Unbundling – A History

By: Elizabeth Coffey, Marketing G2 Digital Marketing Specialist

Throughout history there have been many companies and industries who’ve had to unbundle their product in order to remain profitable.

Some have done so successfully and others haven’t, much to their dismay, handing over their revenue and profits to those who’ve disrupted their business. One such example of this in recent memory is the music industry.

The Music Industry

In the golden age of the music industry, studios released music on vinyl, 4-track and 8 track tapes, cassettes and later, CDs and because the format was rigid, people were forced to buy music that was bundled together, both the A-sides and the B-sides.

Music studios took advantage of this by only making a few of the songs on the CD quality hits, using filler tracks for the rest of the CD and this was an effective way to cut costs until the industry was disrupted by the internet, new music formats, and business models.

Napster, LimeWire, and other download services made quick work of disrupting the music industry’s business model, seemingly overnight, causing them to lose profits and revenue on music sales.

While Napster, LimeWire, and the like were shut down, the damage was done. The public realized that they no longer had to consume what the music industry was dishing out, turning to music streaming services like Spotify and Pandora and downloading music legally through services like iTunes.

The music industry is still reeling from the blow, taking an awful long time to adjust to their ‘new normal.’ The same sort of thing can be seen today happening to cable TV as they deal with cord cutters and competitors like Hulu and Netflix.

The news industry needs to take charge of its own content unbundling, before another company (or two) swoops in and does it for them. Flittz allows news publishers like you to do just that without compromising your existing subscription sales.

For an inside look at why selling articles alone or by topic is advantageous to news publishers, look ahead to the next installment in our reader revenue article series.

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