Wake up: Content industry needs a reboot

• Television is dead but content industry growing faster than ever
• New gaming and app platforms are transforming the industry

THE music industry is probably the best example of how a traditional content industry died and was reborn again.
 
I spent a number of years in the United Kingdom working for EMI Records in the early 1990s. EMI Records was one of the oldest and largest music record companies on the planet. It had a number of great labels like Parlophone, HMV, and had just acquired Virgin Records from Richard Branson.
 
It was home to some of the best-selling music back catalogue like Queen, Kate Bush and the Beatles. Look up EMI on Google and you can see the list of incredible acts it had on its roster, and you would be amazed.
 
In the early 1990s, we were transitioning from vinyl to CDs (compact discs) and eventually closed down all vinyl production by 1991 [although vinyl has had a revival since – ED]. We thought then nothing could top CDs.
 
The Internet then was just a form of communication of very rudimentary email using quite limited copper wires. The idea of people downloading digital copies of music tracks at low prices, or even for free, just seemed unfathomable.
 
Within 10 years, everything changed. The Internet became pervasive, accessible and faster. The record companies fought vigorous legal campaigns to try and block off any form of access to their artistes’ repertoires via the Internet.
 
Some cases were won, some failed. MP3 players and USB sticks came along and broadband became broader. The tide became a flood.
 
New artistes realised that the record labels were no longer the be-all and end-all to get their music out there. Artistes who came out with songs could release them online and hope to be noticed in a way they could not before.
 
The game-changer was Apple Inc with the iPod and iTunes. Finally an online marketplace which was legal, cheap and incredibly user-friendly was available to all.
 
Artistes demanded to be on the iTunes store and a new music chart was born. New acts and artistes ignored by traditional labels had a new outlet which could test their popularity and make them some money to boot, without having to pay a distributor or middleman – and if popular enough, the record labels would go to them.
 
Now EMI Records and many of those other big record labels of the 1970s and 1980s are gone, either bankrupt or bought over and ‘re-labelled’ by their new owners. The survivors like Universal were the the ones which did not fight the new technology and the new Internet platforms, but absorbed them and fashioned new business models.
 
The music industry still produces huge money-making acts, and has spawned a new industry of direct-to-consumer labels. MP3 players have now been replaced by smart devices and Apple is now the host of more music acts than any other music label. The cost of entry for new acts has reduced.
 
Whether we have great acts like the Beatles or the Rolling Stones appearing again will be a matter of conjecture.
 
Content and platform play

The games industry adapted the lessons of the music industry well, working with the platform providers from the beginning. Games developers worked their content within the technology and the technology providers worked with the content developers.
 
The realisation was that without the content, their technology would not survive and grow.
 
Sony was not just a console maker but a developer of all forms of content platforms. It then decided to become a record, TV and film producer as well so as to ensure it would have exclusive content for its platforms.
 
Microsoft also decided to get in the act with its Xbox. It realised that being a software company alone was not enough, but to become prevalent in the content space the only area it could get in first was games, with the hope its technology would become the de facto home entertainment centre.
 
Then came along Apple with the iPhone and iPad, and just as importantly the App Store. These smartphone and tablet platforms, packaged with an online store that was easy to use and cost effective for everyone, compared with consoles and the need to acquire a disk.
 
Now games become available to people who never played games before – grandparents and parents played as much games as their children. In five years, the App Store has seen downloads from one billion to now over 50 billion.
 
The games industry had more revenue this year than the film industry – and this has been going on for the last three years. The latest Grand Theft Auto released this year is one of the most successful content franchises of any platform, be it film, TV or music, with revenue over US$1 billion.
 
The cost of entry for game developers is cheaper than ever, and they have access to the globe immediately, via any app store or any other smart device platform or telco.
 
Next Page: Lessons from the past and what Malaysia needs to do