The music industry’s disastrous response to Napster is common knowledge and a cliche when talking about ‘disruption’ from new technologies, but it is worth revisiting when some other kind of media is forced to respond to similar threats to the existing order. The music industry wrongly assumed Napster’s popularity was based on people wanting free music. Free music was incidental to what made Napster so revolutionary: the unlocking of music from a physical platform. People don’t want to buy CD’s, they want to get, store and share songs digitally. The music industry misdiagnosed the problem and paid the price handsomely.
Legacy print media have, of course, been facing a similar situation with the web making their business models obsolete. They have assessed the situation with a little more savvy than record companies did, but still, the attention paid to ‘paywalls’ and free content cannibalizing their printed product seems to miss the larger point. iTunes proved that people will pay a reasonable amount for something that allows them to easily, straightforwardly get the content they want. The Economist has a good writeup about 2010 being the ‘Year of the Paywall,’ and we couldn’t agree more with its conclusion: “One considerable advantage to building a paywall is that it forces newspapers to think hard about what their customers (as opposed to their advertisers) might really want.” We also think this whole episode speaks volumes about the relevance and efficacy of large organizations in the digital age. If you have to respond quickly and effectively to change, getting the headline right is just the first step.