Look What's Happening Out In The Streets, Got A Revolution

The French Revolution unsettled many, not the least of whom was King Louis XVI who literally lost his head to the guillotine. But the effect of revolution was not confined to France. All European monarchies watched with fear, concerned that they too would be next if the new order-fever driving change in France were to take hold in their countries.

Revolutions are funny things. Once started, their ends are hard to predict. And you know what? We're living through one now.

BusinessWeek recently ran a story about the current state of the recording industry, entitled "The Big Record Labels' Not-So-Big Future." Among the many points supporting this dire conclusion were the following:

• Artists are rebelling against their record labels and are looking for direct connections with their fans.
• Those same record companies have for years antagonized the very consumers who were expected to buy the music.

The result: Sales of music CDs are down significantly (off 30 percent since the high-water mark of 2002, according to the recording industry's own data.)

Consumers smell blood. They've seen the genie come out of the bottle and are not willing to listen to those who want to put him back in. (And they're certainly not willing to pay $18 for a CD ever again.) They've heard the tired arguments regarding digital rights management, and while they're willing to pay what they consider to be a fair price for music and movies, they've had enough of what they also consider to be price gouging. Mad? I'd say so. Just check out www.boycott-riaa.com!

If you're reading this, most likely you are in the CE industry and are involved in some way with the sale of hardware rather than music software. But trust me, you are like the monarchy in England or Sweden during the French Revolution. You should be looking at your cohorts in France, i.e. recording industry executives, who are now under siege.

When all is said and done, little if any of the old "order" as we know it will remain. Revolutionary change is happening and not simply in the music business. While it seems that each day brings a new music distribution model, so too will we see many new hardware business models. Who says we need receivers to listen to music, or that they will function as they do today? Why not a "receiver" that comes pre-loaded with a terabyte of music and video, ours to do with as we please. Internet-connected, we can add and delete music and video to our hearts' content, never once thinking about buying a new CD or DVD, or for that matter a new iPod (presuming we opted for the model with the detachable 150GB flash-memory portable unit). All for a reasonable monthly rental charge, or for free if we agree to also get our TV and phone service from the same company, or purchased outright.

Who would make such a product? Let your imagination run wild. As Nine Inch Nails front man Trent Reznor said in the previously mentioned BusinessWeek article, "Exciting times, indeed."

I don't know how much of this will happen nor when, but I am absolutely certain that revolutionary change is upon us and that like Louis the XVI, many who do not expect the inevitable will be changing to a much smaller hat size.