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April 29, 2005
Little Brother: Watching Big Brother (1 of 3)
User-Generated Media Is The Only Reason We Are Not Living In An Orwellian Nightmare
When George Orwell suggested in his techno-futurist dystopian novel “1984” that citizens would voluntarily walk around with devices that transmitted their location to a centralized authority twenty four hours per day, it was one of many preposterous features of a society enabled by technology to go terribly wrong. He further envisioned the “telescreen” which is both a receiver and a transmitter. It incessantly relays messages from the Party and simultaneously allows the dreaded “thought police” to tune into the activities of any individual at any given time. Control of the news and entertainment are centralized and controlled under The Ministry of Truth.
Welcome To My Orwellian Nightmare
Today, I carry around a device that transmits my location to a centralized authority twenty four hours per day – my mobile phone. I have a 50” flat-screen TV just like the ones Orwell said would be in every home, and my TiVo knows my every media consumption move, right down to how many times I rewinded and watched the exposure of Janet Jackson’s breast during the superbowl. Control of the news and entertainment are centralized under a small handful of media conglomerates that dictate what I read, watch, hear and therefore to some extent, believe.
A Quick Look Back
Orwell published his classic in 1949, a time well before cell phones, set-top boxes and global domination of media by a small handful of megacorporations. The entire decade was dominated by World War II, the end of which launched the U.S. to the status of world superpower, challenged only by the USSR, which precipitated the Cold War based on a deep ideological divide, making communism (in this country anyway) a four-letter word. At the same time all of this was happening, television had just been made commercially available in 1947 with 13 stations and ENIAC, the first digital computer was completed in 1945. Hitler was eliminating artists who disagreed with his ideals. Many of them fled to America and influenced the art scene, as the center of the art universe moved from Paris to New York. Art became more abstract to show raw emotion and the school of Abstract Expressionism was born, chaotic and shocking to maintain its humanity during a time of insanity.
It is easy to see how George Orwell’s vision was developed at the intersection of new technology and the sociopolitical mood of the era, leading to the conclusion that technology could be deployed in a manner that centralizes and limits the flow of information to the people, thus eliminating individualism, democracy and freedom. Orwell wrote, "with the development of television, and the technical advance which made it possible to receive and transmit simultaneously on the same instrument, private life came to an end."
Orwell made that statement because he assumed the receiving and transmitting would be to and from a centralized Ministry of Truth. When media is created at the center of the network and broadcast outward, control of the message is possible because there is a bottleneck through which the message must pass. It is at that point that the controller of the media can influence the message to promote a particular opinion, ideal or agenda. This is fine, by the way, as long as the consumer of that media understands that they are consuming an opinion, ideal or agenda. When they do not, the media adopts the additional attributes that change its definition to propaganda.
I agree with Orwell that in a world where media production is centralized, technology can serve to limit rather than increase access to information, particularly the kind that is presented in a fair and balanced way.
The Opportunity Now
Well, I have an instrument that can receive and transmit simultaneously. It is my Verizon Wireless VX8000 camcorder phone and I carry it with me everywhere I go. Contrary to Orwell’s statement, though, I do not feel like my private life has come to an end. Rather, I feel that my transmitter/receiver is the beginning of a totally new media era that puts me in control of what I consume, but most importantly will soon enable me to consume content that other people have created and will enable them to consume content that I have created. The possibility of a massively multiuser participative mobile media network is right around the corner, and it is the thing that is going to kill the incumbent media companies unless they figure it out.
If they do figure it out, (and I mean in the way Kodak should have figured out the whole digital camera thing) it will accelerate a fundamental shift in the global media industry from centralized controller to distributed enabler. That would likely be a good (and very profitable) thing to do but would likely require the planned deconstruction of existing business models that have such organizational inertia driving them that it could be very painful to do. (Sort of like Kodak planning to get out of the film business and investing heavily in digital camera technology development.) I must say that in a lot of ways, I hope they do figure it out, because the benefit will be to consumers.
Little Brother Keeping Big Brother In Check
Let’s say you were near the 2004 Republican National Convention where several people were protesting and getting arrested for their raucous and dangerous behavior. Let’s further suppose you were not protesting but were arrested anyway while riding by on your bicycle and the policeman who arrested you falsely stated in his police report that you were aggressively resisting arrest and were responding violently. THE POLICEMAN LIED, but who is the judge going to believe? I promise that it is not you. As ridiculous as it should sound that in this country abuse of power is so common at even the lowest levels of government that you could be victimized and falsely accused and possibly imprisoned when you have done nothing wrong, that is exactly what happened to more than a thousand people that day. Now let’s say to make matters worse that a heavily edited version of a video of your arrest (the only video the police thought existed) served to corroborate the lying police officer’s story and that video was intentionally edited for that purpose. The evidence gets stacked against you. But what if there were dozens of citizens who captured your arrest on their camcorder phones, showing the unquestionable truth of the matter, and presented the unedited video to the district attorney? Would the DA throw the case out? Yes, and that is exactly what happened at the 2004 Republican National Convention as reported on the front page of the New York Times.
Distributed Media Promotes Democracy
If this sort of thing happens with any frequency at all, (like more than once, ever) the more people we have walking around with mobile connected camcorders, the better. When media production and consumption is distributed at the farthest edge of the network, into the hands of each and every individual, there is a greater chance (though no guarantee) that the truth will come out. If democracy lives or dies by the will of the people, then giving the people the ability to express themselves and transact their shared thoughts, opinions and agendas in a marketplace unencumbered by the political or other slant of any centralized controller is a way to promote democracy, if only of thought.
I would be remiss to not mention that such a marketplace for user-generated media will start to exist about three weeks from today when our first product, Rabble, launches. Rabble is blogging evolved for the mobile space, enabling users to take full advantage of the powerful media production and consumption devices in their pockets to express themselves anytime and anywhere. Don’t you think the least you should do is express your freedom by expressing yourself with Rabble? Yes, I do too.
In the first chapter of Orwell’s “1984”, On April 4, 1984 Winston Smith does something that was certainly a thoughtcrime and could at the very least land him in a concentration camp: He starts a diary.
Posted by Shawn Conahan at 10:17 AM | Comments (1)
April 19, 2005
F=UC2
In the play (and movie) Six Degrees of Separation, Ouisa Kittredge’s famous quote explains its theme and purpose. She says, “I read somewhere that everybody on this planet is separated by only six other people. Six degrees of separation between us and everyone else on this planet. Everyone is a new door opening into other worlds. Six degrees of separation between us and everyone else on this planet. But, to find the right six people...”
The story is about a rich New York couple who are visited one night by a man claiming to be a friend of their son’s from Harvard. Strangeness ensues.
Every “social networking” site is based upon this simple concept – that we are all connected by only six degrees of separation. It’s me to you to him to her to Kevin Bacon to the President of the United States. These sites generally allow you to visualize your “network” of friends and friends of friends. The purpose is to effect some sort of value from codifying this elaborate network of yours. And that’s the problem – that “some sort of value” is not generally understood.
6 is a Big Number
I have one problem with most social networking tools: They generally don’t do anything. Seeing the famous formula “E=MC2” written on a chalkboard does not make the theory of relativity any more useful to me. What I mean is if it is an axiomatic truth that we are all separated by six degrees, then why do I need to model it? I mean really, what value does that provide me if we all believe that we are each six phone calls away from the President of the United States anyway? Let’s say I use Friendster to model my network and on my sixth degree of separation I find George Dubya Bush. Would I call him? That’s ridiculous, right? But isn’t that exactly what these sites want us to do so they can take credit for making the connection? It is, and someone better start doing it, or this social networking thing is going to flame out fast. What if he were on my second degree? Surely that is much closer. Would I call him then? To ask for a favor or to introduce me to one of his daughters? No. In fact, I’m not sure how it happened but it turns out I am a ‘friend’ in the first degree of John Kerry. Now he’s only a senator, but still, I wouldn’t think to call him. (I am also three degrees away from General Zod, but jIH ta' ghobe' Sov Klingon, so I can’t call him anyway.)
In fact, I have seen no feel-good stories nor heard any anecdotal evidence from anyone I know that has signed up for a social networking site to the effect that they “…signed up for (insert social networking site here) and ohmigodwouldyoubelieve I met (person they didn’t know they knew) and now he/she is my friend/boss/lover/activity partner.”
Utility is Key
The issue here is that there is a reason our friends are our friends. Our friendships, at their core, are based on utility. We go from being total strangers to having some sort of relationship because we get something for each other, plain and simple. At work, we separate our “coworkers” from “work friends” based on how closely we have worked together, late nights finishing a deal or that time we were all in Vegas for the trade show and later that night Jenkins got up on the table and, well, what happens in Vegas stays in Vegas, but that Jenkins is okay in my book. Even if they aren’t our friends, we can connect with total strangers if we have a presumed commonality from which we may derive some value, however scant that value may be. My business partner was in a fraternity in college. He tells me that whenever he wants to stay at one of his fraternity’s houses, he can. This is based on the simple fact that he was in the same fraternity in college. If he meets someone in a bar who happens to mention they were in the same fraternity at some point in time, they are instantly buying each other drinks and talking about their college days even though they weren’t there together. There is a glue that binds us together based on experience and emotion that simply cannot be modeled. And if it cannot be modeled, it cannot be exploited.
Or perhaps it can. Similarly to Einstein’s theory of relativity, my new equation defines friendship. F=UC2. F denotes Friendship, U is Utility and I kept the factor C2, the square of the velocity of light, the same as in Einstein’s formula. So Utility can be turned into Friendship at the speed of light. (Or something like that – I went to a state school and our science requirements were possibly lower than at your school.)
Don’t believe me? Let’s say General Zod was giving away $100 bills. Would you be his friend then? Would you click on the link that makes you his friend? Of course you would. I’d do whatever internet version of socializing is required to get my $100. That’s Utility. This happens all the time on Monster.com. Strangers connect to form a deeper relationship, in this case in the form of an employment agreement.
In fact, the networking services that connect people for a purpose (Monster.com, Match.com) make a ton of money whereas “social networking” services that simply allow you to model your network and let you decide on the purpose don’t appear to have a viable source of income at the moment. Monster.com and Match.com are Media Networking sites, not social networking sites. That’s right – your profile on Match.com is Media. It is user-generated content that you produce for a specific purpose, namely to Network with others through the Media they create. Match.com is an LMNO. And Match.com Mobile is a better LMNO. The reason Match.com makes hundreds of millions of dollars and Friendster has no detectable source of revenue and is declining in usage is because Match.com provides utility, whereas Friendster doesn’t. (BTW, I think Friendster is starting to figure this out – they have blogging now.)
So, the way I see it, there are two ways to evolve social networking as conceived of today to make it actually useful: 1) Connect me to people I DON’T know. I already know who my friends are, but if you can introduce me to people for a reason, like getting a job or finding a date, then I’m in. The trouble is that there are already well-established companies doing this and it is unclear whether the social networking sites can evolve enough to do this well. 2) If you don’t want to provide me utility as the nexus to create friendships, at least provide a particular purpose for us all to get together. Let’s get our friends together to decode the human genome puzzle or search for extraterrestrial life. Give us a reason to use all of our friends and friends of friends for some productive purpose that creates something that we can all then benefit from. At the very least, give us something to transact.
Bottom line: There is more value in providing purpose between strangers than no purpose between friends. People want to meet people they don’t know and have proven they will pay for it if there is some utility in it. This is the cornerstone of Media Networking.
Posted by Shawn Conahan at 09:54 AM | Comments (1)
April 11, 2005
The Forces Shaping Mobile Media (3 of 3)
Postcards From The Edge
The basic competing economic forces I outlined previously will lead to a redefinition of Media. While the traditional media incumbents are taking the proper precautionary steps to ensure their content doesn’t get Napsterized, what if Media in the mobile space simply got redefined? Yes, I want to watch video on my phone because that’s cool, but did I say what kind of video I want to watch? Today’s condensed mobisode form of television will evolve into a new type of media: producers will simply create two-minute mobisodes specifically for the mobile environment. Why repackage and pay a license fee when I can create native content with no cost basis? Makes sense. Now the important part: Who makes the content? Does it have to be Hollywood studios? Not when the production studio is in your pocket.
With my LG VX8000 PMD I can create my own two-minute mobisode-based reality show and I’ll bet you I can get an audience. How big would my audience be? It doesn’t matter, because the incremental cost of distributing my mobisode to the next consumer does not decrease with an increase in the size of the audience. Every new viewer will pay for the bits to transfer it to their phone as they do today. So for a network operator making money on the transfer of content it doesn’t matter if that content is my mobiseries or a repackaged episode of "24." They incur the same network cost basis and can charge the same markup to the end user. The difference is that they don’t have to pay me a license fee to distribute my mobiseries. The math is simple: One mobisode can be watched by a million people or a million mobisodes can be watched by one person each and the economics don’t change for the owner of the network. (Except that they may improve their margins because they are not paying any licensing fees.) In the time it takes the MPEG LA and the GSMA to decide on a DRM standard (see the First Law) The Network owner will monetize their infrastructure by realizing they can make money without having to pay any attention at all to DRM.
All the tools are in place right now, too. The subscribers have the content production and consumption devices, they are happily paying for data and there is no shortage of demand for self-expression. Because there is no derivative work being created, there is no licensing minefield to navigate. The network operator simply states in their EULA that the end user releases all claims to the work and that it can be used however they see fit. Then the end user has no need for DRM, and frankly the content being produced would have such a short shelf life that it wouldn’t even make sense to protect it’s future value. Finally, the end user would not be asking the network operator for a cut of the revenue on every new user they add to their audience. In fact, today we create media that generates additional revenue for the network operator and we pay them for the privilege. Every time I send an SMS, I pay for it. And every SMS I send results in someone else opening it, and they pay for it. The more I send, the more people open them, and the more money I am making for the network operator. These little electronic postcards are not created at the center of the network by a Hollywood studio – they are created and distributed at the edge of the network by ordinary individuals like you and me.
Now amplify this concept so that whenever I produce a mobisode, I pay for it. And whenever I post it to my channel, my list of subscribers views it, and they pay for it, too. Simple. This is the future of mobile media. As devices and networks open, the ability to secure traditional media will become more and more difficult. Personalizing media and distributing it from a trusted source is a way to ensure viewership, and creates a different kind of “closed system,” one that is essentially open to everyone, but relevant to a smaller number of participants. This scalable model has already started with blogging and will continue into multimedia.
User-generated content is one of the biggest issues shaping mobile media because the mobile space overall is enabling a migration in media production to the farthest edge of the network - into the pockets of every wireless subscriber. I have said before that the biggest threat to incumbent media companies is a teenager with a mobile connected camcorder. But this is the biggest opportunity to the LMNO media titans of the future who have the vision to enable these prosumers to redefine media, and the mobile space is where it is going to happen.
Posted by Shawn Conahan at 07:04 AM
April 10, 2005
The Forces Shaping Mobile Media (2 of 3)
Three Kings Bearing Gifts of a Closed System
To distribute digital media without encumbering consumers with DRM, you simply need a closed system. This is easy to accomplish. There are basically Three Kings on the value chain that must collaborate in an attempt to secure digital media: The Device, The Application Provider and The Network. All three are at odds with each other, so collaboration appears to be impossible. (And so see the Second Law.) My explanation…
The Device Manufacturer
The Device manufacturer wants to add value to their devices in the form of features and functionality. The more devices they sell, the more money they make, so the more features and functionality they want to cram into each device, and the more competitive it will be in the marketplace, which is their goal. You want to play MP3 files on your device? No problem. After all, it is not the responsibility of the device manufacturer to secure the digital intellectual property rights for the Media industry. RIAA vs. Diamond Multimedia decided that.
Why did the RIAA have to sue Diamond? Because the Diamond Rio can enable people to make unsecured copies of unlicensed content and distribute it without any degradation of quality. This is essentially the same argument that the MPAA used against Sony back in the day to try to stop the introduction of the VCR. It is funny now to think that the MPAA didn’t want the VCR to happen. This is the same VCR that is now responsible for more revenue than box office receipts. Of course, hindsight is 20/20. Sony wanted to sell VCRs (but Betamax ones, oops) enough to take on the movie industry and by winning, they created an entire industry that benefited consumers, device manufacturers and the movie industry in addition to creating a multibillion dollar movie rental cottage industry that never existed before. The net result is that we cannot rely upon the Device Manufacturer to accept responsibility for digital media security because they have no economic interest in selling media. Funny that I can only articulate this bluntly, but if you sell devices, all you care about is selling devices. If I made mobile phones with razor-thin margins among cutthroat competitors and an SDMI-like organization was trying to force me to put their DRM solution in every handset I sell and on top of it they were trying to make me pay for it, I would rigorously defend my position that it is not my problem.
Nonetheless, creating a superior consumer device that in any way opens a closed system, no matter how much consumers value your innovation, apparently will eventually get you sued.
The Application Provider
The application provider’s business model is simple: I sell you the media, you pay me the money. Simple enough, except when you are selling a commodity that people can buy or get for free elsewhere. Let’s say Apple is selling a million songs per month on their popular iTunes site. According to Big Champagne’s Eric Garland, the RIAA claims 2.6 billion unauthorized downloads per month. “…so the whole of the legitimate marketplace accounts for less than 1% of total downloads.”
Ok, so there is and always has been illegal activity. It seems fairly out of control, but the lawyers of the people who own the very valuable intellectual property rights are doing their best to get it under control, so that’s good. And even with this rampant illegal activity, there appears to be a market for paid digital media, so that's good, too.
But put that aside for a moment and look at a classic content distribution model: Radio. When enough people have receivers, they become a market for whoever is providing content, in this case the broadcasters. And there are a lot of broadcasters. The iPod is sort of an evolution of radio in that it can receive content. If the only way to get digital media into your iPod is to buy it from the iTunes digital media site, then the collective iPod users become a market, but only for one content provider. They become a closed market and the mechanism to deliver the content is a closed system, like a radio that only tunes in one station. I say that if you can sell that kind of radio, more power to you. The content is secure enough to satisfy the music industry, consumers are happy with the apparently fairly priced media, and Apple is happy with their gross profit of $.06 per download or whatever it is because even if they aren’t making a ton of money on digital downloads, they sure seem to be selling a lot of iPods. Everyone’s happy, right? Well, everyone except other companies that make money selling digital media and all of a sudden find themselves shut out of the huge market that is the iPod consumer collective. Real Networks is a good example of a company shut out of the market. So what did they do? They hacked the iPod so that iPod users could download digital media from their competing service. The iPod/iTunes construct was a good example of The Device Manufacturer collaborating with The Application Provider to create a closed system. The problem is that the system doesn’t work when you try to include other application providers. Unlike Apple, Real doesn’t sell iPods and so doesn’t care about the careful plans Apple has laid for media distribution domination. If all you do is sell media, all you care about is selling media. So creating a market of your own, however logical it sounds, puts you at odds with other Application Providers and apparently you will eventually get hacked, possibly sued or at least elicit some strong words from a congressman or two.
The Network
Make a mobile phone that can download digital media and don’t talk to The Network about it first. See what happens.
Either you didn’t consider the cost of getting all of that data across the network (which would result in enough money to make The Network happy, but would make the price of a song somewhere around $27) and so it is impossible for them to sell your product because nobody would buy it or you knew it would be too expensive so you put together some sort of bluetooth or USB solution to transfer content, which admittedly isn’t the best user experience, but hey – it’s the first of its kind so people will buy it.
So you just cut out The Network. And guess what? They don’t sell your device to their subscribers.
When you own the network, you know it is very, very valuable because you own the customer. Of the three kings of digital media distribution, it is the most valuable because people will pay for access even when the content isn’t valuable enough to pay for.
Which brings us to Conahan’s Third Law of Digital Media Distribution: “The network gets paid whether the content is secure or not.”
We have a secure digital media distribution model in place right now, wherein the three kings, The Device Manufacturer, The Application Provider and The Network all cooperate harmoniously because they are all making money. Ringtones are sold in this country through a simple distribution chain where The Network gets a percentage for distribution, The Application Provider gets a percentage for provisioning the content, and The Device Manufacturer need only disable the ability for a user to forward a ringtone to someone else. It is called “forward lock” and it works well enough to support a multibillion dollar industry. In the case of ringtones, nobody is forcing the handset makers to install expensive DRM, the ringtone companies aren’t wrapping their files in DRM and the network operators aren’t encrypting transmissions. It is a completely closed system and everyone is happy, including consumers.
So if everyone is happy and making money, why wouldn’t they keep it a completely closed system? Here is where the interests of participating parties diverge.
Say you make handsets and to be competitive with other handset manufacturers, you put Bluetooth in your phones because people like it, maybe to enable a wireless headset. That’s good until you realize that you also just disrupted the closed system and people can transfer ringtones from their PCs or other devices for free.
Remember earlier this year when Verizon Wireless crippled the Bluetooth functionality on the V710?
They did this so that a user could connect a wireless headset, but couldn’t transfer media from their computer to their handset for free, requiring instead that the user pay for the media through the closed network. The response was largely negative and someone even initiated a class-action lawsuit against them. Why? Are we saying Verizon Wireless isn’t entitled to make money from the transfer of content in the same way they have been doing for years, namely by monetizing their very expensive investment in their network infrastructure that enables them to make money in this way? That is absolutely ridiculous. Yet, here they are having to spend time and money to defend their closed system that makes money for them and many others, which they probably partially did because of an assumed liability that some intellectual property rights holder could hold them accountable for not securing their media.
I could go on, but the point is that when you are repackaging and reselling someone else’s content that is protected by rigid intellectual property laws, you have a responsibility to distribute it in a relatively secure environment, lest you get sued. The traditional media industry can only survive if those intellectual property rights are vigorously protected, and now that they are finding the wireless space to be a legitimate distribution channel for their Media, they have (quite correctly) dragged the handset manufacturers and network operators into the fray to defend their rights by attempting to make them pay for expensive DRM.
The inevitability of the open network is one of the biggest issues shaping mobile media because the interests of competing links on the same value chain are at odds with each other. This will result in a standoff because each link has a legitimate business model that unfortunately requires at least one other link on the chain to cooperate in order to realize its full potential, and it only takes one small seemingly innocuous hole to pry the whole closed system wide open. The value always flows to the link on the chain that consolidates, rather than feeds, the ultimate value to the consumer. Ask any network operator what they sell the most of and they will tell you, “Whatever is at the top of the deck.” When the Network’s ability to monetize their infrastructure investment by selling content to their consumers is delayed by the inability of other companies to agree on the method to secure that content, the Network will find something else to sell.
Posted by Shawn Conahan at 10:32 AM
April 09, 2005
The Forces Shaping Mobile Media (1 of 3)
Putting the DRM back in Dramamine
“What is it about the phrase ‘Digital Rights Management’ that causes an overwhelming sense of sleepiness to kick in?”
- Julene Snyder, Industry Standard
I remember when Julene said that back in 1999 during the “MP3 revolution.” The MP3 format was such a threat to the music industry that they got together and created the SDMI – Secure Digital Music Initiative, a world-traveling cadre of at least 147 music and technology interested parties with a charter “to develop open technology specifications that protect the playing, storing, and distributing of digital music such that a new market for digital music may emerge.” While it was a brave endeavor, it ended in May of 2001 with a terse statement: “it was determined that there is not yet consensus for adoption of any combination of the proposed technologies.”
Which brings us to Conahan’s First Law of Digital Media Distribution: “Your ability to develop and agree upon a technology standard is inversely proportional to the number of people you involve in the development of and agreement upon a technology standard.”
In fact, a standard was agreed upon for digital music: the MP3 format. It just wasn’t a secure standard, and it wasn’t agreed upon by the music industry.
While SDMI was widely criticized for being nothing more than an international boondoggle for its participants, (the trips to Maui did seem excessive unless you were lucky enough to go) I think that characterization was wrong. After all, we are talking about the music industry, which at the time had an estimated worldwide value of ~$45 billion. If your very valuable industry was threatened by an unregulated technology that basically obviated your distribution model and ability to monetize your product, you would take steps to protect it, too, and you would have to do it in a way that was fair and transparent to everyone concerned. (And they were right to try – the worldwide value of the music industry today stands at around only $25 billion.) SDMI got to a point in September of 2000 where they invited the public to hack their six best secure digital music standards.
They were all hacked.
Which brings us to Conahan’s Second Law of Digital Media Distribution: “Digital media cannot be secured.”
I don’t mean to be flippant about this, and I hope you don’t mind me basing the Second Law on observed and anecdotal evidence, but such is the state of things:
iTunes DRM Hacked, Then Hacked Again
Hacker cracks Microsoft anti-piracy software
It is important to point out, though, that DRM is only required in an open system. You know those airport security looking things at the door of the music store that sets off an alarm when you walk out with a CD without paying? That’s DRM. It is required because anyone can walk into the store, and with an open system like that, you need to control theft by employing technology that routes people to the register before they make it to the door. By contrast, Amazon.com is a closed system. You click, and they ship via a trusted closed distribution model called the U.S. Mail. You don’t ever get to handle the CD or whatever it is you are buying until after you pay. The consuming public cannot walk into their warehouse, and so there are no airport security things at the door because there is no door. In a closed system, nobody has to implement DRM because there is little chance of intellectual property rights being compromised.
And so I read with great interest this article yesterday via moconews: Law to make iTunes compatible with Microsoft?
More than I find it interesting that congress is being called upon to further opine on the future of digital media distribution, I find it interesting that the companies creating closed distribution systems to protect the intellectual property rights of the artists and other owners of federally protected copyrighted works are the same companies being vilified for not creating an “open” system fostering healthy competition where everybody wins. More on that later.
The bottom line here is that consumers are not demanding Digital Rights Management. Nor are they demanding a legislative mandate on how they will consume content. Consumers are simply asking for content. Consumer does not mean Buyer. Consumers on the internet have proven that given the choice between an open system with no DRM, a closed system that feels unencumbered and an open system with DRM restrictions that make them feel like criminals, they will adopt each in a decreasing order of magnitude over the next; respectively, MP3 files via P2P, Ringtones via a carrier controlled channel, and any online music download service where the same file is only a click away on Limewire.
The search for industry-standard DRM is one of the biggest issues shaping mobile media because it takes a lot of time and effort to sort out and in the meantime the mob of consumers will route around any solution that feels restrictive. Quality and cost don’t matter (much, given that ringtones cost $3 and you still can’t convince 99% of consumers to buy a full-length song online for $.99) as much as convenience and ease of use. While the politicians are figuring out how to make everyone on the supply side of media happy, innovation on the demand side is going to accelerate and a new kind of media that isn’t encumbered by traditional media copyright rules will emerge.
Posted by Shawn Conahan at 11:59 AM