Video Killed the Radio Star is not just a very catchy song; it’s also a line which perfectly narrates the concept of creative destruction. This is a process whereby new innovations and changes in the market begin to replace older ones. The phrase was first coined by Austrian economist Joseph Schumpeter in 1942 in his piece Capitalism, Socialism and Democracy where he gives the following line to explain creative destruction as a
“process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
This concept is the theme of the song Video Killed the Radio Star where the idea of technological change in media is explored. While this song was released way back in 1980, its theme is becoming relevant again today. Just for a different medium. We are now experiencing the streaming revolution in the music industry. Physical music products like CD’s, records, and tapes are all declining in terms of their total contribution to world revenue in the music industry, and as can be seen below streaming has now become the biggest revenue contributor to the global music industry.
This phenomenon is not just observable in the music industry, just look at the TV and film industry. Streaming services like Netflix are fast becoming one of the most popular ways for people to watch shows and films, replacing older mediums like DVDs, VHS, and even TV.
While it may be sad from a sentimental perspective to see these old mediums die and make way for new ones, it is often the case that a new commodity replaces others because it is a favorable product for the consumer. For example, paying €9.99 a month for Spotify is a lot more cost effective and efficient than buying every song and album that I want and then carrying them around with me hoping they don’t break.
By Daragh O’Leary
The graph above was taken from the 2018 Global Music Report which can be found in full here