Tag: print industry goes online

Ralf HallerRalf Haller October 10, 2009

Online shift: print industry to face same fate as music industry?

Recently I have been hearing in various places that print news were recovering, triggering comments of relief (from the newspapers) that predictions that everything was heading online were obviously not correct. I had a smile on my face when I read that, and it reminded me of a short-term assignment I had more than ten years ago with Bertelsmannn BMG in Hong Kong, where I had to plan for a data center for their AsiaPac countries. BMG was already thinking then about distributing music over the Internet and for that purpose went into the Internet access business. They formed a joint venture with – at that time market leader – AOL and even built their own country-wide access networks in Germany, as well as buying providers in other countries. Of course they did not realize that the Internet is a shared medium and it therefore did not make too much sense to buy it like a print or CD manufacturing plant.  Back to Hong Kong: as the data center did not seem to make economic sense at the time I suggested to them that I help with setting up an online music sales operation testing the waters in the AsiaPac region first (at that time dial-up was still to be found everywhere). Despite their investment into the AOL joint venture and into whole country IP networks (in Hong Kong we had the option to buy Hong Kong SuperNet, the city’s first and largest ISP) they looked quite puzzled about my offering and had one question only: how do we protect ourselves from illegal pirate downloads and distributions? My response was that there are technical methods even if not all can be protected, but most importantly we cannot sit and wait until it happens anyway. So still they turned the idea down and I moved on as well…

By now we all know what happened: a fruit company from Cupertino sells more than 50% of all music online and is taking the profits. Not only Bertelsmann BMG but all the other music labels lost the race to a company that had no idea about the music label business and its distribution at all.

So while the music industry shift online is done and one company dominates it, I am convinced we will see the same in the print media. And it looks like it might be the same fruit company eying for it. Read I. Cringley’s latest article on this, providing more background info. Interesting to read that he had the exact same experience in the print publication industry (in 1994 already) that I had in the music industry. History repeats itself, it seems, telling us that if you wait too long someone else will come and take that opportunity.