Through the various projects I’ve been involved in recently (openlearn, broadcast strategy review, Flosscom), I’ve come to the realisation that something very significant has happened to the nature of content. It can be summarised thus:
"Digital content wants to be free, and will seek the path to maximum access."
Let’s call it the content law. It can be seen as a variation on Dan Gillmore’s ‘the internet interprets censorship as damage and routes around it’. Evans and Wurster have argued that the digital marketplace has seen the unbundling of the economics of information and physical product. This is most readily seen in retail, where you have to see the physical object in a shop to know about it, but online the product information is separated out. David Weinberger explores the implications of this unbundling further, in that it allows infinite recategorisation because the information, unlike the physical product, can be in multiple places at once.
When the product is digital (image, movie, text, audio) then both the product and it’s information (and in the Weinberger sense the product is the information since everything is metadata), can be in multiple places. One of the consequences of this is that for any given digital market the ultimate outcome will be that eventually, and despite all the efforts to restrict it, digital content will be freely available.
Let’s consider some examples. Firstly, photography: in an analogue world the physical photograph (or the negative) was the information and the product. If you wanted to buy a photo you would have to buy a physical copy. The numbers of these could be controlled, and thus so could the price. With digital photography the initial online offerings still attempted to sell costly images in the $100s. For the individual services like Ofoto allowed you to share photos, but only at a thumbnail, and only with limited people. They didn’t want users to download the digital file, only to order prints from them. Then along comes Flickr and now we have largely free content, available to everyone.
In broadcast the changes haven’t quite gone this far yet, but they will. As content moves online and companies like Sky and BT move in to each other’s territory (Sky offering broadband, BT offering TV services), then the expensive subscription model of Sky begins to break down. There is too much free content out there to make it worthwhile. Large events (mainly sports) are sustaining the subscription model for a while, but eventually it will become unviable. Sky know this which is why they are branching out in to other services which people will pay for, such as broadband.
Lastly, music has been the one industry that has really struggled with this desire for content to be liberated. For years the record company ignored the internet (a case of commercial negligence), until Napster forced them to take notice. Suddenly content was free and everywhere. They fought back with legal action and restrictive DRM. The important thing for record company execs to realise is that the success of iTunes represents a step along the path to the liberation of content, not an end point. Increasingly artists are recording their own material, releasing it online and establishing a live following. They are effectively disintermediating the record companies. Having established an audience the artist may then sign a deal with a company for some of the marketing, but this is only because we have the intermediate stage of CDs still.
There are a number of steps in all these scenarios. The process goes something like this:
- The industry ignores the implications of digitisation and the internet
- The industry sees the internet as a means to find a global market for doing roughly the same business model.
- An initial outsider breaks down barriers, but the industry fights back with heavy handedness that demonstrate it wants to hold on to the original model and doesn’t get it.
- A halfway business model is found. The industry breathes a sigh of relief and execs open the champagne, because they think they have found a way to maintain their established business practice and enhance the possibilities of the net. They’re wrong.
- Through bottom up activity and newcomers to the industry content gradually becomes free and alternative business models emerge.
- The established players finally realise the model has changed and adapt or die.
The content law may seem simple, but it has enormous implications. Let’s try a thought experiment: imagine a matter transporter has been invented. The implications for transport industries, car manufacturers, holidays, property prices, retail etc would be enormous. The physical (including people) becomes digital content as it were, so there is no need to live near your place of work (or even to have a ‘place of work’).
The internet is a matter transporter for digital content. If you are working in any sector where the content can be digitised (broadcast, music, newspapers, movies, and er, education) then you should repeat the content law to yourself everyday, because it means you have to find alternative revenue streams for when your content achieves its nirvanic state of free and available to everyone. There may be some content which can survive this law, but you are probably going to do your organisation a bigger service if you assume the content law is true for you also and instead of trying to find ways to combat it, you seek ways to build new models around it.