Technology & Entertainment: The Evolution of Audio in the 21st C
A Case Study for every entertainment industry
(Author’s note: I spent considerable time in the so-called corporate world as a technology analyst; I was able to watch—and comment on—some huge changes, as they happened. As a reminder for those too young (or too old) to easily recall: TVs used to be heavy and small, car audio was awful, and expensive, headphones were disposable, GPS was revolutionary for a few years (as was social media), cameras (analog before being briefly supplanted by digital) required film that cost time and money to develop (and it was still considered near miraculous), and audio went, for a while, from the most important thing (think ‘70s and ‘80s) to an afterthought—and we’ve still not caught up to the good old days. The point being: even in the last couple decades, so much about the technology sector (think: the things we used to purchase at Best Buy when we used to do such things) changed and was remade.
Literary publishing, on the other hand, has been remarkably consistent and predictable for centuries. The model for how people creating books got paid has had ups, downs, and everything in between but, as I’ll explore in subsequent posts, the model we knew since more or less forever, has changed and is never coming back. We can—and should—learn and predict a great deal about the literary publishing industry by considering how the audio sector mutated, became unrecognizable, and, in some ways, has actually improved.
This piece was written more than 15 years ago (!!), and while it’s outdated and often amusing, there are lessons and trends worth noting.)
End of an Era
Anyone not remember the iconic image above?
The famous Maxell ad, now more than twenty-five years old, is not merely—and obviously—from another century, it’s a remnant of a world where analog ruled, and audio was king. A world that was ostensibly less complicated, when we used to watch movies in theaters, or courtesy of paid channels on tiny CRT screens.
Flash forward two decades and the combination of digital content, including downloads and portable devices along with the ascendency of all-things video, made audio more of an afterthought. To put it mildly, this notion would have been inconceivable during the 1980’s.
Less than ten years into our new millennium the prospects for the audio category seemed dire. Even a significant economic recession failed to halt the proliferation of flat panel displays. Suddenly, it seemed, no screen size was too big and, conversely, no audio component could be small enough. Practically overnight, any consumer could conceivably store their entire sonic library into a device they carried in their front pocket. It was revolutionary in every way, but these advancements often came at the expense of a previously impregnable home audio sector.
The question, however rhetorical, was whether MP3 players and earbuds comprised a whole new standard in how we listened to music. The narrative was apparent in the numbers: CD sales were down, and component sales also suffered. Content was ubiquitous but (increasingly) free, and sound quality, often spotty at best, seemed a peripheral concern. The notion of whether the audiophile—the guy from the Maxell ad—was a relic from the past seemed settled: that dude was a dinosaur, a symbol of the bad old days a new generation would never feel especially nostalgic about.
Requiem for the Audiophile
If you are a certain age, you can easily envision the person. Perhaps you were that person: the one who not only had to own the latest and most advanced high-end equipment, but also proselytized about the components, compelled to convert friends and acquaintances. Perfection carried a price tag; the naysayers might be able to listen to the sounds, but they weren’t really hearing them, etc.
As difficult as it likely is for younger consumers to appreciate or even conceive, the playing field for home audio remained relatively uncomplicated for the better part of a century. After record players were challenged by cassette decks (the less said about 8-Tracks the better) which in turn were supplanted by CD players, it remained a two-channel environment, all powered by a receiver and a set of speakers.
This landscape changed gradually but the eventual paradigm shift—made inevitable by the Internet—was radical and, today, seems permanent. The electrical storm of digital files and the advent of MP3 players made the consumption of audio content not unlike personal computing: a 24/7, multi-location proposition. People were able to take their music with them wherever they roamed; gradually a concept that seemed exceptional became compulsory.
The Day the Music Died
Back in 2011 Jon Bon Jovi accused Steve Jobs (in Britain’s Sunday Times) of being “personally responsible for killing the music business.”
Unlike his rock and roll compatriots from Metallica, who infamously went on an anti-Napster crusade in 2000, or underground prog-rock avatar Steven Wilson, who loathes digital files on purely aesthetic principles, Bon Jovi was lamenting the halcyon days of vinyl. (He may not have been aware that LP and turntable sales had experienced a resurgence in recent years.) This notion—that the digitization of music has indelibly impacted the medium for the worse—is neither a new nor particularly original proposition. In successive decades it was initially cassettes, then compact discs that, according to self-appointed experts, were certain to devastate the integrity of organic sounds. Peripherally, industry honchos fretted that the ability to record (and later, burn) content would have a deleterious impact on sales. These concerns proved unfounded, to put it mildly.
“Independent of overall industry sales—of which you could point to the disaggregation of the album into individually available songs as having a bigger direct impact than being digital—more music is consumed today than ever before,” according to Jason Herskowitz, co-founder at Tomahawk. “We’ve now moved into an era of the disaggregation of streams, where artists offer different content across promotional platforms like Official.fm and SoundCloud, video platforms like YouTube, and subscription services like Spotify and Deezer. Tomahawk provides fans a single interface into all of their own unique available music sources—along with programming, curation and translation layers across the top of them all.”
Take My Content, Please!
In reality few did, or should have, shed tears for the ways digital files altered the music scene. In fact, downloadable content liberated artists and helped audiences procure more content for less money. This brave new model defied initial fears and expectations and enabled savvy artists to accrue potentially greater profits. Online exposure benefits artists, and if this concept was once controversial, it is now conclusive. True, the mechanisms for “stealing” music remain rampant. On the other hand, artists receive invaluable—and heretofore inconceivable—exposure by presenting samples of their work online or at social networking sites. For every pirated album, there are dozens (or thousands, and possibly millions) of eyes and ears that might stumble upon a band’s work on YouTube or Rhapsody.
“Technology has drastically altered the landscape for musicians in the production and distribution of their music. In the past it required hundreds of thousands of dollars of investment in studio time and the shipping and stocking of plastic discs all around the world,” Herskowitz says. “Now it only requires a computer, an Internet connection and some spare time.”
Technology and innovation have undoubtedly bestowed unique blessings on musicians. Without the marketing incentives inherent in digital content musicians could not create, distribute and control their intellectual property. (This process used to entail considerable investment and kept bands beholden to record labels that did not always have their best interests in mind.)
In sum, we have heard—and likely always will hear—alarmist rhetoric about how some new development signals the death knell for so-called business as usual. Follow the money: anytime new solutions threaten to change the world as we know it, this is invariably a positive development for consumers.
The Democratization of Content
It is not necessary, in the final analysis, to debate whether Steve Jobs killed or saved music. The inescapable fact is that he did as much as any single entity to change how we listen to music. The pay-as-you-go model of iTunes did more to empower—and enrich—musicians as anything the most well-meaning purists could have managed or imagined. The trajectory from the Wild West chaos of Napster to the more structured system of iTunes took a while to sort itself out, but finally certain mechanisms were set in place. The subsequent popularity of streaming services, like Rhapsody and Pandora, represent another positive advance for consumer, artist and industry. 2012 signals the first year that consumers will spend more money on digital music than CDs and other physical formats (source: Strategy Analytics). The appeal of subscription-based services delivers a diverse quantity of music in an organized and regulated format.
From Napster to MySpace, everything about music – from creation to marketing to distribution – has come almost full circle, albeit in a way that fully embraces the technological advances digitized content enabled. Perhaps the most vivid way to comprehend what is happening in the music space is to consider what has already happened in the print sector.
Not all that long ago blogs were dismissed (often by the very folks now finding themselves caught up in cutbacks at shrinking newspapers) but have developed into a viable – and profitable– alternative to traditional media. The same principle applies to readers of newspapers and magazines: if content can be found online for free, who is going to pay for it? (The reason this content is even available online is because once the balance of power in terms of readership transferred, the mainstream outlets followed the advertising dollars.) Today, writers with popular blogs are making the type of money from advertisers that newspapers and magazines once took for granted. E-readers (and tablets), obviously, represent an entirely new frontier in terms of how we engage with “old school” media. Claiming any one individual is responsible for destroying, or salvaging, the music industry is not unlike suggesting the Internet devastated printed publishing. Certainly, a narrow and short-sighted case could be made, but the reality is that the Internet and all manner of digital content has vastly expanded the options and possibilities.
(Re)Defining the High-End Audio Experience
For practical purposes, the authentic high-end audio tag applied to products that sold for thousands, not hundreds of dollars. As such, it seems safe to suggest that the market for this obsession has typically catered to a wealthier, if passionate minority. The good news is, as we observe time and again, ceaseless innovations in CE result in optimal quality at lower prices.
In a roundabout way, the same device that initially stole audio’s thunder may become a vital battleground for future sales. Even as digital displays get bigger and better (with price points dropping correspondingly) and we eagerly anticipate the advances 4K should deliver, at a certain point sound quality will once again become a coveted feature of the “full” home experience.
“Now is the time for CE manufacturers to make great audio the selling point,” opines Paul Geller, SVP at Grooveshark. “I wish my wonderful new display with a 60Hz refresh rate had better speakers. I like 60Hz, but I needed to get a soundbar!”
Soundbars, initially embraced as a cost-efficient alternative to more expensive, and bulky, surround-sound systems, are now genuine solutions in themselves. Still affordable, there are also a variety of more robust models with higher price points and improved performance. Soundbars offer a less complicated, virtually wireless solution and CEA expects sales to increase year-over-year through 2016.
Another excellent example of technology meeting (or creating) consumer demand is the advent of high-performance receivers that integrate connectivity. We may not be able to wrest the MP3 player or smartphone from a would-be-customer’s hand, but there is now a best-of-both-worlds scenario: a receiver that allows us to “plug and play” at home. Certainly, the image of anyone listening to digital files through home speakers is anathema to the old-school audiophile, but those consumers were never part of the equation in the first place. These home audio products specialize in being multi-functional, and the implementation of MP3 capability, along with Ethernet and HDMI integration enables a greatly enhanced in-home listening experience. Between improved amplifiers, soundbars and these more robust receiver capabilities, the previously dubious proposition of better audio in the home is now not only feasible, but affordable.
A Case Study: Headphones
If we do not already do so, we will someday regard premium headphones as the category that provided a gateway to higher quality audio—and a salvation of sorts for the entire industry. Anyone who has been paying attention understands that headphones sales are not expected to slacken anytime soon. It is instructive to consider that ten or even five years ago the suggestion that headphones, much less designer headphones, could be profitable with price points in the hundreds of dollars would be dismissed as outlandish. And yet, at least in hindsight, it not only makes sense, it seems inexorable.
People have increasingly plugged into their devices during their commutes, in their cubicles, while they exercise or relax on the couch. There was, quite simply, a market demand for ways to bolster these experiences and headphones met—even exceeded—this desire. It remains remarkable (even if it now feels predictable) that devices being given away for free on airplanes could be transfigured into high(er) end audio solutions as well as fashion accessories.
In fact, the cultural cachet of premium headphones represents a marketing goldmine. It is, for example, all but impossible to see professional athletes entering a stadium without their ever-present headsets. The authoritative case study here, of course, involves the earth-shaking success of Andre “Dr. Dre” Young’s collaboration with Monster Cable. The brand Beats by Dr. Dre became arguably the most successful and high-profile celebrity-endorsed (and, in this case, created) product of the 21st Century.
If imitation is the sincerest form of flattery, Dr. Dre should be as flattered as he is wealthy: other headphone brands have hastily been formed, and existing manufacturers have sought luminaries to associate themselves with. Now we have Soul by Ludacris, The House of Marley and Lady Gaga, just to name three of the better-known entities competing for share in a seller’s market.
The phenomenal sales can certainly be attributed in part to a very American attraction to icon-driven product placement: seeing athletes and rock stars wearing (not to mention designing or endorsing) headphones anyone can purchase serves as an irresistible enticement. But aside from the social and cultural implications, these products have been advertised, ingeniously, as superior solutions. Not long ago, high-end headphones were catered to audiophiles or frequent travelers in search of the best noise-cancellation options. Dr. Dre’s promise to deliver the type of sound quality producers hear in the studio proved to be marketing catnip. The products were hip, but they also allegedly supplied the type of sound quality never attainable in the past. We now see manufacturers like Skullcandy forging a lifestyle connection catering to the skateboarding and sporting community, which is 180 degrees apart from the old Bose target audience.
Bonus content, with video.
In my capacity as an industry analyst at the Consumer Technology Association, I’ve followed the developments of this changing landscape –what I refer to as the democratization of content– with keen professional as well as personal interest.
As part of the podcast series The Intersection of Innovation & Culture, this conversation was entitled Streaming Services: Savior or Disruption?
I was joined by tech industry veteran Jason Herskowitz, and we talked about these trends, with a focus on streamed services and whether or not they are saviors or disruptors of the music industry (spoiler alert: it’s a bit of both, but mostly the former, according to us).
Some key takeaways include the one indisputable fact that streaming services and innovation have permanently changed the music industry. As such, we tried to provide some historical perspective in order to better understand the present –and suggest what the future may hold. Some other takeaways include:
Recording and selling music doesn’t require studio time and a fleet of trucks and trains anymore. A laptop and Internet connection does the job much cheaper and easier.
What has happened to the music industry is similar to the innovations we have seen in traditional news and publishing. Bloggers and independent authors can find audiences and compete with big established players.
Social media makes everyone a Program Director.