What the news industry is experiencing now, the music industry started dealing with 10 years ago – falling revenue and a migration to digital. Ten years on, the music industry is still coming to grips with the changes. A new force – iTunes – has emerged and with it, the iPod, the MP3 and a shift in consumption that has resulted in 95% of music downloads resulting in no payment to the creators, at least according to IFPI data.

As the news industry faces up to the digital challenge, it’s worth looking at the music industry’s last decade to understand what the news business has coming. Its future success will depend on:

– Its approach to the notion of ‘free’ content.
– Its ability to adapt not just its own process, but that of the ecosystem surrounding it.
– Its willingness to embrace new technology, to experiment and innovate and its openness to the needs of consumers.

What follows is a list of four things the news industry can learn from the music industry’s last decade.

1. Rumors of your death will be greatly exaggerated

The ‘death’ of the music industry has been playing out now for a decade. And yet, millions of people still buy CDs. Even though they’re freely available on P2P networks and cheaper in a digital format, physical CDs still matter to people. Even vinyl still matters to people. It’s safe to say then, that there will be fewer newspapers sold in ten years, but there will not be none.

The music industry exists because people love music. Some businesses in that industry might be less profitable now, but people still love music as much as they ever did. The newspaper business exists because people need news. Profitability is wilting, but in a world overloaded with messaging from all manner of sources, the need for original, exclusive, highly relevant and genuinely useful content has never been greater.

Lesson: Just like people still want music, people still need news. The news industry isn’t dying, but it must evolve to avoid stagnating.

2. The print industry’s brand will suffer

The music industry has copped a beating over the last decade — much of it has been deserved. There are countless examples of insanely disproportionate lawsuits that have outraged reasonable music consumers. Combine this with the lingering notion that major record labels are suit-filled factories with a taste for vulnerable, indie blood and you can start to see why the music industry gets blamed for all of music’s ills.

The print industry might have the same coming. Earlier this year, the Associated Press board voted to “pursue legal and legislative actions” against those using content without permission. Aggregators will be the first targets of these actions. The AP has also committed to a remarkable plan which will see it charge up to $2.50 per word for use of its articles.

Rather than embracing the notion of “do what you do best and link to the rest” and maximizing the value of the link economy, the AP appears to be choosing the litigious route. When the music industry stared down Napster and BitTorrent, it too chose the path of litigation. And while litigation effectively throttled Napster (and a number of subsequent players) it did little to slow the spread of illegal downloads and nothing to engage a generation of consumers embracing a new form of consumption.

The legality of aggregators who reprint an excerpt of text and link to it is a gray area. As the argument over the nature of copyright for print online develops, expect the boundaries of ‘fair use’ to be tested. If we learn from the music industry’s experience, we can expect any fallout from the testing to splash on to the news industry at large.

Lesson: Learn from the mistakes that the music industry has made. The news industry’s brand might suffer, but the decline in public perception can be mitigated by embracing new forms of content distribution.

3. The ecosystem is the problem

Music industry people see the digital opportunity. However, seeing an opportunity and making the most of it are two different things. One of the major issues for the music industry in the last decade has been evolving the music ecosystem away from making, selling and distributing physical CDs and towards new digital distribution models.

Artists, managers, labels, publishers, press, distributors, packagers and producers are all still to some extent entrenched in traditional ways of thinking about the music industry. Innovation has to overcome the combined inertia of all these forces to see the light of day.

The news industry will have the same problem. Anyone who makes a living off the process of supplying, writing, editing, printing and distributing printed piles of paper all over the country will have to be transformed if the news industry is to embrace the digital opportunity. Most importantly, consumers will always prefer free. Regardless of whether its music or news, it’s hard to convince people to pay for something they’re accustomed to getting for free.

There are plenty of smart people in the news business with smart ideas about how to evolve. News Limited’s Australian CEO John Hartigan had this to say:

“How many journalists … have written a story recently that was original, exclusive, highly relevant and genuinely useful to [their] audience? … Fewer papers are being sold and in my view it’s because many of them are largely boring and irrelevant to their readership. Their content is ubiquitous rather than unique.”

Hartigan understands the problem and sees the opportunity to embrace new ideas. But ideas and insight aren’t the issue, execution is.

Lesson: The news industry has great ideas, but execution will remain a problem until it learns to let go of old models of reporting, distribution, and consumption and evolve.

4. This is the end of one-size fits all

It used to be that music fans had one main way to consume musical products – the CD. What the music industry is now learning is that music fans come in all shapes and sizes and are willing to consume all types of musical products, from free to outrageously premium.

News () is no different. It’s no longer about one paper for all people. It’s about news distilled from many different sources, delivered many different ways on a range of platforms.

People have shown they will pay for premium products in specific niches. The success of publications like Monocle is testament to that. Best described as the Economist of lifestyle magazines, Monocle isn’t just a magazine, but a multi-platform brand encompassing the magazine, a physical store with Monocle branded merchandise, and a web presence that publishes text, audio and video content. Consumers engaging with Monocle can buy the magazine in stores, they can access content for free online, they can pay to engage online more deeply or they can go to a Monocle store and buy Monocle products.

The news industry is going to have to develop a similar model that matches multiple products, at multiple price points, through the right channels to the right consumer. This is starting to happen, but there’s a long way to travel before people understand that a stand-alone, general news website isn’t a sustainable business model.

Lesson: Independent music artists have found a way to make money by developing new, innovative value-add models — the news industry must follow suit.

A decade ago, the record industry was blindsided by the shift to digital. Analyzing the impact of that change is a worthwhile exercise for anyone with a stake in the future of news. Where do you think the news industry should be heading? Leave your thoughts in the comments.