Hollywood's current crisis is self-inflicted, stemming from a decades-long failure to adapt its business models and economics. Instead of innovating to compete with tech-driven services like Netflix, the industry persisted with inefficient structures and is now blaming disruptors for inevitable consumer-driven changes.

Technological and cultural disruption is a recurring cycle, not a unique event. Just as streaming artists displaced MTV and rap overtook rock, today's dominant players will be replaced by the next wave. Resisting new technologies like AI is futile against this natural industry evolution.

Disruption opportunities in sectors like publishing exist not because incumbents are incompetent, but because their existing structures and business models force them to be "backward compatible," preventing true innovation and creating an opening for new players.

Instead of adapting to the consumer shift toward digital music and file-sharing, the music industry sued its customers. This resistance to change was disastrous, and the industry's revenue only recently returned to its 1999 peak, offering a stark warning against ignoring user trends.

Referencing the failure of bookstores against Amazon, iCapital's CEO argues that hoping a new technology wave will pass is not a strategy. Incumbents must adopt new technologies, even if it forces a difficult change to their business model and compresses margins, to avoid extinction.

The music industry is consistently the first media sector disrupted by new technologies like AI. This is because its small file sizes make it easier and faster to manipulate than video. As a result, music serves as a leading indicator for the challenges and business models that will eventually impact film, TV, and news.

Before streaming, good local musicians could make a living. Now, platforms like Spotify pit them directly against global superstars like Taylor Swift. This dynamic, present in many industries, concentrates earnings at the very top, making it hard for the "very good" to succeed.

In the early 2000s, Condé Nast executives were the "masters of the universe" who dismissed the internet. Today, that power structure has completely flipped, with traditional media struggling for relevance while tech dominates the economic and cultural landscape.

The music industry allegedly employs a cynical strategy: it tacitly allows tech startups to use its intellectual property without licensing. Once a startup gains traction and value, the industry launches coordinated, expensive lawsuits to force a large settlement for cash or equity.