The human impulse to share information of all kinds includes sharing content as we explore the new human invention of the digital environment. People are attracted to expansive spaces and that media's front lawn is being trampled in the broad social rush is only a symptom of the importance of this trend. The only things that can fix this business development is more ground breaking technology or new approaches that create incremental value for the consumer of content (ie. new business models). Absent the development of being able to broadly protect content using technology, this issue will define the next decade (or two). In the meantime, players in business will either be very flexible in their business models or they will be naturally selected for extinction. This can be made obvious when you see the true social trending priorities in these developments.
This post is intended as a limited update on a longer discussion about trends in media in the US. It is based on a new wrinkle published today in papers worldwide about a judge's decision to expose You Tube's customer privacy in order to demonstrate Google is somehow negligent for Viacom's own shortcoming. And while it sounds like I am taking a definitive position, it was only a few years ago this position would not have been necessary because technology to share was harder to come by.....and history shows how technology changes the world. Fighting this truth is like spitting into the wind. In the same way we might stop to consider our very freedoms on a day like today (7/4), we should consider the responsibility that comes along with that freedom. Is protecting the ideas and work of others essential to freedom? What if those ideas are now easily reproduced? Is it worth less? Is the responsibility to protect their ideas now less than before? What's a story in the newspaper worth? What's a song worth? What's a current movie worth? Is it worth less on a cell phone screen than in a theater? How about a book? What if it took a long time to produce? What if it took five weeks but was based on years of experience? This sounds very difficult to do but the market will always give you an answer. The market is always responsive to such matters if we listen. It also can be shown that the market for shared human values changes with social mood. Join me for the rest of this short discussion. It matters, no matter what kind of business you are in: Dave
The title of this post is really about how perpetual ownership and the value of Intellectual Property (IP) is being challenged in the new digital social realm by technology and generational changeover <in attitudes> and resulting in a deflationary force not yet willingly recognized by the enterprises that create content. Ideas are going to be worth less, in fact, they already are. This is not some ridiculous argument. Viacom now has a court looking at sensitive customer use data to see if Google's You Tube is primarily making money off Viacom's illegally placed content, then Google is somehow complicit and therefore, liable to protect that which the owner cannot protect for themselves. Imagine that for a minute. It was made for broadcast, was in fact broadcast, and now that everyone has shared the creativity it is willingly depicted as proprietary still even though it already lives in people's minds. In the digital realm they cannot protect their own work so they are suing the company most responsible for giving consumers <exactly what they want> Choice, by allowing them to easily find exactly what is already out there and what they want. The very fact that technology now allows us to share everything and sharing is a natural human impulsive behavior, then trying to make us conform to the needs of business becomes obviously ridiculous. Of course it is easy to make an argument for protecting the content to but my point is simple; This type of disagreement is exactly what we should expect a lot of as the generational guard begins to turn over......planned or unplanned revisions to the existing social contracts. Some generational turnover is more tumultuous than others. This is going to be a big one, for a lot of reasons.
John Malone was interviewed this week (CNBC link for interview) and pointed out bluntly that the business model will be what it is today in media until something else is found to work. He is arguably the most connected mind in media in the US and he is right, up to a point, from this perspective. The business model can break down just as it is beginning to right now because the social contract is essentially unenforceable when you look beyond the generational divide. Social contracts to behave a certain way are rarely enforcible when tested on such a mass scale as now beginning. Sure, a few headlines are possible that serve to warn but, they really tell us increasingly is how something important is out of balance. Business is a tool that serves people no matter who's money is behind the business. When what is on offer is no longer appreciated in the way it was when the business began, it is business, and not people, that must change. Blaming this dysfunction on kid-like and criminal behavior is short sighted and wrong from a multi-generational perspective. Malone's interview is a steady look at the circumstances. The social contract that says content is intellectual property (IP) and that it is protected perpetually works no better when confronting the basic human impulse to share than did land rights registered in far away courts against open range cattle grazing on private property. Fences were built by the owners of the land because it was the only way to protect what each needed for their own assets. This analogy is very purposeful in this case because of the nature of the digital environment. If you advertise the fact that your grass is getting eaten for free, more "thieves" will come for the free grass. Ownership must be enforcible outside of courts in the social realm, or it will not hold up. We are social animals by nature and we share. Period. If technology advancements allow for sharing, we will. We are. That we were collectively denied of consumer Choice for our media consumption for the first seven or eight decades of socially using media, this current technology and the change in social mood is destroying the social contract that does not serve our true needs...and is best seen being precipitated by a secular kind of change (really long term forces) John Malone can talk about the business of content requiring a successful business model in order for high quality content to be produced, but the recent addition of social media styled content to the total inventory of content available is placing glacial-like pressure for the pricing of all content to change. Choice, what the consumer of media wants, is paramount. Of course good content will not get produced if it is not somehow made profitable but the real question being decided is, just how much is fair? Few are willing to openly acknowledge this dynamic. It is the only one that matters since we consume more and more content these days. The key is to give it to them (content consumers) just as they want it and charge a fair price at the same time. It is possible. It must be, because, again, we collectively consume more media now than before. Anyone saying otherwise is simply complaining it is not easy. Perpetual ownership of already shared content is not realistic in a digital environment or the courts will be bogged down for a century. This point will be the eventual nexus of compromise that will open up a growth phase for content production and consumption. In the meantime, there is a long social correction in the way.
To me, the only key behavioral traits left to exploit is our connections to convenience and sociability, and that is the big clue to how to do it.
Producers of content must provide convenience in terms of timing and modality in order to charge a fair rate for content, or it will be "shared" illegally. This was my argument last year seeing this through social mood and its more clear now. Media should be available by different modality and stay in that modality (channel) and be purchased that way incrementally. You want the WSJ paper in the AM?, great. That is one product. You want the web site? That is another. You want it on both your PDA and PC....those are two products, not one. Sounds difficult? This is the new infrastructure or channels of programming content and it must be developed this way in order to capture value. Content is best viewed as functional by specific use. Making it generic harms the value proposition in an age when value is the main question. My original argument a year ago to Sumner Redstone's initial suit was that some of his most stolen shared content is obviously mis-priced by seeing the economics. Why it is mis-priced is more clear today than ever. The same social forces that over took the US during the industrial revolution are back and as benevolent as ever...(to the next generation). Specialization through collaboration is necessary to get people and business better at sharing information. We've begun this detailed dance without any prodding. Again, sharing and organizing is very natural to social animals. Next, Choice is now the important (smaller) trend spurring this leg of the Information age (begun 30 or 40 centuries ago). Social mood sees to it that each small leg of this human trending process is characterized by specific kinds of patterns. Each of these correspond to the current developing social mood. All of this matters to enterprises that produce content and especially marketers in that process. Yea, it is very big picture but if you do not understand the shape of the overall trend then seeing what is next is more of a guessing game.
One actionable irony is that the very technology helping consumers share content will be the means content producers use to become better marketers or content. Social media. It is not just a fad. What appears to playful activity for younger kids is really purposeful social ordering. Socially organizing the digital realm is the first step to colonizing it and making it more useful. It may seem lawless to some content producers but it is based on highly structured social rules. (This is the part the older generation does not like to acknowledge because it is what will make the Boomers really begin to feel old (out of touch) and that is not likely to be a good thing initially.)
Part and parcel of my argument here is that in order to specialize and refine production, cost basis, and distribution skills in these new formats, the business of producing and selling content will have to split on an axis not previous considered. Content producers must become more efficient. Distributors of content must make it readily available in multi-modal forms <on demand> and with great ease. How will privacy be protected in this digital realm? Will there ever be true privacy? Since a new era of regulation is now developing, will we resist the temptation to let big brother govern a business <internet commerce> he clearly has no clear qualifications to run? Will fear of uncertainty force us there? I hope not but it is an outcome which must be guarded against. Again, it is all about providing the consumer Choice, not just a few options. We must remember this about the digital realm or risk greater social turmoil. This is not so much an opinion as a distillation of facts of what large crowds of people do. The true utility of the digital environment is how different people use it. If we dictate how creativity is to be applied in the digital realm, we will stifle innovation and the incremental utility of the tool. That will be bad for everyone, not just a few big businesses. Government must be made to realize this point and focus upon defining freshness dates, and attribution requirements for content. The creator of content should be acknowledged. If it is not protect-able, it should be allowed a period of exclusivity. This requires social agreement, not decrees by old people, telling young people what to do.
If your business is anywhere in the chain of production-consumption of content, your enterprise must adapt quickly to multi-modal format utilization and a new industry hierarchy that must develop in order to better monetize content. Many old players will not survive the necessary innovation and cost control. Innovation requires risk taking and a willingness to fail. Big organizations are not equipped to do that well. Expect small companies to first see the next generation business models based on the individual consumer and not aggregating masses for ratings points.
The irony now is that the question -how to price content?- is not going to be based on what businesses think is reasonable markup of their costs but, what the market is willing to bear. How many sponsorship mentions will viewers/listeners allow? How much will people pay for content without sponsorship that is not free? How much is each modality convenience worth? What will it take for media businesses to forget how it was done in the first seven decades and based their new way of doing business on what the market now wants? What makes sense in this new era? What makes sense to me is Choice delivered by multiple modes of using the same content....in as many ways as the customer wants and knowing what the customer wants is a matter for marketers....in two separate businesses....one that specializes in making it good and cheaply and the other that takes it to the consumer. Next, social media is the newest use of technology to create and gauge new experience in the marketing of anything to people in the digital realm. Social media isn't marketing. Marketing may politely use social media. Notice the difference? And since the digital realm is here to stay and grow, marketers of every stripe must learn to use it productively right now in order to adjust to what the customers truly want. Experience engineering is more than nifty sounding lingo. It is essential in any market that is seeing the effects of Choice. The media universe needs to adopt social media as a marketing tool and not with expectations if it fixing the old business model...but to launch the new models.
Privacy, intellectual property, responsibility to protect other people's work? These are all related questions today. That smaller units of association is happening now and will be a trend for along time, points to major re-thinking of how this case is proceeding. The royalty debate in radio, pirating of movies in Asia, linking and using of other's work in the social media realm....all have been written about in the last week. Again, it is all about privacy, IP, and the social contracts surrounding a free society. This is not one issue. This is part of a tremendous series of social issues that will see the further evolution of media as a key tool of humans across the globe. Any business now stuck thinking about how things are changing and lamenting even more changes in a digital world, are losing ground by the minute. Being a leader requires seeing and accepting social change. Social change requires different tools. ready, set, go.
This just reported in the Washington Post:
You Tube Ordered to release user data by court
another great link in this time of change: What is a business model?
