Looking back at the history of American consumerism, when you see heavy competition in an industry with finite resources, expect sudden and unrepentant consolidation. Brands that can’t compete or those that find their ladder up abruptly stop, go looking for bigger companies to cash them out … and, typically, those companies happily oblige. Why fight for market share when you can just buy it up?
It’s happened in fuel and telecom and cable. Now, according to multiple sources, the music industry is ripe for yet another consolidation.
According to media reports, the CEO of Warner Music says his industry is in the right place for consolidation. Stephen Cooper predicts mergers will intensify competition and force everyone to up their game and serve their customers better: “As the contest for consumer time and money heats up, we would expect to see industry consolidation … hopefully leading to better marketing, faster innovation and a greater demand for music.”
While, for the most part, those terms mean better returns for the music industry’s bigger players, there’s hope for fans as well. While too many competitors can muddy the market, and too few allows for price fixing and collusion benefiting brands much more than consumers, there is a tipping point when everyone coexists happily.
In gaming, that tipping point came when myriad game consoles gradually became three. Other competitors either went away or began focusing on other aspects of the industry. Same with wireless, but that number appears to be four. Sure, there are a few smaller, well-funded upstarts, but they can’t seem to crack the wall build by Verizon, T-Mobile, Sprint, and AT&T.
Right now, though, streaming is new enough that upstarts can still grab enough market share to stick around, perhaps even upstage one of the current industry leaders, Pandora or Spotify. Especially when there are some incredibly well-funded new players in the market. After watching Pandora lap them, Google and Apple finally decided to get involved. So too, has Amazon. Expect one or two of these big names to fill out a Top Four spot in this industry as well, while they scoop up small-time newbies such as Deezer and Tidal.
Will consolidation in streaming be good for consumers, or just a power grab for industry moguls? What’s your take?
Ronn Torossian is the CEO and founder of 5W Public Relations Company. 5W PR is headquartered in NYC with offices in Los Angeles and Denver.