Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age by Steve Knopper (The Free Press, 2009)

Ever wonder how the music industry REALLY got into such a problem with the Internet, illegal downloads and all that? Well, this is the book for you.

Steve Knopper takes the reader on the journey to digital music. He begins his book in 1979 with the Disco Crash, followed by the wide-reaching impact of Michael Jackson’s “Thiller” and the rise of MTV. He discusses the introduction of the CD, the problems with indie record promotion, the death of the single, and  Shaun Fanning’s development of Napster.

Too often when outsiders look at the record industry they embrace the stereotypes that the industry is stupid, greedy, and the enemy of consumers and artists.

But the recording industry is made up of people, and humans make mistakes. Human nature is to celebrate when things are going well, and to not want anything to change. When things don’t go well, humans tend to look for something to blame. Napster became the perfect storm to blame.

The power brokers running the recording industry did not grow up with computers; they got to the top with a different skill set than what was required when the Digital Age dawned. When the industry leaders were hit with the new digital reality, their natural reaction was to want everything to stop and go back to the way it used to be. It is understandable that when the rules of the game changed—like they did at the end of the 20th century—then those who had won under the old rules would be lost.

However, the job of leaders is to be able to adapt to change. And the guys at the top—and the great majority were guys—tended to bury their heads in the sand when change hit them. Not only did most not have a grasp of the digital age, they did not reach out for input that would have helped them understand it.

This book is an indictment of the recording industry when it comes to embracing the Digital Era. But Knopper doesn’t just go on a tirade—like so many others—without backing up his story with first-hand accounts of what happened in board rooms of major corporations as Napster appeared on the scene.

He concludes with “The Future,” where he states that the labels “will become an anachronism.” He continues, “The biggest ones may survive, by manufacturing a few…blockbusters every year. They may still make money licensing their catalogs to movies, commercials, TV shows, and video games [but they] ….may have to sell their lucrative catalogs to other companies [who will] stop messing around with any type of digital rights management, stop suing customers, drastically reduce digital-track prices, cut unnecessary overhead like warehouses and crates, and thereby return to 1980s-style profits.”

He notes that some suggest “Apple or Microsoft or some other visionary company with money to burn will buy up the assets and, finally, start running the major record labels as high-tech content houses.” But in the end, Knopper concludes that “it sure feels like the end is near.”