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January 05, 2008

Umair Nails Root Causes of Music Industry's Problems

[Written from my mobile so no fancy formatting]

Umair at Bubble Generation always analyzes the web and business world in quite insightful ways and today lays out his/Bubble Generation's startegy for the upcoming year. No predictions but he warns massive changes to one of business' most basic building blocks, the corporation, are coming because of moral hazards/ corruption (sounds similar Lessig's new thesis).

And here he makes the point by dissecting one of the fundamental, Economics 101 reasons for the music indutry's bleak future-- I've heard no one make this point Kyet alone explain it so succinctly and clearly) even though its simple (but not necesairy easy to see) and that why you, anyone interested in the intersecton of the web and the business world should be reading Umair:

"But, partly because of massive buyer power (the influence the biggest retailers exert over the record labels), prices in the music business have long since failed to carry any pertinent information. Prices have become, if not fixed, as many suspect, certainly standardized. And this robs consumers of a vital means to gauge how much future value they derive and risk they take when purchasing different music goods. It also robs labels of the ability to really understand consumer preferences."

While this one one paragraph is poignant, read the rest here,

This post should be at the top of TechMeme, Digg, Reddit, you name it; the blogosphere and tech world needs to read and understand this (it will make the discussion on Twitter's business model seem trite).

Let's push Umair's post out there and get the conversation started.


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