD would go the way of the dodo.

The problem? Each was working on its own solution – and wanted to own the proprietary work. None made much progress, and music labels were twice as cautious since they own the music and the player.

It gave an opportunity for a small disruptive software startup called Napster. The free filesharing platform launched in 1999 and, as a de facto music file sharing service, had up to 80 million users. The industry reacted the only way it knew how: Lawsuits.

2. Big Industries Play Catch-up

Napster ended up settling out of court, but not until the chaos got the attention of a not-so-small disruptor: Apple. We’d find out later that Steve Jobs began negotiating with the record labels shortly after the lawsuits, giving birth to the Apple Music Store in 2003. We’d also figure out that 2000 would be the peak of music industry sales: Revenues would drop off like a cliff and never quite recover.

Tech disrupting the music industry isn’t remarkable. What is amazing is that Sony and other major labels were working on their individual digital music solutions. They focused on proprietary knowledge rather than cooperating and creating a bigger proverbial pie. The stubbornness made it easy for a bootstrapped startup to make a chink in the armor and a well-oiled tech company to turn the entire industry upside down.

3. Industries Disrupt Themselves

It’s now a different conversation: Music industry battles with later innovations, like streaming services, are tame compared to the past. Apple is a step away from being its own music label. The tremendous power music labels held for a century has been eroded since the new millennium.

Labels are now fighting to capture some of its own disruption magic – albeit to disrupt themselves. In-house incubators, intrapreneurs and other corporate trends are an attempt to determine predict where music tech is going next. Perhaps now they realize the best way to do that is to make the future yourself.

What IoT Industries Can Learn 

Assume your financial engine will be drastically different by 2022, when the Internet of Things is expected to be an almost $15 trillion industry. Put yourself in the role of a scrappy startup: What weak spot of your company would you exploit simply because the business was too stagnate, stubborn or blind to adapt? Finally, remember the public will get what it wants, how it wants it, and if you don’t provide it, consumers will find an avenue to get it how they want it anyway. They always do.

Damon Brown advises budding entrepreneurs and startups. He is the author of the best-selling book series, The Bite-Sized Entrepreneur and a columnist for Inc.

 

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