Idea Lab

This past week, the National Association of Music Retailers landed in San Francisco to hold their 50th annual convention. Never heard of them? Neither had I, until I responded to a random email pitch and decided to attend for a few hours. Essentially, NARM is a trade group that includes every piece of the music ecosystem, from artists and songwriters to retailers to record labels.

While the organization was unfamiliar to me, the main topic of conversation at the convention was all too familiar: How do we find a new business model in a digital world?

The music world has this legacy product, the compact disk, which is declining in sales each year but still generates huge amounts of cash. On the other hand, the industry's new digital businesses (online and mobile) are exploding, but aren't generating enough money to offset the decline in compact disk sales.

Sound familiar, newspaper fans? Even the underlying irony is the same: "More people are enjoying more music in more ways than in the history of recorded music," said Eric Garland, co-founder and CEO of BigChampagne Media Measurement, a market research firm that analyzes online media. While passion for music is growing however, paying for it has become optional, Garland noted. The 5 million downloads from iTunes is dwarfed by the estimated 1 billion songs transferred for free via various peer-to-peer networks.

"We're going from a business that had a cash register between customers and the music to a model where at best we have at tip jar," Garland said.

So the music industry is experimenting with various business models, like subscriptions, selling music with other products (buy one can of shaving cream, get the new Rolling Stones album!), embracing social networking and marketing.

"It's sparked the most explosive period of innovation and experimentation that the music industry has lived through," NARM president Jim Donio told me.

Here's the other tricky piece of the puzzle: The industry still expects that in five years, half of all music sold will still be on a CD. At the end of the day, people still like the format and are attached to the idea and the emotional experience of walking into a store and purchasing their music, Donio said.

I listened hard for any obvious lessons or strategies that newspapers should consider, and I didn't necessarily hear any. Experiment wildly. Study the audience. Be platform agnostic. Embrace any format or device where users get their music.

It's worth remembering, then, that the problems savaging newspapers aren't unique. Movies, TV, almost any media is struggling with the same fragmentation hitting newspapers. They're asking the same questions. And still finding the answers just as elusive.