Dec 08
14
P2P And Asymmetric Markets
Over the last few weeks I have been having some meetings with people from the music business.
And believe it or not, there are still some very intelligent and hard working people in the biz!
One of the meetings was at The Music Network which is run by Keith Welsh. We were talking about a variety of things, but mainly the impact of P2P file sharing on the industry.
Keith was telling me about how the industry now is totally focused on trend spotting. Everyone wants to know what is going to happen next….
It strikes me that this state of mind is not isolated to the music biz. Everyone, everywhere in business is focused on the “next”. What is the next big trend in stocks, in technology, in real estate, in government etc… ? Who has the answers and what are they?
And yet, when you tell people the answers that they don't want to hear, their eyes glaze over…
The big issue of course for the music industry is that they continue to want to centrally plan their business. They have good reason to do so – they need to schedule marketing budgets, video production, publicity etc.
Meanwhile the consumer marketplace has become virtually totally decentralized. Because of the Internet, YouTube and P2P, the marketplace has become asymmetric. Asymmetry is akin to total deregulation and the music business is the canary in the coal mine of business disruption by digital technologies.
Of course the TV and Movie industries have been disrupted. Share trading started to be disrupted by online trading, but has yet to experience the impact of P2P. Pharmaceuticals will soon be hit by P2P as formulae for drug manufacture become more distributed and the tools for manufacturing become more available.
What happens in the banking industry when P2P makes itself felt?