you do not have a
crime wave, you have a marketing problem.
The point is not to argue the highly contentious legal issues of copyright
and private property law, particularly as it relates to digitally downloaded
music files. The more precise point is the lack of understanding of value by
the music company executives. By keeping their focus on the inside of their
companies, they completely ignored the external value potential of easily
obtaining music files. It took Steve Jobs of Apple Computer to capitalize on
this opportunity with iTunes—which at the time of this writing has a 70 percent
market share on the legal downloadable music market—in an eerily
analogous manner in which he capitalized on the personal computer opportunity
invented at Xerox’s Palo Alto Research Center, validating Mark
Twain’s line, “History doesn’t repeat itself—but it does rhyme.” Had the
music company executives been focused on the outside of their companies—
studying, analyzing, and innovating what their customers found valuable—
they could have invested many millions into productive research and development
rather than throwing away that sum down the judicial sinkhole. Yet
the Napster saga is just one in a long history of revolutions taking place outside
the confines of an existing industry, in what the Austrian economist
Joseph Schumpeter labeled “creative destruction.” The reason entire indus-