Last month, Mike Masnick invited me to do a guest-post on Techdirt.com one of my favorite online destinations. It went live last night and is getting quite a few comments - check it out here. Comments and discussion is here. Retweets are here.
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If I received a dollar
every time I get a question along the lines of "how can the content
industries compete with FREE?" -- I would be traveling first class
everywhere I go. Underneath this question I often find my favorite toxic
assumption: "less control over distribution means less money."
This belief is as tired
as it is poisonous: enforcing control (when trust is really what's
needed) will yield instant disengagement, which swiftly and surely will
translate into dwindling revenues -- as the music industry keeps proving
again and again. If you believe in control rather than value and trust,
the content business of the future is not a good hunting ground for
you.
Take eBooks: despite
clear and present proof that DRM has proven disastrous in selling
digital
music (and now is pretty much history), technical protection measures
are still being looked at to 'secure distribution'. When will
they ever learn?
The thinking that the
digital distribution of content must be controlled to achieve any kind
of reasonable payment is fundamentally flawed because of this
not-so-futuristic
realization: in our open, mobile, social and digitally networked
economy,
content publishers need to offer their goods in a way that no longer
centers on the distribution of units (digital or physical) as the key
revenue factor. The idea of just selling copies is toast - selling
(i.e. offering) access is where the money is.
Kevin Kelly said it years
ago: we must sell what can't
be copied, what's scarce, not what is ubiquitous.
The irrefutable trend
is that the window of opportunity of 'selling copies' (be it iTunes,
eMusic, the Kindle or the iPad) is rapidly closing. The real
opportunity,
the
TeleMedia
Future, is in selling access
and presenting a constant stream of up-sells (i.e. added values and
offering
content-related
experiences). Remember, as Mark McLaughlin so
righly
pointed
out in the HuffingtonPost recently, consumers have never
really
paid for content - they
paid for distribution! And now, distribution means Attention and Access.
Imagine when buying access
to eBooks, you wouldn't just pay for the authorized enjoyment of the
authors' words, but you would also gain instant access to highly curated
and socially-networked commentary, a fire-hose of meta-content provided
by your most important peers and friends that may also be reading these
books, and their ratings, explanations, slide-shows, images, links,
videos, cross-references -- and maybe even some direct connections with
the author or the publisher.
In an access-based, bundled
and cloud-centric content ecology, being a legitimate and authorized
user enables engagement, conversation, relevance, personalization,
meaning...
i.e. it unlocks really valuable benefits for the user.
Connect
with
Fans + Reasons to Buy (as has been mentioned on this blog a few
times,
before, I believe) - that's where the money is.
In music, streaming-on-demand
will without a doubt be available 'for free' (i.e. bundled and packaged
by 3rd parties) or advertising supported, while many added values
above
and beyond the mere reproduction of music will not - no matter
whether
WMG's
CEO Edgar Bronfman thinks
it's a good idea 'for the industry' or not.
Just imagine where an
access-to-the-cloud model could go next: if I want a high-definition
version of my favorite opera or that Blue Note Jazz Club concert from
last night I could buy a premium package that provides it. If I want
to share my personal play-lists, ratings and comments with my Facebook
friends, and get access to their content, as well, I can add the 'social
network option' to my package. If the price is right
(micro-transactions,
anyone...?), I'll buy - because I am already hooked on the music.
The music industry needs
to ask itself this question: if a permanent, unprotected download of
a song would cost only $0.10, or if an ad-supported version of a
on-demand,
all-you-can-eat music service would be seamlessly bundled into your
mobile phone subscription - would anyone still bother to scour the web
to find badly ripped, virus-laced tracks for free? Would we need
3-Strikes
or HADOPI or Digital Economy Bills?
Yes, I know, that price
point sounds ridiculous for those record label CEOs that used to sell
CDs for 15-25 Euros a piece, but hang on a second: if they can get 95%
of the users to
buy access at a much lower price (and almost
zero cost of duplication and distribution!), and in that process really
engage with them, the fans would also do the marketing for them - i.e.
share the links. Sounds like a great model to me. But of course:
selling
access at a much lower (or
feels-like-free) price to quite literally everyone
only makes
sense if it actually connects directly and smoothly to a multitude of
up-selling possibilities, such as interactive versions of eBooks,
high-definition
versions of online radio shows, albums or concerts, in-depth analysis
and audio/video commentary for news, etc.
Now, content storage
is starting to move from my own computer or my hard-drives into the
cloud - and I think this is very good news for content creators,
publishers
and rights-holders because it makes it even easier to engage and up-sell
to those
new
generatives. Crucially, the
answer to the constant quest of monetization is also in the cloud: I
believe most people will soon stop sharing the actual media files (since
they are getting increasingly larger and larger, and therefore more
unwieldy) and will share only the links, the bookmarks, the metadata
or the tags, and that should be a boon for the content industries.
The perfect test bed
for 'Media as a Service' (MaaS) may unfold soon, with Apple's new
iPad or Google's Tablet (hopefully). Extending the concepts mentioned
above, rather than blocking my wife or my kids from sharing an eBook
with me it would be much more logical if I could easily read her book,
as well; but beyond the 'copy of the words' all else would not be
available without a micro-transaction on my part, i.e. I would not have
instant access to the cool video clips, the updated links, the
footnotes,
the ratings, etc; i.e. all that valuable context that will make eBooks
so much more powerful would be out of my reach until I validate my own
access.
The bottom line: content
sharing isn't the real problem: high price points, outmoded, pre-web
toll-booth concepts, broken relationships and processes, low values
for high prices, bad technology and service, and utter lack of
conversation
and engagement are.
Here is my message to
publishers and content owners: lower the prices for access to your
content
to the point of unanimous excitement, use open standards and technology
platforms that work for everyone, everywhere; bundle and package as
attractively as you can (then: repeat). Team up with ISPs, mobile
operators,
advertisers and device makers.
Remove all the reasons
that your users may have to avoid your new toll-booths and skip the
desired conversion to 'paid' - the lower the hurdle for legitimate usage
and paid engagement, the higher the added values, the less you will
have to worry about 'competing with free'.
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a Comment..
With the explosive growth of the Internet, mobile devices and social networking, a connected world is indeed a very different world. Just witness the meteoric rise of YouTube, Facebook and Twitter, and the demise of the recorded music industry as we knew it. I would go so far as to argue the only reason advertising in its pre-Web 2.0 form (a global business worth approx. $400 billion per year) ever existed was simply because we were not yet truly connected as today's mobile, social and real-time Internet did not yet exist. 
DDB BlogStrategyNovember 8, 2010 
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