[Manic Monday] The Importance of Symbiosis Between Content And Technology

The [recorded] music industry and other content industries are not industries with a definite science; especially when compared to other consumption-based industries, like fuel, FMCG and tobacco, which have more measurable sales potential based on consumer surveys, FGDs and trade offerings. Almost all the steps of consumer product development has shaped into a process and science, from research, product development, market testing to retail offering. Since the content industry that depends on a subjective purchase decision, something that has previously been accepted by the market may not always have the same reception in the future.

Acceptance of a content is wholly dependent on an emotional connection evoked by it. This emotional connection could be anything: an easy tune that makes people happy, brings up a memory, or 'only' as something to be accepted in a group. This process is naturally subjective, so the 'science' to obtain content with a large market potential is actually more of an art, rather than something based on consumer psychology and sales history.

It is this capability that usually becomes the basis of progress for various content industries like music labels, by choosing songs that have an interesting market potential (regardless of how big the market is). Still, even with the 'art', coupled with years of industry experience, will not always result in content that is fresh and interesting for consumers, this remains the core competency for these kinds of companies.

With the advancement of technology, the linear content consumption model shaped from producer, media to consumer began to deconstruct, so the variety of tastes and interests of content consumers has increased (or even, just became more visible because of the deconstruction of mainstream media). The potential of the content industry became much wider with new players coming in, selecting and producing a higher variety of content. So it is not strange to see that the independent content industries have grown for the past few years, with production tools become more easily available at a cheaper price. Still, the existing industry players depend on their core competencies.

It is interesting to see that even since the introduciton of CDs, a competency in technology was something that was rarely developed by the content industry. There is a story that when the people who developed the audio CD format went to a couple of recording industry executives, they initially rejected it, until it received support from musicians like Stevie Wonder who praised the audio quality.

One of the world's first online music stores, Soundbuzz, had difficulty persuading the recording companies to sell their songs on the service. And to this day, despite the variety of technologies that could be used for the content industry, technology remains not a part of their core competencies.

If we look at the past several years in Indonesia, various innovations of digital music services have always come from technology players. Content Providers with their premium SMS-based services, telecommunication companies with their VAS services (Value Added Services, including RBT) and now we have music services like Melon and iTunes.

These companies really do have technology as their core competency, and offer their technology as a platform for these content producing companies. Various business negotiations are done, and once an agreement is reached, content is offered on the service.

The circle shapes itself: the content industry is very dependent on the technology industry, and vice versa. Both are interconnected in a symbiosis, especially since the deconstruction of content distribution, which was one linear and now is almost out of control. Because the core competency of the content industry is to create content, competence in technology becomes number two, and dependence on technology partners become unavoidable. And of course, these technology companies need content to keep their services alive.

The funny thing is, both parties find it difficult to reach symbiosis, or even to communicate. Content companies like recording companies usually ask for a minimum guarantee payment to technology companies that develop music services, practically transferring the business risk of the label on to the technology company, and increasing the business risk for them. The technology companies can also 'hold hostage' the content companies to follow preferred business models, risking their chance to sell on the platform if they do not agree (especially if the service has already contributed high revenue previously).

The progress of the content industry is very dependent on smooth cooperation between the content producers and the music service providers, regardless of music, technolgy or consumer. The fragmentation of the market and distribution methods demand continuous innovation in music distribution, whether by technology or consumer experience, and not 'just' do what was previously a success.

A dependency on one type of technology - CD, RBT or even MP3 - would be an unnecessary repetition of history. By supporting innovation while maintaining the more developed business channels, the industry will become more stable. Of course, the industry volume must also reflect the times.

Ario is a co-founder of Ohdio, an Indonesian music streaming service. He worked in the digital music industry in Indonesia from 2003 to 2010, and recently worked in the movie and TV industry in Vietnam. Keep up with him on Twitter at @barijoe or his blog at http://barijoe.wordpress.com.

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