While watching Barack Obama talk about the US auto industry crisis on Meet The Press yesterday, it hit home once again that the recorded music industry led the way to the downward spiral and other businesses didn't pay attention and learn from them. About 10 years ago, the music business denied new technology instead of embracing it (Napster). The major label business was based on a model that was over 50 years old, yet no label overhauled the way they did business. The people at the top made a fortune, middle managers were eliminated, leaving highly paid executives and underpaid assistants to do the job. The record labels put out inferior product. They sold an album off one good song. Consumers had to buy the whole album in order to get the song. The song had nothing to do with the rest of the music on the album. Consumers fought back and decided they didn't need the album anymore, they'll just download the song for free.
The US auto industry seems to have done the same things. They continued making cars bigger instead of environmentally efficient. Foreign cars were proving more reliable than domestic. The auto industry is also based on an antiquated model and their CEOs are over compensated whether the company is turning a profit or not.
The sad thing about all of this is the people who are most effected by these downturns:
The songwriter is the one losing out on royalties from free downloads.
The people who supply parts to the car companies will no longer have a business.
Those on the peripheral who depend on these businesses such as writers, restaurants, freelance tech support, video directors and production companies, recording studios, messengers, cleaning services, copier salespeople, the list goes on. It's not just about those CEOs testifying in Washington last week.
The bottom line: give the consumer good quality products, listen to the consumer, make sure you're up on the latest technology and you'll be productive.
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