Go read Clay Shirky’s latest on newspapers

Newspapers and Thinking the Unthinkable:

Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven’t been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world was increasingly resembling the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

The music industry is having similar problems moving away from the “album of 10 songs you buy on a disk at a record store” model. One of the early, failed responses to MP3s was to have a machine in the record store that burned the customer’s choice of songs to a CD. The record companies couldn’t accept the idea that music could exist without CDs and record stores.

Now the record stores are gone. No more Sam Goody’s, Tower Records, or Virgin Superstores. Wal-Mart is the biggest brick and mortar CD seller and they could drop CDs at any time if they decide they need the floor space for something more profitable. The record labels’ role as gatekeeper and cash cow is disappearing and I don’t think they know what to do next. They’re just now starting to pull out of the “let’s sue our best customers” phase.