BrainTrust Query: The Napster Moment
Through a special arrangement,
presented here for discussion is a summary of a current article from the Retail
Prophet Consulting blog.
In 1999, a teenager and a relatively simple piece of
technology rocked the music industry. The teen was Shawn Fanning, the technology
was P2P file sharing, the phenomenon was Napster and it changed the music industry
After two long years of court battles, Napster was eventually shut
down, but in the meantime other similar sites had sprung up. In 2003, Apple
quietly launched iTunes and 26 percent of all retail music sales were channeling
through it by 2009.
What Apple understood (and what the music industry failed
to see) was that file sharing itself wasn’t the problem. People had been
sharing files, including music, over the internet for years before Napster
came along. The problem was their product — specifically that music was
sold in albums of 10 or 12 songs when what consumers really wanted were the
best one or two tracks. It had nothing to do with Napster and everything to
do with the record industry’s
archaic, arrogant and broken product model. Had the industry only been honest
and open minded about it, they might have actually partnered with or acquired
Napster and harnessed the future themselves.
These "Napster moments" are
happening all around us and in a multitude of industries. Newspapers, publishers
and DVD rental chains, to name just a few, are being overwhelmed by changes
that many saw coming a long time ago — changes
that they could have been leading, rather than being annihilated by.
are particularly disastrous when companies or industries on the whole simply
refuse to acknowledge that their business model or core product must change.
For example, instead of embracing e-reader technology, the publishing industry
wasted precious time trying to convince us that nothing replaced the smell
and feel of a paper book! Really? Try convincing a five-year-old with an iPad
(which are now being sold at Toys "R" Us) in their hands
Likewise, Blockbuster wasted time haggling with consumers over
late fees while Netflix and others created the new distribution model right
under their nose.
Finally, a real life example of an industry I feel is due
for a Napster moment — the
architectural paint industry — an industry I actually spent some time
in as a marketer.
It’s my firm belief that the manufacture of paint (as
we now know it) for use by the average homeowner will be largely eradicated
within a couple of generations (maybe sooner) by thin-film digital technology.
As prices inevitably come down, thin screens will be wirelessly controllable
from any handheld or tablet in the space and will accommodate any one of thousands
of colors, designs and scenes. The décor can be changed any time with
touchscreen ease. No effort, no mess … no paint.
So the question for anyone
who makes his or her living from the manufacture, sale or application of paint
is "what then?" What will they sell?
How can a new and disruptive technology model work for them instead of against
Like the paint industry, the "Napster Moment" for many is
coming and my bet is, it’s coming sooner than they might suspect.
Discussion Questions: What can companies do to protect themselves against “Napster Moments” or waves of technological upheaval? Why are so many companies getting caught despite apparently obvious warning signs in hindsight?