Napster is to blame!

Cleaning up together with your 9 and 7 years old kids comes with a Price…

As many, we are using the free time given by the global pandemic to take care of things that we had avoided for a long time, like deep cleaning and giving / throwing away stuff stored for years and years.

I asked my girls to help me out by placing my CD collection on a separate box for donation, after a few minutes came the questioning… Dad why do you have so many? Where did you buy these? Why don’t we visit music stores anymore? Where they so expensive? Where did you kept them? Only 12 songs?... and so and so till I realized how old I got but it also brought the question to my mind, how did it all changed so fast?

Napster it to blame!

Have you ever heard of the “weak signal” concept? It was created in 1975 by Igor Ansoff it basically aimed to create a system / process that could help organizations spot events that could potentially jeopardize the business or market in which they operate, a core concept for strategic management and furthermore engraved at the core of continuous improvement and the better of design thinking.

History has proven that lack of attention to “weak signals” quite often brings extinction. Disruption creates massive ripples and as a tsunami can change industries even if it happens on non-competing far away categories.

P2P was already a reality back then, but to imagine a world where people would open their hard drives to share files seemed impossible until Napster came and proved us wrong.

It was 1999 when all the mess started and ever since it has been awesome!!! Users immediately understood the opportunity: It was free music (which wasn’t quite fair nor legal), they could actually choose the songs they liked and they could get it all from the comfort of their homes.

The problem was the lack of understanding of the event and the great potential it presented.

The music industry decided to fight the “movement” by using the intellectual property laws -it was their right!- Not paying artists for their work is totally wrong, however if they had understood the signal right and saw it as a way to bring the “product” directly to the consumer, if only there could had reached an alternate solution an early settlement for payment (as done now), this would had given them more ground for control and a better view of the huge change that was to disrupt not only their music industry but many other aspects of how they did businesses... if only...

In July 2001 Napster was legally closed…but it was too late, the world had found a better way, and was not going back to “NORMAL” (sounds familiar???) so while the Music labels where fighting Napster with all their guns and eyes focused on court rooms many many other P2P players were created, very promptly legal actions were taken against service providers and sadly against users too…

But as said it was too late, a big player had already prepared the new wave, January 2001 (early on the battle against Napster) Apple had officially launched itunes, Apple took the learnings from the legal battles and created a beautiful on demand business to satisfy the requirements the consumers really wished for; At the end the Music labels had no other option but to play along.

Napster′s disruption ripple continued; as a player form a parallel industry was watching.

Netflix launched in 1997 with an idea to rent DVD′s and charge no fees for late returns; between 1998 and 1999 they had launched a web site to rent movies which would then be delivered at your home and a membership deal that would allow customers to rent any amount of dvd′s with a single fee; it was a great success.

In 2000 Netflix decided to pitch the idea to the market leader…yeap… Blockbuster, whom of course rejected the idea, 7 years later Netflix launches streaming with an incredible on demand option, in 2010 Blockbuster disappears.

For Blockbuster the “weak signal” came directly knocking at their doors, they were too proud to listen to what consumers where choosing elsewhere, to understand how dangerous new players with better ideas are (even if they are smaller) and how disruption has a ripple effect that goes as a tsunami, after all we need to understand that they made a lot of money from late fees, taking that away was bad...if only they knew.

The Netflix effect now has changed it all again, turns out that the movie industry is now being deeply changed by the now giant!... B2C is crowned as the top alternative for entertainment and turns out the many of the Music labels that were affected by Napster are owners of the largest movie studios too and are now once again impacted!!!

They haven’t learned to read weak signals?... To play on what Simon Sinek defined as the Infinite game.

Big players like Amazon Prime, HBO (online) and Disney+ are now creating a content based battle, where the best content wins the viewers and brands and advertisers need to figure out how to navigate these contents, normal TV is not a big place anymore… competition rules!!!!

We could also invest time to mention how uber and other P2P & B2C models were inspired by these events. Think about this, as you read this paper, we are all confined to our houses because of a virus that forces us to social distancing, home office and home school are part of our new routines, B2C services globally rise replace former players, P2P giggers and so on are taking new importance…

Disruption comes in many forms, this time it came as a “black swan” and couldn’t be predicted, the ripple not only affects companies and markets but the people who create and work on them; Given the current changes I would encourage you not only to learn new skills during these crazy events but to target your actions with a huge sense of purpose, listen to the weak signals that might hit you and direct yourself to proactively be flexible, relentlessly focus on adding value giving worth.

At this point I′m happy all these services and products emerged, its making quarantine less hard.

Cheers

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