The biggest story of the week is the death of the Flip camera.  From the cradle to the grave in four years.  I believe its death was collateral damage, any other company would have continued the business, but Cisco selling consumer products was like a record label selling blade servers, ridiculous.

Still…what is the lifespan of a product?

One can argue what the lifespan of today’s music is, but the fascinating thing is purveyors assume we’re going to consume music the same way as we ever have.  Paying per track and waiting for our song to come on the radio.  And that’s just plain wrong.

The iPhone killed the iPod.  Not literally, but iPod growth is done.  Apple could have held back the iPhone to get a few more years of iPod revenue, but then, when that income plunged, Apple’s lunch would be eaten by Android and any other smartphone that got market share.  Hell, one can argue that Android got a toehold because Verizon didn’t have the iPhone. Come late to market and you’re screwed.

Which brings us to the second biggest news story of the week, the $114 Kindle.

For those not paying attention, you save $25 by getting ads in the screen saver and on the bottom of the homepage (not in books).  Amazon is putting the stake through the heart of physical books, by getting a player, i.e. a Kindle, in the hands of everybody who reads, by dropping the price.

Now let’s revisit history here.  Amazon was on the road to extinction.  Then the business was revolutionized.  New blood said the concept of stocking everything was insane.  Amazon’s SKUs were greatly reduced.  Then Amazon realized they made more money on used than they did on new, and transformed their business to compete with eBay.  Then Amazon started leasing server space, yes, Amazon is a gigantic cloud computing company, powering not only its own efforts, but those of companies you think are working on their own.

In other words, Amazon dreamed big and was willing to change course along the way in order to dominate and survive.

Amazon could have just continued to sell physical books.  But with digital, there are no inventory issues, you can store everything.

Despite the outcries of the Luddites, physical needs to be killed, both in music and movies.  It’s inefficient.  Sure, the highway’s going to be strewn with bodies, but explain how an enterprise based on physical inventory, needing to be shipped, needing to be trashed when not sold, purveyed in a brick and mortar store with bills for rent and utilities, is better? That’s like saying we should kill the ATMs and all go into the bank.

The third biggest story of the week is the new Spotify rules.

One, they’re too confusing.  How many hours?  How many spins?  It matters how long I’ve subscribed?  Apple wrote the rule book on this one.  Make it SIMPLE!

And if you can’t make money on an advertising-supported system, I’ve got no problem with new models, then again, make it comprehensible.

Then again, Spotify is two years old.  Is it halfway through its useful life, like the aforementioned Flip camera?

That’s what’s stymied the music industry.  It’s waiting for the next big thing.  Maybe it’s an endless flow of little things, with a short shelf life.

In other words, maybe Facebook is a fad, just like MySpace.  It depends on user input, without your information, Facebook is worthless.  Sure, it’s more efficient, the design is better than MySpace, but saying Facebook must exist is like stating that the Pet Rock must sell during Christmas 2011.

In other words, if you want to know what’s going on, if you want a digital roadmap, look to Amazon.

Amazon reinvented what the company was.  First, it was only physical books, ordered online.  Now it’s just about everything, sometimes sold by partners, but guaranteed by Amazon (no passing the buck here!)  And B to B, i.e. server services.  And digital distribution, i.e. the Kindle.

People are cheap.  Amazon knows this.  Which is why it found a way to lower the Kindle’s price.  Who knows, soon a Kindle may be free, like a phone.  Maybe it comes with the guaranteed purchase of ten books.

And Amazon didn’t ask for permission.  It paid physical wholesale to publishers to build its Kindle market, losing money on every sale.  Then it went to the agency model.  And now this agency model is utilized by people publishing themselves.

Compare this with the music business.  Where you must pay the same amount you did twenty years ago, and the industry prefers you buy the antiquated album, preferably on CD.  Huh, do you want me to use a Motorola Flip Phone too?  Or do you want me to use the RAZR, the cellular equivalent of the Flip camera?

People are cheap, but track sale prices went up.

People are cheap, but concert ticket prices keep going up.

Who’s speaking to the cheap?  Goldstar and Groupon.  And isn’t it funny, those enterprises are flourishing, unlike the powers-that-be in the music industry.

We need a rethink.

Then again, with their guaranteed contracts music employees are focused on their income, not survival.

Amazon and Apple are focused on survival.  They realize tomorrow they can be the new Flip.  And so can you.