Status Quo Bias

QUOTE

John Maynard Keynes once said…

“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

(British economist.)

CONCEPT

Status Quo Bias

Status Quo Bias describes the human preference for keeping things the same or maintaining a current or previous decision.

This bias leads individuals to resist change and prefer the familiar, even when new alternatives might lead to better outcomes.

The bias is rooted in the desire to avoid the potential loss and discomfort associated with change, making people disproportionately weigh the advantages of the status quo over potential benefits of new options.

STORY

Spotting … Change?

In 1999, global recorded music revenues peaked at $23.8 billion. The advent of an accessible internet for all ushered in an era of piracy, causing sales to decline ever year thereafter.

Despite the music industry’s best efforts, nothing could stop revenues from shrinking.

The future of music was dire.

Enter Spotify in 2008, amidst significant resistance from the music industry. The concept of streaming music, essentially renting access to a vast library of songs rather than owning individual tracks, was a radical departure from the status quo.

Many industry insiders were skeptical, viewing the subscription model as a threat to revenue and the value of music.

The bias towards maintaining the existing sales model was strong, influenced by fears of cannibalizing album sales and the potential for increased piracy.

However, Spotify and other streaming services addressed these challenges head-on, emphasizing the benefits of their model: broader access to music for consumers, a solution to piracy by offering a legal alternative, and a new revenue stream for artists and labels through shared subscription income.

Over time, as more people tried streaming and appreciated its advantages, the industry's resistance began to wane.

The transition wasn't immediate, but by the mid-2010s, streaming had become the primary way people consumed music. This shift dramatically altered the music landscape, increasing overall industry revenues after years of decline due to piracy and changing how artists release and promote their music.

The music industry's acceptance of streaming services underscores the importance of embracing change and the potential losses of clinging to the status quo, providing a powerful lesson in the dynamic nature of progress and adaptation.