How The Legacy Entertainment Industry Poisoned The Well For The Innovation It Desperately Needs

from the these-things-come-back-to-bite-you dept

Soon after the death of SOPA, we wrote about a great post from entrepreneur Tyler Crowley (which, sadly, seems to have disappeared from the internet) discussing his reactions to some entertainment industry execs trying to "make peace" with entrepreneurs. He does a great job discussing different "islands of opportunity" for entrepreneurs, noting that certain "islands" are very welcoming for enterpreneurs and developers:

For tech folks, from the 35,000' view, there are islands of opportunity. There's Apple Island, Facebook Island, Microsoft Island, among many others and yes there's Music Biz Island. Now, we as tech folks have many friends who have sailed to Apple Island and we know that it's $99/year to doc your boat and if you build anything Apple Island will tax you at 30%. Many of our friends are partying their asses off on Apple Island while making millions (and in some recent cases billions) and that sure sounds like a nice place to build a business.

But, of course, when it comes to "music biz island" the "natives" are not particularly welcoming. Even if you think "Apple island's" rates are too high, at least they don't try to destroy your business:

Now, we also know of Music Biz Island which is where the natives start firing cannons as you approach, and if not stuck at sea, one must negotiate with the chiefs for 9 months before given permission to dock. Those who do go ashore are slowly eaten alive by the native cannibals. As a result, all the tugboats and lighthouses (investors, advisors) warn to stay far away from Music Biz Island, as nobody has ever gotten off alive. If that wasn't bad enough, while Apple and Facebook Island are built with sea walls to protect from the rising oceans, Music Biz Island is already 5 ft under and the educated locals are fleeing for Topspin Island.

I'm reminded of this as Derek Khanna calls our attention to a footnote in Paul Graham's key post that discusses "What Happens At Y Combinator." If you don't know, Y Combinator is the leading startup accelerator out there. It's the place that many entrepreneurs strive to go to build up their startups and turn them into real companies. It has helped produce and/or jumpstart Reddit, Dropbox, AirBnb, Humble Bundle and more. Basically, if you want a pulse on what the best entrepreneurs are thinking about/working on, looking to Y Combinator is a good place to start.

Yet, in Graham's discussion of what happens at Y Combinator he explicitly tells startups to never bother doing a startup that in any way will need to involve record labels:

Except for the record labels, which are effectively a rogue state with nuclear weapons. There is nothing we or anyone else can do to protect you from them, except warn you not to start startups that touch label music.

I don't know how long that's been in there, but it's absolutely true. This is the exact time when the industry needs more innovation and entrepreneurial spirit, yet anyone who's been watching the space knows that actually trying to help legacy industry players is a ridiculous minefield. Earlier this year, I wrote about Michael Carrier's great research into the chilling effects that the recording industry's efforts have had on music entrepreneurs, leading to a massive chill in innovation in the space.

And, of course, even when a company can actually get through that gantlet, and actually provide a decent service, they get attacked by artists for not solving all their problems. It's a space where basically every one of the legacy players has made one thing clear to the innovators and entrepreneurs they need the most: stay out.