UTURE VIEW

68 THE FUTURIST

July-August 2007

www.wfs.org

A funny thing happened in the music industry afew years ago. Record companies began suing theircustomers. The Recording Industry Association of America (RIAA) filed lawsuits against, amongother defendants, 13-year-old girls in order to stemthe rising tide of Internet downloading of MP3files. Most would agree that lawsuits are a less thanperfect way to relate to people who buy your prod-ucts, especially since the industry normally spendsmillions to attract teenagers. The record compa-nies’ peculiar choice illustrates why, in this rapidlychanging world, foresight is so essential.When you look back to the 1990s, it is importantto recognize that record executives are not stupid.The marketing and strategic planners at companieslike Sony, Atlantic, and Universal were and con-tinue to be experts in finding talent, market segmenta-tion, retail channels, branding, and promotion—all thethings you need to compete in the entertainment indus-try. They were right on top of their competitors, scan-ning their marketplace for new trends in customer taste,tracking the moves of other record companies, and evenlooking out for substitute products. Video games andcable television were as much potential competitors asanother record label with a hot band. These executivesdid what most people do—they looked at their competi-tion and their customers and tried to anticipate the nextmove.What they did not do was follow a couple of key tech-nological trends outside of their industry. Throughoutthe 1990s, home computer ownership was increasing. Atthe same time, more and more computers were capableof accessing the Internet. On the horizon were new im-provements in software that enabled audio to be com-pressed into a small amount of data while retaininggood sound quality. The file format called MP3, or “Mo-tion Picture Engineering Group Audio Layer 3,” was born. Unlike previous attempts to digitize music into asmall package, MP3 files actually sounded like music.Unlike copying music onto cassette tapes, you couldmake an unlimited number of copies at the touch of a button. This technical revolution occurred at the exactmoment that consumers everywhere were connecting tothe Internet at homeor at work.If you recognize theword “Napster,” therenegade free file-sharing site, then youremember the chaosthat resulted. By late1999 and 2000, freemusic poured out of the Internet with nocost to consumers andfew technical difficulties. Napster was so terrifyingly ef-ficient at connecting consumers with one another to“share” their music that anyone with a computer couldquickly find any song with a simple Web search. Musicno longer was a physical product made of plastic; it wasnow an ethereal concept that could be stored on a harddrive and shared at will, broadcast to anyone with a fewmoments to do a Web search.Moreover, market research showed that young peopletrading MP3 files had significantly different values thantheir elders when it came to the legality and morality of downloading. Appeals to younger consumers by theRIAA to equate the trading of MP3s with shoplifting fellflat. The industry sued, and came off looking like bulliesin the process.If industry executives had spent a little more timethinking about how technologies could affect their busi-ness, we might have had iTunes five years earlier andfewer teenagers hiring attorneys to defend themselvesfrom record labels!

The Transformative Power of Trends

In today’s world, you need to think not just aboutyour own future, but also about the future of nearly

Getting Ahead byLooking Ahead

Apracticing futurist explains whyforesight can make the differencebetween success and failure.

By Eric Garland

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Eric Garland