I am doing some research on the online video / virtual club space and just ran across a very interesting blog post by Justin Kniest, Founder and CEO of the now defunct Fabchannel.com. I know, this post is from March 2009 but what he is saying, below, is (unfortunately) still very timely and true: there is no license for content without money (fair enough) but the amount of money (and the conditions of the license) that is being asked for is tantamount to an invitation for a kamikaze mission. 10 years after Napster 1.0, the music industry is still asking for utterly impossible rates, free equity, and all kinds of veto rights as far as the use of content is concerned. Someone out there, please: tell me how this is going to be different with Spotify, MOG, iMeem, rdio etc?
"Fabchannel and the record Labels
No money means no content. That is the way the labels (major and independent) look at potential partnerships with internet companies. Even when it is obvious a service provides added value in promotion and sales, the mantra stays the same: no money, no content. Even when a service invests substantial amounts of money in creating high quality concert footage and an award winning platform to show it to the world, the mantra stays the same: no money, no content.
When you look at it from a label point of view it might even look logical. Their businessmodels have been hammered the last ten years by decreasing CD sales. Their radio, TV and newspaper partners are not doing their promotional job as they used to. And last but not least: the majority of consumers are now downloading tracks for free. All bad things for companies that invest in recordings of artists.
So the most important feature that new partners have to have is: MONEY. Money to counter the decrease in CD sales. Promotion has turned into a dirty word. MTV for example got big and wealthy by showing videoclips paid for by the labels. So now these labels think: We will not let that happen again. From now on everybody who wants to become a mediapartner online is going to have to pay upfront to even start"
Music industry expert to Mandelson: Legalise it! Media Futurist Gerd Leonhard says that musicians, labels and government need to focus on their wallets rather than technology if they are to save music from the threat of illicit music downloads on the internet. Speaking ahead of the event, the “Future of Music / Stop Disconnection”, Gerd (who advises many of Europe ’s top InternetService Providers) said: "Music industry lobbyists are saying unpaid downloads are killing our business. In response, the UK government is now considering legislation that would allow people who illicitly download to be disconnected from the Net without a court process. This leaves many musicians scared and perplexed, some arguing for disconnection, others for their own fans to be restricted to dial up speed internet. Neither will see the artists or labels paid more or the relentless advance of online music sharing halted.”
“Back when UK radio stations were not licensed to play music at all, the arrival of the PPL (1934) and MCPS-PRS (1914) collective music licences opened the door for proper payment for music performed in public. We now need the government to legislate for music online, and mandate the creation of a Digital Music License that will put money into the pockets of the creators while giving the consumers what they want, at the same time.”
Bizarrely, the UK government, led by Lord Mandelson, the UK Business Secretary, seems to have done a 180-shift in the past 2 weeks by once again proposing to disconnect alleged file-sharers from the Internet. In other words: if the content industry can't get people to buy music or films, or other so-called content, by offering relevant, fair and affordable new ways to do so, maybe the government can help to force people back into buying the old-fashioned way, i.e. by the unit / copy? Rather than actually change the industry's business model, let's just change the consumers' habits - problem solved!
If you want to be puzzled, just read the UK government's announcement (PDF via Arstechnica). The Net is buzzing with news on this topic; see below. The FT has a good recent update called 'Claws & Effect' here; wherein I read (with little surprise): "Senior music industry figures, such as Lucian Grainge, head of
Universal Music International, have been influential in mobilising
Westminster to act". Lobbyists succeed again?
The bottom line can be summarized like this: "Let's just see if we can still force people to consume music in the way that suits us better". Never mind that the very similar French Sarkozy-'Bruni' proposal was just recently deemed illegal by the French Constitutional Law as well as by the European commission - maybe some good lobbyists can revert that, as well?
Here are a few quotes I have collected on this topic:
Those who like this idea
"John Kennedy, chief executive of IFPI, the organisation representing
the recording industry worldwide, says: “It is not enshrined in any law
anywhere that one has the right to steal music, films and books. There
is a crisis in the economy, and as well as respecting rights we have to
think about the economy and jobs” (FT) Related read: John Kennedy at RSA
“We welcome the government’s recognition that this problem needs to be
addressed urgently, so today is a step forward that should help the
legal digital market to grow for consumers,” the BPI, the music
industry trade body, said. “The solution to the piracy problem must be
effective, proportionate and dissuasive” (FT)
Those who don't like this idea
"Charles Dunstone, chief executive of Carphone Warehouse, one of the
UK’s biggest providers, says: “We are going to fight [being forced to
disconnect customers] as hard as we can. Our fundamental duty is to
protect the rights of our subscribers” (FT)
"A Virgin Media spokesperson said: “We share the government’s
commitment to addressing the piracy problem and recognise that new laws
have an important role to play in this. But persuasion not coercion is
the key to changing consumer behaviour as a heavy-handed, punitive
regime will simply alienate mainstream consumers. The
government should be ensuring a balance of action against repeat
infringers and the rapid development of new legitimate services that
provide a compelling alternative to illegal file-sharing" (FT)
"Internet provider TalkTalk said it would "strongly resist" government
attempts to oblige Internet service providers to act as Internet
police. TalkTalk said disconnecting alleged offenders "will be futile
given that it is relatively easy for determined filesharers to mask
their identity or their activity to avoid detection" (HuffPo)
One of my favorite quotes, via Labour MP Tom Watson: “Challenged by the revolutionary distribution mechanism that is the
internet, big publishers with their expensive marketing and PR
operations and big physical distribution networks, are seeing their
power and profits diminish. Faced with the choice of accepting this and
innovating, or attempting, King Canute-style, to stay the tide of
change, they’re choosing the latter option, and looking to Parliament
for help with some legislative sand bags” (FT)
Some important facts and other related snippets (quotes from various sources):
Proposed EU telecommunications legislation includes a clause stating that internet access is a fundamental human right (FT)
In Ireland, internet companies UPC and BT Ireland have refused to
comply with music companies’ requests to cut off suspected pirates (FT)
The Sunday Times claims that Lord Mandelson,
the business secretary, has been persuaded that pirates should be
deprived of internet access altogether after dining with “Hollywood
mogul” David Geffen *via FT (no surprise here, either;)
I have been saying this since 1999: the solution to illegal filesharing is to legalize the way that people share content online, to create new, public, compulsory licenses for content, starting with music (yes, just like the Radio / Broadcasting license), to create fair and flexible licensing standards, and to reduce control in favor of compensation.
The UK's trend towards increased criminalization is just plain old wrong, technologically absurd and utter fantasy, culturally 500% retro, and socially unjustifiable. Techdirt's Mike Masnick sums it up nicely: "You may kick people off the internet, but does anyone honestly think that will actually get people to buy again?"
Welcome to Content 0.0? I am in beautiful Sydney Australia for a keynote speech at AMBC, the Austral-Asian Music Business Conference; for a keynote on Music 2.0 and the Digital Music License tomorrow (August 21, 2009). AMBC is a great event and I am very happy to be here, but for the past 30 minutes we were subjected to one of the most bizarre, desperate and - sorry to be so frank - ...mad schemes of how to turn digital content into money on the Internet - and of all people, by one of the original Kazaa guys, Skype investor, and CEO of Altnet and Brilliant Entertainment, Kevin Bermeister. I have recorded some of his speech on my iPhone voice-memo recorder, and may make it available later, but here is, in a nutshell, what Kevin and his company, Altnet, seem to propose (and be sure to read their recent press release on the relaunch of Kazaa):
Put a Cisco 'Copyrouter' into the network of each ISP, everywhere
Have the Copyrouter (ouch... that word alone gives me the chills) look at all traffic that is based on or runs on certain P2P protocols, and define what's being shared via the unique hashtags that each file represents. Deep packet inspection... go!!!
Block all traffic with hashtags that have been flagged as 'unauthorized' (i.e.... all?), and replace them with files that are DRM'ed (yes... really) and that can be downloaded only if you allow a charge to be levied by your ISP.
I won't even attempt to delineate what I think is wrong with concept because there are so many issues that they would fill this blog for the next 30 days. But the mere fact that this kind of scheme is being presented in a keynote at a leading music industry conference is, frankly, making me feel quite hopeless on the future of digital music. But maybe I am wrong... you tell me (comment box below)
Anyway, first, Kevin seems to want all our traffic to be deep-packet inspected (i.e. monitored) so that a automatic determination of it being lawful or not-lawful can be made. That, in itself, is a bizarre and utterly unfeasible concept has already been rejected by the European Commission and almost all governments around the world (except for France), because it only points in one direction, and that is towards CHINA's version of the Internet. Police-states, Censorship and severe lack of freedom of expression and speech. Are you serious, Kevin? Is this what you want so that the major labels and studios can keep or shall I see regain total control over distribution of content rather than to license it to everyone, and share in revenues (as is, strangely enough, happening with Google and the record labels in China!)? I hope not.
Second, Kevin seems to want to have the illegal files (again.... that means all files, really) be automatically replaced with copy-protected files (did you think those were retired, too...?) that must be purchased by the user, via the ISP.
In other words, let's just re-insert Total Control back into the system, and force every Internet single user to a) pay whatever the price is (without having any say on that) b) use ONLY approved devices that can play back the DRM'ed content. If that's future of digital content... count me out (along with 98% of the online population I would say). Put that Content under the rock again!
This scheme is too painful even to just contemplate; I mean it's so far out that it hurts... so, over to you guys, for comments, please.
My final thought: this reminds me a lot of the recent Onion video ('Google Opt-out Village') that makes fun of how you can regain 100% of your privacy on Google. Watch it and make the connection;). More on this, soon. Update: Read GigaOm's take.
"Back in May, Rupert Murdoch said News Limited would start
charging users for access to sections of its online news content.
Is it a business model that will work, when web users have got used to
getting the news for free? In this edition of Twisted Wire we look into the user-pays model.
We might pay for content if it satisfies our specialist interests,
but are the major news publishers geared up to provide such a
wealth of content.."
Contributors:
Jack Matthews, CEO of Fairfax Digital
Peter Cox, principal of Cox media
Gerd Leonhard, futurist in the media, technology and communication industries
This is the Drop.io streaming version of my talk at Google San Francisco "The End of Control and the Future of Content", see my previous blog post for more details and the PDF. Bottom Lines: The fight for Control was
a fight for Distribution. The flight for Attention is a fight for
Trust. The beneficiaries of Control were Monopolies. The beneficiaries
of Trust are those that Collaborate. Advertising 2.0:
Information becomes Conversation. Interruption becomes Engagement.
Annoyance becomes Entertainment. 'This is an Ad' becomes 'This is
Content'....
The Youtube Video is here (unfortunately not in very good quality). Download the MP3
Update: a good comment by TelecomTV (Ian Scales) - I especially love their addendum to Spotify's logo: "Not Licensed to Kill" - great summary.
Before I get into the meat of this post, let me say this, for the record: I really like Spotify, the official new darlingamong the many on-demand streaming and interactive music services that try to go to the legitimate route and make deals with the rights-holders, ie. the record labels and the music publishers.
I like the Founders, I like some of their investors, I like what they are saying and how they do things. I even like their logo. We have met several times in the past - and something tells me Daniel et al may been reading my books and this blog, as well... all good this far.
So please note: this is not at all an attempt to rain on Spotify's well-deserved parade or discourage their investors. I am writing this post because I want Spotify to live, grow and prosper, not because I want it to crash. My comments, below, are simply meant to serve as a not-so-gentle reminder for a simple fact that we should keep in mind: while Spotify may look (or rather, sound) pretty, right now, no matter how hard they try and how much money they will raise, they cannot possibly succeed within the current music industry ecosystem, and they - by themselves - cannot possibly change that ecosystem single-handedly.
The primary reason for this is that there is no public (i.e. compulsory) license that is available for these kinds of services; therefore Spotify (and anyone else that streams music on-demand) has zero leverage whatsoever in the rights negotiations - and therefore, the entire pricing and overall economic model - with the record companies and publishers. In other words, they simply have to pay whatever it takes. And they are, indeed. Without a public license in place, this kind of situation is pretty much a suicide mission.
In my humble opinion, the chances of Spotify surviving beyond next 24 months, in the current music industry framework (call it '1.4' maybe - since we are still a long way from the Music 2.0 models that I and many of my readers and 'followers' have been discussing for the last, ouch... decade) are similar to... well, the likelihood of having a cold day in hell.
If Spotify - as a possible embodiment of those Music 2.0 concepts - is to live than the entire SYSTEM must be changed - no less, no more. If you like Spotify than this, below, is what you must ask for.
Spotify (and most other legal music ventures like it) won't survive unless:
A public, open, fully standardized, compulsory,multi-territorial and collective digital music licenseis agreed upon and instituted by law or by collective, voluntary action, SOON. Voluntary action seems highly unlikely at this point given the seriously monopolistic structure of the music industry, and the stellar 'my way or the highway'- track record of most industry bodies.
Just like the existing Radio and TV / Broadcasting licenses, such a Digital Music License will need to be a license that conclusively and pan-territorially (i.e. pan-EU, pan-Asia, US, and then, worldwide) regulates the basic commercial terms for the use of the master recordings and the underlying compositions for anyone that may want to offer or provide music online, regardless of whether it's streaming or downloading - because this decidedly 'Web 1.0' distinction is simply wishful thinking, going forward - access means copy, today. ISPs, search engines, social networks, telecoms, operators and Internet portals need to be able to avail themselves of a standard, ready-to-go license, just like anyone that starts a terrestrial radio station can use an existing license to calculate their music costs, today.
Anyone that has had the misfortune of wanting to 'do the right thing' and license music for any 'new media' i.e. online venture will agree with me on this: the current music rights licensing situation is nothing short of ridiculous, and to many outsiders the process feels like a cut & paste rendition of various "Twilight Zone" episodes. The ineffective and convoluted way that digital music rights are still being dealt with today is a disgrace that keeps causing continuous train-wrecks for anyone that wants to enter the business (and cares to do it legally), and the continuing inability of the industry's 'leaders' to solve these issues flies in the face of the massively increased consumer demand for digital music in all shapes and forms, across the globe.
I know... you may be ask: ok, yes that's not good, but if we were to license more efficiently...where's the new money? Here is my response, and I've said it many times: the problem is not that the 'people formerly known as consumers' don't want to pay for music - they just don't want to pay in those ways that the industry is currently asking them to. This is not a problem of total copyright disregard by the consumers - it's just a tollbooth-strategy question: provide real value and get real value - that is the only future there is! Maybe.. do what Google does?
But so far, all the music industry lobbying groups (e.g. the RIAA, the BPI, and the IFPI) and their brilliant lawyers have done is to ask Billions of people to change rather than consider changing, themselves, so that maybe they can actually start serving those people. Why is anyone still paying attention to these people?
Begging for mercy: Spotify's unenviable routine.
As a consequence of these stone-age business practices that prevail in the music industry, Spotify has to essentially jump off the cliff every time they license a new song, and beg to do things legally 24/7/365, i.e. beg for licenses, from each label and each publisher or rights society, in each country, every couple of months, and for every tiny change they make in their business model. For unlike Youtube/Google, Spotify has ZERO real leverage - while the international music conglomerates and legal rights-holders (reminder: not the artists!) have TOTAL CONTROL - if the deal is not to their liking they can just refuse a license thereby rendering Spotify either instantly illegal (i.e. unlicensed) or have their users evaporate quicker than you can spell 'dead'. There is simply no way that anyone can negotiate a win-win deal in a situation like this - especially when your potential deal partners have such a long history of using pre-Internet laws a weapon to kill competition and innovation.
This legal vacuum has led to a bizarre situation where the major record labels (as well as many large independents and / or their industry associations) can basically ask for anything - they simply have the exclusive rights for these recordings, so it's their way or the highway. The same goes for the publishers, and as long as refusal to license is a sustainable option this won't change (remember when the phone companies did not have to share access to their networks with other providers...?)
And you can bet we are not just talking money here - we are talking about having to give equity to the (large?) labels, for the mere pleasure of being legal, and for being mercifully allowed to reinvent how music is being monetized. This has not changed since the days of my own streaming music widget company, Sonific - you can read all about what happened to us, here. I have been there, done that, and this industry is STILL at the same place: the music licensing system is simply dysfunctional and the markets will NOT self-regulate. Vivan Reding and the EU Commission: are you listening?
There will be no real solution for this problem until the monopolies that currently serve as the foundation of the music rights society system in most countries (not in the U.S. btw!) are done away with; until pan-European or global licensing can be achieved via a one-stop, digital, fluid and transparent service platform. And just to preempt the obvious responses on this: when I say that the monopolies need to go I am not at all saying that these societies need to go. Absolutely not. However, if you base your very existence on the practice of merely extracting value rather than adding value I don't see how you could possible expect to have a role to play in a digitally networked future, either. So, while the concept of licensing collectives are and will remain crucial, they cannot be very useful in the digital economy unless they are constantly adding value and become 100% open and transparent. Monopolies just don't fit in this concept - or do they?
Back to Spotify: because they are enormously successful and popular right now, and because of all the other players in this turf that have paved the way and are still in the running (Last.fm, iMeem etc), and because of all the other players that tried and gave up (Yahoo Music, Musicload, MSN Music) or are about to give up (Napster, Rhapsody, MSFT), we need to make this issue a public, political, cultural and wider business issue.
We need music to be licensed for the Internet just like we license it for radio, today: with a public, open, collective and standardized license that does away with the monopolies of permission that have held us back for a decade, already.
I guess really this is POLITICS now - even the European Commission has already stated that "The failed music industry business model is causing online piracy" - so if you like Spotify it's time for action (hey - there's another post - but here is a preview of my 2 cents)
Finally, let me borrow some authority here: "Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. We are the change that we seek" (President Barack Obama)
The Google guys have just published a video with my talk at Authors@Google, in San Francisco, March 2, 2009 (see the details here Pdf: The End of Control Gerd Leonhard at Google SF PDF
*22MB). Due to some technical issues my fancy slides (i.e. the stuff on the screen) come across very nicely in this video while I am left a bit 'in the dark' - but if you use the HQ version on the Youtube site you can still get a much better idea of what my face actually looks like (I guess always wearing black is not ideal when the lights are bad;). Anyway, I do think this is one of my best talks, so... watch the entire 55 Mins 22 Secs. As far as the End of Control Book is concerned, I will have an announcement on my plans within the next 10 days...stay tuned.
Here is the official Google Talks description:The End of Control & The Future of Content: The tough
issue of control emerges, again and again, as the key contention point
within TV companies, publishers, record labels, and broadcasters: How
can a commercial venture that is based on so-called intellectual
property thrive and prosper in an environment that seems to
continuously and progressively remove control from the
creators/owners/providers of content, and hands it over to the people
formerly known as consumers (aka the users), effectively making them
more powerful every single day? But the reality is that every
click inadvertently makes another case for the consumers
ever-increasing rise in importance. Within all the conversations I have
had about things like commercial content versus shared content, about
the read-only or the read-write web, and about copyright versus Fair
Use, the crucial question always seems to boil down to WHERE IS THE
CONTROL HERE, i.e., questions such as Who will control this new media
universe and How much control do I need to run a revenue-generating
business?
I already blogged about the Youtube / PRS show-down (hey - that's a great word for this) in the UK, earlier today. After reading, twittering and talking to lots of 'real' people about this today, this is my conclusion: This conundrum is not Google's 'fault' but still: Google needs to really, materially and boldly get involved with facilitating the construction of a new content logic and economy, and lead content creators, owners and representatives into a new ecosystem that will actually work for all involved parties. Because it can.
Conflicts like Youtube vs. PRS are unavoidable because the canyon between Google - imho still pretty much the primary driver of Net-fueled innovation and disruption- and the content creators (never mind the industry) gets bigger by the minute. And, in my humble opinion, Google isn't doing nearly enough to explain this to them, and to guide them more conclusively into this new domain where content isn't always king, and where it won't matter if it is or not (if it ever did).
I talked about this in my speech at Authors@Google in SF last week; hopefully we will have that video available soon. The bottom line is that this will take deep, serious, multi-lateral, honest and open collaboration between these (and other) key constituents:
Content creators and the content industries (in that order;)
Telcos, ISPs, mobile operators and other telecommunications companies
Advertisers, brands, and their agencies
Social media and social networking platforms (of course all Internet companies, other search engines and portals)
Governments and governmental bodies
Welcome to a new Data Economy, a new Advertising Economy, and a New Content Economy.
Your turn, Google.
I will write more about this, but here's a quick illustration (thanks to Kevin Kelly for the power-lines & copy pic)
The UK / EU web is buzzing with the news that Youtube (Google) has started to block or remove UK music videos because they have not been able to strike a new music licensing deal with the PRS-For-Music, the UK rights society which represents the songwriters and the publishers. I particularly like the coverage of this issue by TelecomTV.com, here, but a lot more links to other coverage can be found below.
As is my habit, at times, I want to quote and comment. Before I get started, though, I want to point that obviously I don't know the terms of the license that were suggested by either Youtube or the PRS, so therefore I cannot comment on whether either one of them is realistic or not. I just know from my own experiences (among many others, with the now defunct - RIP - Sonific) and from many other deals that I have observed, that very often the respective proposals are 20-50x apart, i.e. one party may suggest 1 cent per stream while the other party wants 20-50 cents - mostly, simply because they can; after all, the rights holders enjoy the protection of having the exclusive rights to license their songs. I would not be surprised if that was the case, here (my exact guess is something like 10:1)
Anyway, here we go, from TelecomTV.com "Yesterday YouTube
announced that it was going to take down all the premium music content
currently available to UK YouTube users because it had failed to hammer
out a new licensing deal with the UK's Performing Rights Society (PRS)
for Music, a notoriously hard-line royalty collector. YouTube said the PRS wanted more royalty payment for each video view
than YouTube could ever make from the ads situated next to each"
My comment: this points to the root of the problem, right away. Any deal between the mighty Google and the still-trying-to-find-the-right-$-model Youtube and the rights-holders' representatives has to be about sharing the revenues that are actually achievable, in the market, here and today, and jointly building a system that can generate more and more revenues, tomorrow and beyond. Again, as Larry Lessig says, and as I have proudly annexed from him, it's about Compensation Not Control! To the PRS: NO, you cannot have both - and it looks like you just decided against Compensation???
Unfortunately, this detrimental mindset has become a default seeting: many if not most of the rights societies in the so-called developing world, and now apparently the PRS, too, have adopted one of these 2 strategies: a) if a potential licensee is still too small and economically insignificant to warrant their consideration, they will not offer any license at all, unless it neatly fits one of the existing templates b) if a potential licensee is large, juicy, popular and financially connected to an entity that seems to have verrrrry big pockets (see Last.fm, Myspace, Youtube, Facebook... maybe), they will ask for the moon and try take them to the cleaners. Even better if that entity has been previously in-breach of the existing licensing traditions and regulations - more leverage is always a good thing, right? Just study the mind-boggling story of my favorite web-radio service, Pandora. Never mind that this kind of 'it's my right and I will fully exploit it as I see fit' - thinking is also pretty much what has gotten us into this horrible economic crisis, as well - but that's another story.
None of this has anything to do with real, honest and open intention of building a mutually beneficial and future-oriented model, and everything to do with what I like to call Economic Egoism that is effectively set in stone i.e. law by some outmoded laws from over 20 years ago. As long as rights organizations -whose tasks it is to license music not to forbid its use - are pursuing this strategy we will not get to a point of 'peace' with all those new entities that clearly want to use, and pay for their music.
The PRS published a very revealing statement when Youtube announced their decision to play hard-ball and remove the music videos - here is the nugget: "Google had revenues of $5.7bn in the last quarter of 2008". What does that have to do with negotiating the fair and equitable licensing rates for music? PaidContent.org has some great comments on this issue, interviewing YouTuber Patrick Walker, including this one: "to suggest that, because Google’s a big company, we should just suck
it and pay a ridiculous rate is not something that we’re going to stand
by...it’s hard for new models to emerge when the starting point is a massive loss on a per-stream basis".
In fact, I believe that this kind of attitude from rights organizations, publishers and record labels will most certainly lead to government
intervention, sooner rather than later, since a dysfunctional market is not good for anyone - and clearly, this is what we have now, and it appears to be here to stay. I think... I have said it before:)
So here is my message to the PRSForMusic (as they are now called) and their members (hopefully they have a say in this, too): pleasssse get off this bizarre and decidedly Web 0.0 idea that Google should now be paying for everything that you think has been 'stolen' from you on the Internet. Instead, give YouTube a flexible, open, transparent and realistic license that gives everyone room and time to MUTUALLY develop this model, going forward. There is nothing to be gained by refusal! Start to cooperate rather than to try to dominate these conversations. COMPENSATION NOT CONTROL. And do it now, or have somebody else force you to.
Read: E-Commerce News: E-Commerce: Amazon: Only Copyright Holders Can Unzip Kindle's Lips. This is an interesting debate that once again shows that many rights holders will need some serious hand-holding when it's about understanding new technological implementations. I think this will be a major task, and very powerful if somewhat tedious opportunity, for the likes of Amazon, Google (Youtube), Yahoo and Facebook (yes... why? Stay tuned!) and very soon, the big agencies such as DDB, Ogilvy and Saatchi, as well as for all those Telecoms that want to play in the content & experience business (and which one does not?).
The creators and rights holders urgently need to understand and embrace the web-fueled paradigm of 'giving something' in return for 'getting something' - and the increasing empowerment of the people formerly known as consumers (aka the users) means that the creators will have to give more before they can get something back. Some people would call that the pressure of the Attention Economy - but this is the undeniable reality of the hyper-connected and mobile world we now live in, and it is not something we can switch on or off as we see fit. Ignore this trend at you own peril - witness the music industry's refusal to give more value before the purchase, and where it has taken them.
Now, Spotify, Last.fm, Myspace and iMeem provide free music on-demand, Hulu and Youtube provide free TV shows on-demand, Amazon and Google let people search-and-read-inside-the-book. And now the new Kindle will allow you to listen to a robotic voice rendition of a book - hardly a competition with the audio book, I would argue. In fact, this feature would probably drive people towards buying more audio books - free added values convert to sales based an getting better interfaces and higher quality. Sounds familiar?
This whole debate is very much like, years ago, the issue of Amazon's Search-Inside-The-Book feature. After a lot of deliberation, the publishers found out that the new feature really did increase sales (I think by something like 10%) and what's more, it got a lot of people 'addicted' to the book right there and then - which is usually the best way of snagging a new customer.
I think that Amazon should consider offering an additional, small monetary incentive to the publishers as well as some clever reporting on who is listening where (based on opt-in), and maybe even some promotional, highly targeted audio 'advertising' options to the participating book publishers, and thereby sweeten the deal.
But most importantly, the publishers need to start looking beyond their constant fears of cannibalization of existing revenues, and look at all these new options with less toxic assumptions (as social media expert and fellow bloggerati Neil Perkin likes to calls them). In addition, drastically lowering the price on digital books (the audio versions, too) would go a long way in boosting the take-up of electronic reading. And beyond that: what if you could use Kindle to have actual conversations with the readers - wouldn't that be a boon to writers and publishers?
The bottom line: switch to Openness and find new revenues. Now. Look at Nokia / Symbian, Firefox, Apache, Adobe, Android... Openness is tough but it always wins the users.
Ceck out this video on 'Compensation not Control' (MidemNet 2009)- this Lessig-inspired meme applies here, too!
"Norway's Telenor has rejected a demand from record label and movie studio trade groups that its ISP service block access to Sweden-based file-sharing hub The Pirate Bay, Billboard reported.
"Asking an ISP to control and assess what Internet users can and cannot download is just as wrong as asking the post office to open and read letters and decide what should and should not be delivered," the company said in a statement..."We comply with all relevant laws and
regulations and can see no legal basis for any ISP to act in the interests of
digital intellectual property rights holders by blocking individual
websites," said Ragnar Kaarhus, head of Telenor Norway"
I don't think PirateBay is defensible but it's good to see that someone can still lay it out like it is: controlling what people do with their Internet connection amounts to Censorship.
Read Zuck's post: Facebook | Governing the Facebook Service in an Open and Transparent Way. When Facebook changed their Terms of Use last week, making it look a lot more 'controlling', all hell broke loose. Even in Switzerland (where I live), the national TV news reported on the uproar that followed. Everyone hated Facebook's new ToUs and lots of
people were considering ditching their accounts. Even though their new ToUs did not surprise me, and I already consider everything I do on Facebook to be kind of 'in public domain' (under the Creative Commons license I use for pretty much anything), I do think that they way they have gone about this left a lot to be desired. Their brilliant and decidedly Web2.0 move was to immediately back-paddle and return to the old ToU - very smart, and something that probably got them extensive media coverage all over the world (hey - there's a lot more room to grow, from their measly 160 Million or so users;).
So Zuck wrote in this blog-post: "Our main goal at Facebook is to help make the world more open and
transparent. We believe that if we want to lead the world in this
direction, then we must set an example by running our service in this
way. And... we came to an interesting realization—that the conventional
business practices around a Terms of Use document are just too
restrictive to achieve these goals. We decided we needed to do things
differently and so we're going to develop new policies that will govern
our system from the ground up in an open and transparent way. Beginning today, we are giving you a greater opportunity to voice your opinion over how Facebook is governed"
Well-done. Sure sounds a lot like Facebook will be more like a 'Public Utility' ... kind of like the BBC, maybe? Now, there's another blog-post, right here!
But here is the key point, for me: It is now abundantly clear that the WE-THE USERS can control and influence what happens - not (just) the 'Network Owner' or 'Provider' or 'Media Company' or 'Studio' or 'Label' or "TV / Radio Network". If we-the-users, the people formerly known as consumers, don't like it, we'll leave, taking all our friends with us, deflating the platform's value very quickly - just imagine what would happen to Google if we pulled our trust from them. Control has now shifted to the Users - and that's a good thing.
This is,
of course, the topic of my next book (download some previews, here). More soon. Facebook ToU tag cloud by Flickr, AuntieP
Finally, here is the video and audio version of my presentation at MidemNet 2009, in Cannes France. I put a ton of work into this presentation and, well, honestly... I think it's one of the best I have ever done on this topic. Hope you enjoy it - and please comment, below, and / or spread the word! Thanks to the Midem organization for providing the DVD with this video.
The topics: why the
music industry needs to license the Internet just like it has licensed
Radio (i.e. with a collective license), why criminalizing the users
& fans will not work - and why those efforts should be re-directed to the creation of a new 'Music 2.0' ecosystem that actually produces growing revenues,
where those new revenues will come from, and how the music flat rate -
aka music like water - would work. See my previous blog post for more details and the PDF of this presentation. The MidemNet blog is here. My free book, Music 2.0, is here, btw;)
Keynote Speaker, Think-Tank Leader, Futurist, Author & Strategist, Idea Curator, some say Iconoclast | Heretic, CEO TheFuturesAgency, Visiting Prof FDC Brazil, Green Futurist
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