Friday, January 6, 2012

Content and technology cycles

Most content outlives any presentation and distribution technologies. Content valuable enough will be converted to new formats and prepared for distribution on new carriers. This is nothing new and has been ongoing since humans started to draw and write.

Content creation involves effort and possibly considerable amounts of economical investments. Professional content creators live off their work, and naturally wants to be paid for providing their works.

Somewhere along the road, movie-, music- and publisher industry acquired exclusive distribution rights. When they where distributing content in a physical form (in atoms), this added considerable value to the product. Distributors got involved in all kinds of coordination and promotion activities related to their exclusive rights. As long as the distributors controlled the technology this went along fine, but with the invention of the music cassette the foundation for a copy culture was laid. Content consumers wanted to have copies of music in their cars, walkmans and in the living room. The VCR allowed copying of films. A growing pirate industry, mainly based in Asia was founded, but the economical problems was limited as they had to move atoms around the globe and copied material was not more accessible than the originals.

For music and movies this led both to direct loss for content creators, but it also provided culture sharing. When more people heard new music or films, some bought originals while some copied. It will be impossible to know if the entertainment industry have lost or gained in this game. A copy today may result in future sales of releases of music and movies.

When computers moved into the home copying of software soon became common as the physical burden was shrinking. We started to move bits on physical carriers (diskettes). When PCs was introduced copying flourished. Whether this favored or hurt the software industry is not quite clear. Microsofts success with Office was laid with the massive distribution of Windows which was heavily copied and distributed amongst users. I would guess the software industry as a whole, especially platform vendors, have gained opportunities because of copying. This is not a defense of piracy, but my estimation of the outcome. The software industry has slowly adjusted to the new realities. Software can be bought and downloaded or provided as as service (SaaS). Open Source developers uses the moving of bits their full advantage.

In the late 90-ies the Internet was introduced for consumers. The Internet made moving atoms obsolete. Content could now be moved as pure bits globally, with the speed of the network. The Internet provides us with a completely new way of distributing and consuming content. It is also a foundation for collaboration, creativity and provides us with vast new opportunities for doing business.

The elimination of the need for moving atoms also reduces costs. There is little value in moving bits, and the concept of the moving and copying of bits breaks the limitations of physical distribution. It also breaks exclusivity as content can be made available for anyone instantly at a global scale. The entertainment industry seems not have understood or do not welcome this. They seem to be willing to go all the way in their efforts to stop the evolution. They lobby for and support legislations like SOPA, PIPA and EU Data Retention Directive.

Technology follows very rapid cycles of invention, while content has a completely different cycle. The most valuable content will inevitably be converted to new presentation- and carrier technologies. If the copyright owners does not do it, consumers will. And why should they not? If you have bought a product shouldn't you be allowed to use it on gadgets not yet invented? To me it is not crystal clear copying is theft. Copying is also culture sharing, and generates future sales. The Internet gives us great possibilities for sharing culture and this could be lost, or at least very restricted if the entertainment industry will get it's will with lawmakers.

So why would anyone tie exclusive distribution rights to specific distribution technologies? This gives distributors no incentives for adjusting to new realities and opportunities. These industries are now lobbying for draconic laws that is protecting their relatively outdated business models. They refuse to meet the demand of their customers and stubbornly gives Internet the blame for everything not going their way. The difference now is that consumers (and pirates) have all the tools and infrastructure to fill in the gaps. When the gap left open by the entertainment industry is wide enough and demand is high, massive piracy is the inevitable result.

Instead of exploiting vast opportunities for culture sharing and selling a lot more (for a lower price per item, reflecting reduced costs) they want laws that will seriously impede democratic freedoms hard won through recent centuries. The Internet has breathed new life to democracies (video of Al Gore talking about SOPA was quickly deleted from Youtube...). Whether the lawmakers does not understand this, or do not want more democracy will be mere speculation. It is probably a mix of incompetence and using piracy as an excuse for their own agenda.

Another consequence of the internet is that there is only one market: the global market. Trying to limit releases to restricted areas will fail and only cause problems. It has become de facto Cargo Culting in the media industry. In the digital distribution world there is no borders or physical restrictions that creates exclusivity. A better strategy will be global releases and making use of social media buzz to spread the word and attract consumers to buy content from copyright holders.

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