Saturday, January 29, 2011

The end of the Library

Despite the fact that, I don't have a library card, and haven't been in one for years, I'm a huge fan of Libraries. The notion that a group of people can collectively invest in and have more media available to collectively then any individual would be able to amass. It's great. But the age of the library is coming to an end.

The very purpose of the Library is counter to the media industries'. Libraries reduce the number of copies of a piece of media that need to be bought for a collection of people to al enjoy that media, and the media industries' purpose is to make money through the sales of copies of media. But up until now, there has been struck a delicate balance, the consumption of media is apt to whet the appetite for the consumption of media. Libraries are not as fickle in their purchasing as consumers can be, and large number of libraries provide a healthy base line for consumption, that makes publishing less of a risk. Libraries also frequently buy more durable (and expensive) hard back editions of books. Plus, if something IS really popular the library will never buy enough copies to slake the demand so individuals will buy copies of their own. Plus the physical overhead of moving around physical media limits a libraries ability to fulfill media demand.

But that balance is coming to an end. Netflix started the revolution by demonstrating that with small enough physical media you can get away with a lot fewer libraries (distribution centers), at the cost of some latency, between selection and enjoyment. But when you have a connected world and digital media, why do you need more then one library. And that library would of course be hyper efficient so one "copy" of a movie could be watched several times in the same day, so it would be easier for a library to meet everyone's demand for popular media, and the number of copies of less desired works that the library would have to buy would be minimal.

How do you get around the fact that a single digital library could replace all other media consumption outlets? Right now most libraries pay consumer or near consumer prices for media, and library equivalents like rental stores paid premiums, but usually got some premium like early access in return. If you try to not sell to the library, or charge it so much per copy that it has to charge exorbitant memberships, then individuals will just go about replacing it with consumer copies of media, or you'll create have-nots that will replace your media industries with ones of their own, that will eventually repeat the cycle.

When you look at the realism that it does take money to produce media, and that someone who is wildly successful at their career should be able to make enough at it to live off of for their whole adult lives, then we can't allow the eventual inevitable collapse of the library concept into a single global digital library.

The media industries of course being single minded, push for the two obvious solutions to the problem. Unsharable media, and a blanket tax on everyone to support the production of the media that everyone is consuming. The real problem here is that both of those solutions remove market factors from media. The benefit low quality media should be able to reap should be limited, but a blanket tax, would probably be blind to this, and with unsharable media you don't have used copies of the media coming onto the market quickly and undercutting the initial high price of media that's not worth it.

So how do you balance the values of fair compensation for work, sharing, fair pricing, and ownership? You start by enumerating those values, and realizing that while your interests may not immediately be best served immediately by embracing them all that in the long term you have to consider every one that is part of the media ecosystem and value them too. The other thing that you have to do is look for the technologies that have been disruptive to help solve the problem. Some ideas include distributed patronage where lots of people pay a little upfront to fund something so that it doesn't have to make money on the tail end, which with the internet actually starts to become feasible. Using technology to improve media consumption, helping people fill the portions of their life that are ripe to be filled with media consumption but have been too awkward, help people find new media better [personally i'm tired of having stuff recommended to me because I like one things I'd prefer recommendations based on the whole picture of who I am]. I think you also have to recognize the problem now and scale back some of the media industries' excesses, the more out of whack the compensation of the people at the top is with reality, the faster we move towards the breaking point, and conversely consumers need to do more to value the media they consume so that the media companies feel less defensive.

Of course there are other factors in play in all of this, that deserve posts of their own. If this was a simple topic it wouldn't merit all this discussion.

Tuesday, January 18, 2011

Technology Giveth, Technology Taketh away.

There would be no mass media without technology. So talking about one of the major technology issues facing the content industries seems like a logical place to start.

Technology is predictable, for just about any technology there is a progression. Technology makes the impossible possible. Perhaps at first not very well or very safe, but possible and almost inevitably very expensive at least to begin with. Then technology steadily improves, doing things better and safer. It also makes them cheaper, sometimes not until a threshold of cheap enough and safe enough have been reached, but eventually.

And that technology progression almost always lead to problems with business. When some technology is new it's expensive and some one has to shell out a lot for the equipment and has to make it back in time to replace it. And because the technology started so expensive and the initial investment was so high, It's not unreasonable that the people who fronted the money for the equipment might make a lot of money off of it. But technology is going to improve and the need for a middle man that owns the necessary equipment is going to go away. But it seems like as often as not the middle men that have been making a lot of money for a long time aren't prepared and fight tooth and nail in order to remain middle men. That's not saying that they should go out of business, but they should be looking for new ways to be a middle man that continue to grow the content.

The example of this that comes best to mind is the record companies. In the past month I've bought Indy band albums that were produced independently, advertised on youtube and I found through some combination of being picked up for ads, and people linking to them from facebook. Increasingly the record companies are being cut out of the loop of my music buying, not because of some stance of mine, but because as technology has made them irrelevant at their traditional roles, they have failed to evolve into new ones.

The lesson is that if you are in a content industry, and your stake in the business is that you own the expensive equipment, then you should have an exit strategy or a transition strategy. Because odds are that at some point the equipment will start getting cheaper.

And before I go to save a largely redundant post, the same trends in technology impact the makers of content consumption devices. Unit costs will go down, so even at steady margins profit per unit will go down, and eventually units will go down. Worse then that, there will be periodic technology plateaus where next improved type of player isn't obvious and if you're not spending R&D to find the next thing to make, when some one else does you'll be left in the dust. Case in point Sony losing it's music player dominance to Apple.