The price of freedom: Reinventing the online economy (RSA Journal July 2009)

I was delighted to be invited to make a contribution to the RSA Journal's July 2009 edition, the printed version of which was just send out I believe, and the online edition that just went up on their website.

The complete title of my piece is: "The price of freedom - reinventing the online economy: Gerd Leonhard explains why ‘free’ content can still pay in the long term" and I really enjoyed writing this for them.

Following my last presentation at the RSA, in April 2009, on 'The Future of Content and Creativity' I have had many good conversations about this topic. The audio track from this event is here, btw; and the video is embedded again, below. Enjoy. And RT;)

I definitely recommend that you check out the other great features in the Juy 09 RSA journal, as well, there's some great gems in there.

You can read the entire thing on the RSA page, so here is just an excerpt:

"Free information, free music, free content and free media have been the promises of the internet (r)evolution since the humble beginnings of the World Wide Web and the Netscape IPO on 9 August 1995. What started out as the cumbersome sharing of simple text, grainy images and seriously compressed MP3s via online bulletin boards has now spread out to every single segment of the content industry – and even into ‘meatspace’ (real-life) services such as car rentals. Without a doubt, ‘free’ has become the default expectation of the young web-empowered digital natives and now the older generations are jumping in, too.

On top of the already disruptive force of the good old computer-based Web1.0, we are witnessing a global shift to mobile internet – a WWW that is, finally, so easy to use that even my grandmother can do it. While five years ago, we needed a ‘real’ computer tethered to a bunch of wires to port ourselves to this other place called ‘online’ and partake in global content swapping, now we just need a simple smart phone and a basic data connection. With a single click of a button, we’re in business – or rather, in freeloading mode. 

As users, we love ‘free’; as creators, many of us have come to hate the very thought. When access is de facto ownership, how can we still sell copies of our creations? Will we be stuck playing gigs while our music circles the globe on social networks, or blogging (now: tweeting) our heart out without even a hint of real money coming our way?

Daunting as it may seem, we can no longer stick with the pillars of Content1.0, such as the so-called fixed mechanical rate that US music publishers are currently getting ‘per copy’ of a song ($0.091). Nobody knows what really defines a copy any longer when the web’s equivalent of a copy (the on-demand play of that song on digital networks) may be occurring hundreds of millions of times per day. No advertiser, no ISP and not even Google has this kind of money to pay the composer (or rather, the publisher), at least not until the advertisers start bringing at least 30–50 per cent of their global US$1 trillion marketing and advertising budgets to the table.

Traditional expectations and pre-internet licensing agreements are exactly what are holding up YouTube’s deals with the music rights organisations such as PRS and GEMA: this is what the rights organisations used to get paid for the music that is being copied, and this is what they want to get paid now. This impasse is causing significant friction in our media industries worldwide. Yet, below the top-line issue of money, there lurks an even more significant paradigm shift: the excruciating switch from a centralised system of domination and control to a new ecosystem based on open and collaborative models. This is the shift from monopolies and cartels to interconnected platforms where partnership and revenue sharing are standard procedures. In most countries, copyright law gives creators complete and unfettered control to say yes or no to the use of their work. Rights-holders have been able to rule the ecosystem and, accordingly, ‘my way or the highway’ has been the quintessential operating paradigm of most large content companies for the past 50 years.

Enter the internet: now the highway has become the road of choice for 95 per cent of the population, the attitude of increasing the price by playing hard to get is rendered utterly fruitless. Like it or not, a refusal to give permission for our content to be legally used because we just don’t like the terms (or the entity asking for a licence) will just be treated as ‘damage’ on the digital networks, and the traffic will simply route around it. The internet and its millions of clever ‘prosumers’, inventors and armies of collaborators will find a way to use our creations, anyway. Yes, we can sue Napster, Kazaa or The PirateBay and we can whack ever more moles as we go along. We can pay hundreds of millions of dollars to our lawyers and industry lobbyists – but none of this will help us to monetise what we create. The solution is not a clever legal move, and it’s not a technical trick (witness the disastrous use and now total demise of Digital Rights Management in digital music). The solution is in the creation of new business models and the adoption of a new economic logic that works for everyone; a logic that is based on collaboration, on co-engagement and on, dare we mention it, mutual trust – an ecosystem not an egosystem. Once we accept this, we can start to discover the tremendous possibilities that a networked content economy can bring to us.  

Free, feels-like-free and freemium

Much has been written on the persistent trend towards free content on the net. It is crucial that we distinguish between the different terms so that we can develop new revenue models around all of them. ‘Free’ means nobody gets paid in hard currency – content is given away in return for other considerations, such as a larger audience, viral marketing velocity or increased word of mouth (or mouse). I may be receiving payment in the form of attention, but that isn’t going to be very useful when it’s time to pay my rent or buy dinner for my kids. Free is... well, unpaid, in real-life terms.

 ‘Feels-like-free’, on the other hand, means that real money is being generated for the creators while their content is being consumed – but the user considers it free. The payment may be made (ie sponsored or facilitated) by a third party (such as Google’s recently launched free music offering in China, Top100.cn); it may be bundled (such as in Nokia’s innovative ‘Comes With Music’ offering, which bundles the music fee into the actual handsets) or the payment may be part of an existing social, technological or cultural infrastructure (such as cable TV or European broadcast licence fees) and therefore absorbed without much further thought. Feels-like-free could therefore be understood as a smart way to re-package what people will pay for, so that the pain of parting with their money is removed or somewhat lessened – everyone pays, somehow, but the consumption itself feels like a good deal...."     Read on.  PDF: Download RSA - The price of freedom Gerd Leonhard July 2009

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A key topic for 2009: EGOsystem becomes ECOsystem, yelling becomes talking, traditional Marketing...dies!

Image by gleonhard via Flickr

I touched upon this in my presentation at the Mobile Monday event in Amsterdam: I think we are going through a totally amazing and very challenging paradigm shift, right now (and this may still be a somewhat delayed consequence of the Internet (r)evolution and the first .com bubble): From EGO to ECO, from Control to Openness, from Domination to Collaboration. A few examples:

• The amazing shifts in U.S. policy and America's new global role: when President Obama implements his far-reaching plans to rewire how America works we will see this new trend towards win-win solutions rub-off everywhere else, too, and kick off chain-reactions in many other, traditionally more dominance-focused countries such as Russia, as well (and the reverse is also true). The old Bushinator mantra 'You lose - we win' has simply become unsustainable in today's networked economy, and America will doubtlessly struggle with this shift from domination to partnering for quite some time. However, I definitely anticipate a strong trend towards open systems and open platforms in the global economic and political spheres - as well as in technology and content / media - with utter transparency and TRUST becoming the key requirements for success, everywhere. There will no doubt be considerable debate on what this trend means for copyright and patent laws, globally, too, since these laws have traditionally been used for shoring up market-shares and protecting the interests of the large, dominant players in many industries.
• The music industry: the decline - or shall we say gradual vaporization - of most major record industry players due to their amazingly persistent obsession with control, makes a great case study. Rather than to finally permit new revenues to be co-developed via collaborating on win-win scenarios, the IFPI and RIAA are still looking for new enforcement and protection mechanisms such as the now flamed-out '3 strikes & out' legislation - it does make you wonder if their 'leaders' have lived under a rock for the past 5 years!  In any case, the music industry is the prime example why monopolistic and totally centralized structures will simply not work in the future, and why we need governme

  I

  nt intervention when a market place is clearly dysfunctional. Many of my readers know that I have been talking about this for a looooong time, but now we are finally seeing it take shape: the music rights organizations and their related content licensing processes will undergo significant and sweeping changes in the next 2-3 years; everything is moving from a 'not allowed / not possible' default mindset to a more collaborative, open, flexible, transparent and public rights licensing logic - and they must adapt or get out of the way. The bottom line: If it's not based on a web-centric and connected logic it will cease to exist. As an example, the current conflict between the Music Performing Rights Organizations (PROs and MROs) such as PRS, GEMA and Youtube is based on this basic paradigm disparity: PRS and GEMA are thinking of the music rights still being firmly and exclusively their business (i.e. an EgoSystem), and Youtube/Google think of music rights as being a crucial component of a new, 21st century content ecosystem that concerns everyone and should not be governed by monopolies and cartels.  Therefore, for Google I reckon that the music rights issue is  something that must go far beyond the traditional structure that's based on 'I own the rights, exclusively, and you'll need to pay whatever I ask for'. My prediction is that if the traditional rights-holders and the many societies that represent them don't materially change their thinking on this very soon, they may wall see a wide-spread revolt of their younger, more progressive members, because they know that not permitting the use of music on Youtube (and Google!) is simply a suicidal move, in terms of getting attention and building your brand. Get off the Ego and think Eco!
  

  Image by gleonhard via Flickr

• Microsoft's Windows OS is becoming less and less dominant (and relevant, too) as 'free' and cloud-based operating systems are gaining ground everywhere (Linux, Google)
• Most telcos, mobile operators and ICT companies are trying to switch from the traditional 'total control of the network, the infrastructure and the users' to open platforms as fast as they can (e.g. AT&T's open source plans, Skype's open Silk codec, Nokia's Open Symbian Foundation, Google's Android Mobile OS)
• In software, the continuing trend towards open-source and crowd-sourcing is clearly visible everywhere (e.g. the huge success of Firefox vs IE, and the rise of open-source DMBS)
• Many large corporations are starting to move into crowd-sourcing, wanting to pursue increased openness in return for a chance to realize network-economy benefits. E.g. Glaxo Smith Kline's recent move to release a huge amount of cancer research data into public domain (Note: in this context, I highly recommend Yochai Benkler's fantastic book "The Weath of Networks")
• The mind-boggling popularity and global success of API-driven web portals and platforms (Twitter's amazing growth, Friendfeed, the new Facebook 'River', widgets, the UK Guardian's open API etc)
• For many large companies as well as for SMEs (small medium size enterprises),  Social Media is quickly becoming CRM (customer relationship management) - rather than running expensive ads that talk about 'Me' and how great the new product is (i.e. Ego), the switch to 'having conversations with the customers aka users' is visible everywhere: Ford's new Fiesta campaign, Kraft's cool iPhone app. Brands can no longer be just BIG EGOs - they are part of Ecosystems, too.
• In Advertising, the entire paradigm of 'we'll yell until you listen' is finished - this concept was all about the Ego of the brands, and about us, the people formerly known as consumers, listening. Now it's all about the Ecosystem: Do you come recommended?  Who trusts you? What makes you worthy of my consideration? Why should I pay attention to you? Who vouches for you? Who has told me about you? Are you open and transparent? Here, too, Egosystem has become Ecosystem, and a Trillion $ industry is changing as a consequence - from Push to Pull, from Yelling to Talking / Listening. Tough gig but... a gold mine if you can make it  ;)

 

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The Future of Content & Creativity: my presentation at the RSA in London (April 8)

Here is the PDF (incl. some slides I did not actually get to show due to time restraints;) of my presentation at the RSA: download Future of Content and Creativity Gerd Leonhard at RSA London PDF 16MB

About the event (tweets here)

"The internet is radically disrupting most of the traditional content distribution and selling models, starting with music and games, followed by TV, film, books and print publishing. Once everyone is always-on, mobile and hyper-connected, and everything is available everywhere, how will content be created, distributed, marketed, consumed, and paid for? Who will do what, for whom, and how will the traditional players such as broadcasters, record labels, publishers and distributors adapt? If new players, starting with telecoms, device makers, advertisers and brands, indeed move into the content business, what will be their challenges and opportunities?

Given the challenging financial climate, how do we reconcile the need to reward enterprise and secure sustainable revenue streams, with the expectations and demands of the “freeconomics” generation? What kind of legal, regulatory and cultural framework do we need to ensure that this new eco-system of creators, consumers and intermediaries generates more benefits for all involved?

Speakers: Gerd Leonhard, media futurist, author and blogger; Richard Titus, Controller of Future Media, Audio, Music & Mobile, BBC; David A. Smith, chief executive of Global Futures and Foresight (GFF).
Chair: Ralph Simon, CEO, The Mobilium Advisory Group and Chairman Emeritus & Founder, Mobile Entertainment Forum - Americas.

 Suggested hashtag for Twitter users: #rsamedia

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RSA London: The Future Of Content And Creativity Gerd Leonhard @RSA London March 2009

View more presentations from Gerd Leonhard.

Marc Andreessen: "Not allowing your content to be used is entirely the wrong strategy" Me: IP Gridlock must end

Image via CrunchBase

Cross-posted from MidemNet blog (March 14)

I just finished watching a great Charlie Rose interview with the amazing Marc Andreessen (Founder of Netscape, now Founder of white-label social network platform Ning, among many other things). Marc is one the brightest people in this turf, and I definitely recommend that you check out what he has to say about the Future of Newspapers, and the Content / Technology space in general (Charlie Rose show link).

In the interview (see my short, slightly time-warped but still crucial excerpt below), Marc talks about the urgent need for all content to be blessed with an ok-to-use-license on social networks and social media. I totally agree with Marc on his key message: nothing can be achieved by removing your content, or by making the legitimate use of content so incredibly expensive and complicated that few companies can actually afford it.  Recent examples abound: WMG and Youtube, Youtube & the PRS, Amazon's Kindle2 versus the Authors Guild, Pandora's difficulties outside of the U.S., CBS and Boxee, my very own Sonific.com ... and the list goes on. When content is removed from sites that deliver audiences of 200 Million+, then it's the creators and the users that lose, flat-out - no buts and ifs. Why do you think Facebook (which is starting to drive traffic in exceedingly huge numbers) does not have a music or video service? You guessed it: there is no reasonable deal to be had with the representatives of the music, film, and TV companies.

In my opinion, we currently have a severe IP-Gridlock situation: content creators, owners and their representatives (and these are very often more of a problem than the actual creators, in my experience) are still basing their monetizing strategies on scarcity, on the right to refuse the deal, and on 50-year old copyright laws, regulations and traditions. These laws - as crucial as they were back then - afford the rights-owner the exclusive right to say yes or no to pretty much any kind of new Internet-based use of their music, films or TV shows, and therefore a common misconception is that - as it has been for the past 50+ years - more control actually equals more income. And it kind-of did - back in those days when refusal could sometimes be a very effective way of enforcing a higher payment.

Well, this was then, and the future is... already here. Adhering to this strategy of refusal and monetary revenge ('now that you're a big company we'll take all we can get', see Youtube vs PRS) is a huge mistake and will beyond a shadow of doubt devalue your content very quickly, in the next 2-5 years (depending on your specific domain).

In music, this pivot point has already been reached: if your content is not available (i.e. findable and listenable) on Last.fm, Youtube, Myspace, Spotify, Facebook, QQ and so on, it quite simply won't exist for the 1.5 Billion Internet users and the soon-to-be-online 3.5 Billion mobile phone users. That means you are losing out on reaching a huge audience, and on doing so in the most cost-effective ways. It means that new routes to monetizing - those so-called new generatives- cannot be tried and co-invented. It means that innovative and honest entrepreneurs are stifled and silenced while your content is still being dished up in other places, for free, anyway, and without your permission. It means that all the mad mole-whacking won't get you paid - it's just the lawyers that make a good living this way. It means that a new ecosystem cannot emerge because you are still insisting on doing business like it was done 20 years ago: with large advances, completely under your exclusive control, your way... or the highway.

So here is a wake-up call if you're still thinking that blocking the use of your content will get you more money: it simply won't work. Period. You can't fax a cat. Really.

As to the music business (recorded and publishing), this much is obvious: either the industry will start to dial back on Economic Egoism and their obsession with Total Control, or 4 Billion Internet users will simply route around them like a river routes around a rock. To make matters worse, governments will certainly step in to force an end to a clearly dysfunctional system that criminalizes 100s of millions of people while returning zero new revenues to the creators.

What will work is COLLABORATION, Trust and Mutual Respect in defining the new ways of how $$$$ can be generated for content creators - and there are plenty, once we question our  outdated assumptions.

Lastly, kudos to some companies and organizations that seem to be heading in a more positive direction:

• the new Featured Artists Coalition refused to be part of any scheme that penalizes Internet users
• the UK Guardian has launched an open API that makes all of its content available for 3rd parties

Need more food for thought? Watch my video from MidemNet 2009 "Compensation not Control" (pdf, too).
And: TALK BACK!

 Discover Simple, Private Sharing at Drop.io

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The Printing Press brought us Copyright, the Internet brings... Usage Right!

I think creators now need to get paid for the USE of their work, not (just) for a copy. On the web, everything is a copy, every listen / watch / read / use is in fact a copy; computers are simply copy machines by default. If creators and rights-holders stick to the old definition of 'copy' and the corresponding, unit-based mode of how they used to get paid (e.g. the mechanical license for each download of a song), then we will continue to have a total mismatch between what 1.4 Billion Internet and the converging ~ 4 Billion mobile phone users are willing and / or able to pay, resulting in a drastic loss of revenues that could be harvested via revenue sharing, bundling and other collaborative, usage-based models. Check out the slideshow below. More on what I call "21st Century Content Economics" later today - I will publish a PDF with my Authors@Google presentation I am doing in San Francisco, today.

Copyright 2.0 and the Future of Music Gerd Leonhard Norway Think Tank June 2008

View more presentations from Gerd Leonhard. (tags: copyright immf)

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Time for action: the music industry needs the same CHANGE that Obama brings to America (MIDEM 09 thoughts from 'the Utopian')

Image by gleonhard via Flickr

Everyone that follows my work knows what my message to the music industry has been, for the past 10 years: Change. Embrace technology and empower the User. Make the Artists Partners. Give Permission. Collaborate. Innovate constantly. Get out of your own way. Compensation not Control.

Until a few years ago, to talk about transparency, equality and collaboration was considered treason and people looked at me with deep pity when I suggested a radio-like license for music on the Net. Today, the concept of blanket licensing music on the Net (no, not a tax, but a strong, open ecosystem that generates many new revenue streams) has become a solid contender for a new - and much larger - music ecosystem that is being put together as we speak.

For the last 8 years, trying to control digital music (DRM, CD protection, broadcast flags etc) has brought the music industry a fundamental and detrimental crisis, war (on file-sharers), value destruction, squashed innovations, and lost trust on all sides - artists, consumers, telecoms and brands! Well done, musical Bushs.

WHEN will the industry switch horses like America switched from Bush to Obama, from destruction to innovation, from money-just-for-us to money-for-all, from control to collaboration, from prejudice to openness, from broadcast to conversation...?  Isn't it time that we leave those professional lobbyists and purveyors of costly snake-oils behind, that we hand the wheel to the new guys, the ones that understand what music & a life around music is really like, outside of their bubble and above and beyond their severely limited assumptions?  Isn't time for the lesser-privileged minorities (such as the actual creators, and such as those that are not from the so-called Western world) to step in and catalyze those changes?  Where is the Obama for the music industry?

Here in Cannes, France, at the annual MIDEM music industry conference, we have once again debated and contemplated (and wined and dined and smoked) for the last 5 days. We have noticed some 15-20% less attendance, empty restaurants and much-less-than-usual action in the exhibition halls - the music industry as we knew it is OVER. And good riddance. The organizers tried hard (and did well!) but you have to wonder: what are you (the industry) waiting for? Is it not time to VOTE FOR SERIOUS CHANGE in the music industry, and make that switch to an open, collaborative and mutually fruitful ecosystem? Like... now?

Your thoughts?  Obama Player Link

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Compensation not Control: Music 2.0 (my presentation at the MidemNet event in Cannes)

Compensation not Control Futurist Gerd Leonhard at MidemNet 2009 by gleonhard

Update here

If you were at my MidemNet presentation in Cannes / France, today... here it are my slides (I will add more details later... it's 2.30 am now ;). Hopefully MIDEM will make the entire video available soon, as well. Be sure  to check the MidemNet blog for updates (and the Kyte channel! 3MB PDF: Compensation not Control Music 2.0 Gerd LeonhardMIDEMNet 2009 low res

High resolution version viewing and downloading via Slideshare:

Compensation Not Control Music 2.0 Gerd Leonhard Midem Net 2009.Key

View SlideShare presentation or Upload your own. (tags: isps leonhard)

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Open Really is King - especially now!

Update: this news just came in -what a great fit!   Genachowski Likely to Champion Openness as FCC Chief (ECommerce Times)   Open source was on a roll in 2008, already, but in the 'Crisis & Change Year' 2009 I think we will finally witness the obvious superiority of open systems (and not just in software). Here are some of the trends I see:

• The use of open source technologies for databases will continue to increase dramatically (see this cNet column); in a down economy this is of course not surprising
• Open source mobile OSs (such as Symbian and Android) will continue to gain market-share over Windows Mobile and others, simply because they offer a much superior speed of development
• Apple's iTunes DRM has just been dropped - and now watch what will happen elsewhere! Having said that, Apple is of course not known for their openness (to put it mildly) - but my hunch is that they will start getting off the control button this year, as well.
• Mozilla's Firefox already has over 20% market-share, and Google Chrome is gearing up, as well
• I predict that Facebook will be making radical strides to be more open, this year (see below); partly to compete with Google Connect
• A key embodiment of OPEN - the 'API Culture' - is seriously booming (I think Twitter alone has over 300 services based on their API), and this will only increase in 2009
• Cloud computing is on the rise, everywhere - and open systems are a must for many of these applications
• Mobile networks are slowly being forced to get off on their walled-garden approaches (even though the U.S. is lacking behind in this process, see below)
• "Permission and revenue sharing rather than legal action" seems to be a trend that we can clearly see in online video, for 2009. Witness Youtube, where rather than constantly asking for take-downs, the major TV networks are starting to go for revenue shares, instead (while Warner Music Group is now removing their music videos, bizarrely - another proof that some of the major music companies are heading for the cliff at the highest possible speed?)
• Print media is getting a lot more open about syndication, full-length feeds and integrating pro-am creators such as bloggers (see my action items, here). The NYT is certainly moving in the right direction here

Related stuff:

* the essential choice we all face: openness vs control (Jeff Jarvis in the Guardian)  "That is the nature of the Google economy. I call it the law of open networks: the more open a network is, the more control there is at the edges, the more the edges value the network, the more the network is worth. Bottom line: if you want to exploit the network that is the internet, you can't try to control it. That is the network paradox..."

* Wireless networks in the U.S. still not open (Business Week) "Openness and Revenues Will Go Together. So can we ever get to openness? Yes. But it will take a while. Market forces are pushing theImage by gleonhard via Flickr carriers toward more openness. (Who would have thought even three or four years ago that we would ever have carriers endorse the concept of open networks?) It's likely that the best chance we have for truly open networks will come in the next three to five years as the next generation of 4G networks (LTE, WiMAX) are widely deployed. The advent of new device types (not just smartphones, but also Mobile Internet Devices and netbooks) will require a reevaluation of carrier testing and certification processes as well. Carriers will eventually be forced to abandon their current "open but highly controlled" philosophy...."

* Techdirt's Mike Masnick on Openness: underestimating the importance and overestimating the dangers: "Closed systems tend to look more elegant at first -- and often they are much more elegant at first. But open systems adapt, change and grow at a much faster rate, and almost always overtake closed systems, over time. And, once they overtake the closed systems, almost nothing will allow them to go back..."

Gerd Leonhard Futurist At Jakarta Broadband Summit "Open is King - The Future of Media

View SlideShare presentation or Upload your own. (tags: social media social networking)

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Pirates Prisons Project: watch these videos, have a good laugh, and then... think again)

Go to PiratesPrisons.com

Great read on "Intellectual Property and new Copyright Law" with some nice Media Futurist -ic Quotes (via Japaninc.com)

This is a must read: Intellectual Property and new Copyright Law | Japan -- Business People Technology | www.japaninc.com.  Best snippets:

"But are things really that dire? Some would argue that these industries are healthier now than they ever have been. With the spread of information at a never before seen level, pieces of journalism are being read more now than ever, music artists are able to reach a broader audience than ever (some by bypassing the record labels all-together), and movies are being watched by more people in more countries..."

"The issue is control, and the embodiment of that control is copyright. The music industry is perhaps most illustrative of the issue..."

"Currently in Japan, new copyright laws are being debated which could make average users subject to civil law suits from record labels or movie distribution companies. Within the walls of mega-forum 2-Channel and the Japanese blogosphere, debate has been raging over the laws and what they will mean exactly for the average user. Specifically the outright banning of illegal downloads—music, movies and games being the main points of interest—is currently being investigated by a sub-committee appointed by the central government. Presently, Japan’s copyright law makes an exception in the case of downloads for personal use..."

"The industry veteran [IFPI's John Kennedy] says he believes a large increase in resources will not be needed to govern the Internet—warnings and enforcements will just need to be carried out in a similar way to any other law. “People call the Internet an ‘Information Super Highway.’ Well like any normal highway, it can be governed. If someone is speeding you give them a ticket and in extreme cases you take away their license.” But how about finding them? “People sit in their rooms and think they are anonymous but they are not—their IP address says exactly who they are,” says Kennedy..."

"Media futurist Gerd Leonhard [Me] says that in a globally networked world, with an expected 3.5 billion mobile users and Internet speeds increasing exponentially within the next two to four years, the traditional Western concept of exclusive copyright must be reviewed. “It is the purpose of copyright to generate sustainable and growing revenues for the creators, not to prevent new uses of their works that may eventually result in those new incomes. He believes that in the future, “many of these models will be more like flat-rated or bundled access models, rather than unit-sales based models.”

***"A recent case involving Google may help provide a blueprint for content creators. In October, Google settled a dispute with authors and publishers over its scanning of 7 million books for digital versions of printed material. The company paid $125 million to publishers and authors and will, from now on, provide a percentage share of the profits from ads and downloading fees. Under the agreement, Google would receive 37 percent of revenue while publishers and authors would get the rest. The settlement could pave the way for similar agreements within other industries..."

"Ito continues, “While it is important to protect copyright and the incentives that copyright (and intellectual property) provide, it is important that we do not prevent many of the basic things that people want to do with content or prevent some of the potential new ways that people will be expressing themselves and sharing this expression.”

"Futurist Leonhard says the key to making money in a post super-connected world is to embrace the concept of losing control. He believes that “a continued loss of control over IP and copyright and most other measures of restrictions is absolutely inevitable; and in fact, the less control we will have the more new revenues will surface.” Leonhard believes that “The future of creativity, content and media is bright, as it is the human creativity and its embodiments that will be even more valuable in a world of ubiquitous access and huge growth of output. It is the value and dollar system and logic that we need to rebuild and adapt—and the law is, of course, there to support this, and will therefore be adapted. This process is not new, just more drastic since the Web is often removing many old ways to get money out of scarcity while not yet offering the same profit in a plausible new way yet. This new logic needs more than 3 percent of the global population on broadband, and always-on, to generate increasing revenues from those new ideas. Another 24 months and we should have a much better take on this.”

This is really well-written and nicely researched, balanced column by Michael Condon - kudos!

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The Permission Problem & the Anti-Commons (via James Surowiecki in The New Yorker)

Surowiecki, famed author of 'The Wisdom of Crowds' (which is a great read btw), has published a column in The New Yorker which is well worth reading, as it covers the issues that arise from too much, too deep and too long patent and copyright legislation. Here are some high-lights, below.

A great example of why it does not always work to rely solely on market forces to work it out (yes... such as in music licenses for Radio, and now, the Media / Content Industries and the Internet - the still-prevailing mindset of economic egoism just does not make it possible to reach a win-win-win situation): 

"In the second decade of the twentieth century, it was almost impossible to build an airplane in the United States. That was the result of a chaotic legal battle among the dozens of companies—including one owned by Orville Wright—that held patents on the various components that made a plane go. No one could manufacture aircraft without fear of being hauled into court. The First World War got the industry started again, because Congress realized that something needed to be done to get planes in the air. It created a “patent pool,” putting all the aircraft patents under the control of a new association and letting manufacturers license them for a fee. Had Congress not stepped in, we might still be flying around in blimps...."

"The commons leads to overuse and destruction; the anticommons leads to underuse and waste. In the cultural sphere, ever tighter restrictions on copyright and fair use limit artists’ abilities to sample and build on older works of art..." Comment: more on copyright & control here

"In theory, one should be able to break a gridlock by striking a deal that would leave all sides better off. Sometimes that happens. Just the other week, for instance, Nokia and Qualcomm settled a three-year-long patent battle, which could accelerate the spread of third-generation cell-phone technology here and in Europe. In a less contentious fashion, products like the DVD player quickly became mainstream and affordable because many companies worked together to form patent pools..."

Comment: this is where the real problem lies that bedevils the creation of the new, connected, web-native economy (in my view):

"Recent experimental work by the psychologist Sven Vanneste and the legal scholar Ben Depoorter helps explain why. When something you own is necessary to the success of a venture, even if its contribution is small, you’ll tend to ask for an amount close to the full value of the venture. And since everyone in your position also thinks he deserves a huge sum, the venture quickly becomes unviable. So the next time we start handing out new ownership rights—whether via patents or copyright or privatization schemes—we’d better try to weigh all the good things that won’t happen as a result. Otherwise, we won’t know what we’ve been missing..."

Comment: The key question is whether we can still afford to act like this. Do we still extract the maximum cash out of a deal just because we can, do we still exploit natural resources just because we (in theory) can, and do we still pound on copyright rules just because we (by virtue of some rather antiquated laws) can?