The Sound of Change
The New Reality for Customer Engagement
It's hard to imagine an industry that has been more affected by the Internet than the music business. Many believe that the industry has been far too slow to accept this new reality. With that in mind, CIO Insight spoke with Warner Music Group CIO Tsvi Gal to get his thoughts on the future of music.
CIO Insight: What's wrong with the music industry and how does it need to change to adapt to new technologies?
Gal:I think the industry has basically ignored the warning signs that were on the wall. We as an industry by and large ignored piracy in hopes that it wouldn't be widely accepted. Of course, it's not going to go away so easily. And the music industry has also been very slow to recognize that there are a lot of people who would like to do their shopping online. Now there is a generation of people who are not used to paying for intellectual property, not because they are bad people, but because we never insisted on teaching them that it has to be paid for. So the industry is now trying to reconcile its mistakes.
As you can see with the great success of Apple's iPod and iTunes when they recently sold more than 200 million downloads, there is a market for legal music. So I think there will be many more legislative changes as to how you really protect intellectual property in modern life.
What about tactics such as digital rights management? Do they work?
Well, we don't have the answer because as DRM continues to evolve, so will the pirates. As we've seen with many of the efforts to protect physical CDs, every time there is a solution, someone finds a way to break it. But I'm a true believer that eventually we're going to reach a status quo in which most people are willing to pay for content.
Is the end of the CD imminent?
I spent most of my career in banking, and in 1973 there was an announcement that within ten years there won't be any checks in the world any more. Well, guess what? There are still a few, not many, but people still use checks. The moral is: Nothing is black and white. Online music will continue to grow, and many people will use it as their main venue for purchasing music, but both worlds will live together for the next few years. I think it's premature to think that recorded music companies will disappear. I've yet to see one band that actually started on their own on the Web, with no help from anybody else, and really made it.
At a Glance:
Background: Prior to Warner Music Group, Tsvi Gal was president of AT&T's ATT.COM from 20002002, where he led the company's e-commerce activities. Before that, he was CTO of enterprise technology services at Merrill Lynch & Co., where he helped to build the firm's electronic trading system. From 1996 to 1999, he was executive vice president and CIO of North America applications for ABN AMRO Bank. Gal graduated from Rutgers University with high honors in computer science, and holds an MBA from Golden Gate University.
Career Highlights: In 2001, Gal was awarded the Einstein Award for achievements in science and technology by the nation of Israel. He is the co-author of Distributed Computing Management, and serves on the board of directors for several companies, including Expand Networks, T.E.N. and eSquare.
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