Music is more than entertainment. It's more than lip syncing your way to the office, or making your air guitar gently weep while listening to Linkin Park. Music is business--and an extremely provocative business at that. Billions and billions of dollars are pumped into the industry every year by enthusiastic, passionate fans. Whether it's streaming through iTunes, Pandora or Rdio or spinning on old-school vinyl, music means money.
Music provides the background for everything we experience. It surrounds us as we drive, entertains us when we run, streams to our computers as we rock a spreadsheet and motivates us to make a purchase. It's a powerful force and an exceptionally unique category of content.
But hang on--that thumping and thudding you're hearing isn't Eminem's latest cut. It's the sound of the music industry's traditional business model collapsing. Last year, the overall music market dropped by 9 percent, and the industry's increasingly outdated distribution channels experienced a complete free fall. Analysts predict that by 2012, digital music downloads will outsell CDs for the first time. Combine digital distribution with social media's impact on music, and you have an entirely new industry that looks nothing like it used to.
Like so many other sectors, the music industry is in the midst of a shift from old school to new school--a transition to new platforms and entirely new ways of thinking about and conducting business. But even that isn't enough. To keep winning requires constant innovation. Enter a new entrepreneurial set--one hell-bent on changing the way music is created, discovered, delivered and experienced. And that's what we cover in this, our first-ever music issue: the complete overhaul of the traditional music business.
Properly showcasing the music industry's shedding of its stale, monolithic ways required an unusual angle and unique examples. So the frontman for our special report is Wayne Coyne, the maestro of the absurd and the master of music industry innovation. Coyne leads the Flaming Lips, a venerable band that is constantly experimenting with new ways of creating and delivering music. Jason Ankeny takes an in-depth look at the Flaming Lips' always-explosive efforts to reinvent, and the lessons all businesses can learn from the band's unceasing originality. Alongside that story are many other profiles of music business innovation, from how songs are recorded to how records are labeled to how music is sold and consumed.
As platforms change, business models shift and industries transform, new opportunities emerge. The ultimate winners, in any business sector, will be the ones who always think two or three steps ahead--the ones who never stop surprising their audiences.
On that note, I'm hopeful that Entrepreneur: The Rock Opera will soon make its debut--most likely as a mobile app. Watch for it.
Amy C. Cosper,
Editor in chief
Follow me on Twitter, @EntMagazineAmy
This story appears in the May 2011 issue of Entrepreneur. Subscribe »
