Urban Eola

Old businesses need to adjust to new technologies

The advent of new technology has put many traditional industries out of business (camera film industry and see yesterday's post on pay phones). The rise of the internet has especially put many businesses out of order (travel agencies, local newspaper classified sections, etc).

Currently, there are two industries that are fighting to keep the rise of new technologies from affecting their business as they know it: the music recording industry and the real estate industry.

The music industry
Practically every person I know who has ever used a computer has downloaded a song from someone else. I bet executives in the recording industry have even done so. However, the practice of downloading (copyrighted) music is considered illegal and random people are getting letters in the mail demanding that they pay big money for those songs.

How can something that 90% of all computer users do, be illegal? The Recording Industry Association of America (RIAA) has been overpricing their music (CDs cost less than a penny to make) for years and now finally our capitalistic nature has found a way around paying such high prices. Score for technology and boo to the RIAA.

Real estate industry
There was a piece on 60 Minutes this past Sunday talking about how the real estate industry has done very little to go online in terms of knocking out the 6% fee that agents get for showing off a house. An innovative company/website called Redfin is trying to break into the business by eliminating (and thus saving you lots of that 6%) the agent fees by showcasing your home online. Think about how much 6% is on a $250,000 house = $15,000. The Last Stand of the 6-Percenters - New York Times.
Maybe for years we've been over-paying in these industries. Other industries have adapted (newspapers going online, etc), now it's your turn.

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posted by Michael Tavani @ 11:12 AM |


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