The New York Times Magazine ran an article this Sunday on Rick Rubin's attempt to turn around the fortunes of Columbia Records and perhaps the entire music industry. Rubin is known for having started Def Jam Recordings in his dorm room, discovering L L Cool J and the Beastie Boys, working with the Red Hot Chili Peppers and the Dixie Chicks, and restarting Johnny Cash's career. Now as co-head of Columbia he doesn't go to the office but does listen to music. In addition to picking out the next acts, he's trying to get Columbia and other labels to see they need to change their business model (he's a proponent of flat-rate subscriptions) before they are sold at fire-sale prices to Google, Microsoft, or whatever.
One of the more useful observations, which has implications for other industries as well, came from a set of focus groups they ran using their summer interns:
The kids all said that a) no one listens to the radio anymore, b) they mostly steal music, but they don't consider it stealing, and c) they get most of their music from iTunes on their iPod. They told us that MySpace is over, it's just not cool anymore; Facebook is still cool, but that might not last much longer; and the biggest thing in their life is word of mouth. That's how they hear about music, bands, everything.