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  • Brendan Shaw

My failure as a Rockstar: lessons from technological change in the music industry

In 2001, a little-known rock band started and ended its career in Melbourne, Australia.

The band, Boxer, a folk-rock/pop band with a mixture of intelligent and edgy political lyrics, did the usual things start-up bands did up until 2001: worked hard, recorded an ‘EP’ compact disc (CD), played smoke-filled pubs and live music venues in Melbourne (mostly when they were empty) and spent a year marketing itself by sending CDs in the mail to record companies, live venues, music producers and radio stations.

It failed.

We went nowhere.

As well as being my first start-up business, Boxer tried to use traditional 20th century platforms to promote itself just as all those traditional business strategies and marketing models were collapsing around us.

The digital disruption and transformation of the music industry over the last 40 years has been astonishing, as eloquently demonstrated again by the Visual Capitalist website.

Source: Slightly adapted from Visual Capitalist, “Visualizing 40 Years of Music Industry Sales”, Nick Routley, 6 Oct 2018,, accessed 19/10/2018.

US music industry sales revenue peaked in 1999 at US$ 21.5 billion when compact discs (CDs) had completed their market takeover by consigning cassettes and vinyl records to museums and cardboard boxes in the garage. By and large, these trends happened worldwide, including in Australia.

But from this peak in 1999, revenues then collapsed to US$ 6.9 billion in 2015 – barely one-third of the revenues earned only 16 years earlier.

So, what happened to cause this revolution in the music industry?

Digital technology. First in the form of piracy via Napster, before evolving into paid premium music streaming services such as Spotify and Pandora, following earlier platforms such as Apple iTunes.

Technological change initially allowed piracy to run amok and challenge the viability of the entire music industry.

While Napster was killed off, it spurred new technological developments in music downloads and services.

Today, after years of decline, music industry revenues in the US have started growing again for the first time since the beginning of the 21st century. Sales revenue has grown for two consecutive years, and likely to grow this year, largely on the back of the growth of digital platform.

The music industry is growing again.

It’s a fundamentally different industry from the life sciences industry, but there are some similarities between the two:

  • The importance of innovation and creative talent in developing new product

  • Historically, small developers and start-ups would compete for attention and investment funds from larger, established producers

  • Intellectual property plays an important role in driving revenue and innovation, while consumers would sometimes prefer not to have to pay for using that intellectual property.

The disruption in the US music industry triggered by changing technology and consumer wants was different from the changes experienced in the life sciences industry.

However, the music industry serves as a lesson of what can happen to an industry when technological change and changing customer expectations undermine traditional business models.

Few except for a handful of hardcore friends and supporters ever heard of Boxer or its wonderfully insightful reflections on the human condition.

Unless they happened to accidentally walk into a Melbourne pub in 2001, no one in the world's population had a chance of ever hearing us.

Today, of course, the world is different.

Up-and-coming musicians are often bypassing record companies altogether and publishing their own music online on YouTube channels, Instagram and the like, such as Dodie Clark or Orla Gartland.

They’re making a business out of writing songs, doing their own publishing online and marketing through social media direct to their millions of followers.

Today people anywhere in the world can hear these emerging musicians by logging on, listening to and buying their music from wherever they are, often on a smartphone.

And according to Hans Rosling, there has been an exponential explosion in new music recordings being released each year since 2000, now up to 6.2 million recordings per year.

All this is a world away from the days of begging for airtime on radio or hoping some big-name music producer would walk into the very pub at the very time you happened to be playing that very evening.

The question for the life sciences industry, of course, is what are likely to be the challenges it needs to face similar to the music industry’s digital disruption or Napster moment?

And what could companies do to anticipate and be ready for both the challenges and opportunities?

Some of the issues facing the life sciences industry right now, including questions about its very business model or raison d’etre, are not so far from some of the questioning that emerged in the music industry at the turn of the century as digital technologies and piracy took off.

What are the changes coming to life sciences from things like digital health, personalised medicine, biologics and biosimilars, universal health coverage, payer-influenced prescribing, outcomes-based pricing models, business alliances and partnerships with non-traditional partners, non-traditional competitors entering the market, the growth of ‘emerging’ markets, internet-empowered savvy patients, new diagnostics, big data and artificial intelligence?

The sorts of things incumbents in a market can do to adapt to cycles of disruptive innovation include

  • avoid relying on mainstream customers for evaluation of new opportunities

  • think about the benefits that consumers will get from new technologies

  • adopt an open approach to absorbing outside ideas and technology

  • exploit internal capabilities by building new teams

  • exploit managerial commitment to evaluate potential disruptions

  • create separate organisations or taking over small companies

  • build ambidextrous companies, and

  • allocate financial resources to emerging markets.

Over time, established companies in the music industry, facing waves of disruption, embraced many of these strategies.

It’s fair to say that Boxer didn’t, although we did get played on radio.


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