Friday, February 20, 2009

Banks and the major players in music industry - the parallels?

Having had a period in both worlds - my initial calling was as an "economist" - I am trying to draw parallels between the decline of the banks and that of the majors in the record industry.
It's difficult and I think that this will be an evolving topic over the next period.
So far, I have laid both sides down to technology and the ignorance regarding it. The bank bosses blindly followed the findings of rocket scientists who could come up with an apparent alchemical way of turning low quality housing in Hartlepool into squillions of pounds for bank bosses.
The major record companies fought it on the other hand, not realising what could happen to their revenues. They fought Napster, they have tried to fight file sharing. Funnily enough it was a computer company, Apple, who showed them the way forward, with itunes. Unfortunately for them, just as there were beginning to be revenues appearing from this side, the recession struck big time.
So the contrasts are probably greater than the similarities. Other contrasts - music has a better quality underlying product, even if it seems costly, than the banks had. Music development is a long-term phenomenon. By contrast, banking, certainly in the past few years, has been a short-term fix.
Both have been equally unable to learn from history or from their mistakes.
Certainly there will be different solutions to the problems. When Guy Hands tried to solve EMI as one of short-term financial returns, he failed miserably.
I just feel that the jazz world probably has the answers for the music industry. There are people still in the majors who believe in music.
The advisers to the governments on the banks themselves are implicated and trying to save their skins.

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