After I wrote about the self-defeating nature of the media industry’s agenda in the Pirate Bay case, a couple people wrote in to ask the question: what should the media industry do?
The real issue we’re dealing with here is an end of scarcity. When we can duplicate any audio, video, text or application, there is no need for it to be tied to the physical means of its conveyance. That means it’s out of the control of its owners. If it has a commercial in it, it can be edited out; if it has copy protection or digital rights management (DRM), that can be excised; and so on. Infinite copies can be made and the flow of data is so immense there is no stopping it.
With this end of scarcity, the question is how content owners make money. It used to be they sold the physical product; now, with one click, the consumer copies it, legally or not. Those precious few gigabytes don’t seem worth the price of a physical object, since, after all, there’s no need for the physical object. At least, that’s how it appears to the consumer, and businesses have been careful for years not to let people know that the $17 CD they just bought cost $0.30 to manufacture because they printed 100,000 of them on giant industrial presses.
My advice to the media industry is to go to a licensing model, right now. Don’t walk but run toward it. Set up a login for each customer, let them purchase products, and then charge them a minimal fee for the transfer each time they need it. That way, if they crash their hard drives and they didn’t have them backed up, they pay to get it sent again. That’s fair — bandwidth is cheap but not free.
Then, point out that this scarcity has always been artificial as a way of disguising how cheap the physical product was. The real cost has always been the organizations that promote artists, and the production costs of rendering the product, even if after that it costs nearly nothing to print ’em. Show the public the thousands of people who depend on these products for their livelihood, and to what degree they get rewarded.
Do not dick around with DRM. It doesn’t work; in fact, the only person it penalizes is the honest consumer, because pirates work around it as a matter of course. Send your products in the free and clear. The people who would have bought them before now will buy them; however, the people who always stole them will continue to do so. Ignore them.
Cut your prices to reflect the fact that a brick and mortar store is not needed, nor is shipping, packaging and printing. But hold the line on everything else because those costs are still there. Run an honest business and the customers will come to you.
There is a glitch in all of this. The media industry likes blockbusters. Those days are gone, I’m afraid. The blockbuster had novelty on its side and attracted the biggest cross-section of audience, which was mostly stupid irresponsible people who will steal anything they think they can get away with. Solution: don’t make product for these people. Focus on the middle class audience which thinks fair is fair and doesn’t mind paying a reasonable price.
Until the industry acknowledges these truths, it’s going to have problems.