Used Media

So of course after an extended period of having nothing pop into my head to talk about here, I thought of two things in relatively short order. But I'm gonna only talk about one of them now. Cause I'm a punk like that.

This is mostly applicable to the game industry but is kind of there for all media and that is MSRP and Used media. In the game industry, used games sales are a "big problem". A 10 hour game that costs 50 dollars and has no reply value is a big problem. That it's developer can't profitably produce that game, if not everyone who plays it paid $50 for the privilege isn't a problem.

I may not sound at all conflicted about this issue, but I am. Having standard prives for games that very greatly in quality and value to the consumer is unfair. I'm unsympathetic to an industry that has pretty much participated in price fixing when that bites them in the ass. However I understand that there are some amazing games that are only 10 hour games, and in an ideal world the reward to their creators for their work would far exceed what some people get for horrible games, because the used game market is so active. Of course when companies start to take draconian measures to make games not re-sellable, it's again hard to be sympathetic.

To reward artists in the long term I think the middle men are going to have to be taken out of the equation. If your involved in bulk upfront sales to retailers then at some point you are going to sell at a fixed price, and not be able to reap the rewards of any supply/demand mechanisms that are put in place. This I think is coming as evidenced by steam, the apple app stores, and on console purchases.

In the short term I think the games industry would be more successful if they cut down the initial price of games. New Console games normally cost around $50, which is twice the initial cost of then next tier of entertainment products which are Hardback books and new movies. If you reduce the initial price you take a lot of the steam out the used game market. And if you reduce the initial expectation of income from a game and budget accordingly then what used sales there aren't won't be as big an impact. If you are worried you won't be able to cover salaries, then just look at the successful mobile game market and see that people will pay for cheap games, so the way to retain top talent isn't with high salaries that are hard to meet, it's with a percentage of profit.

And this of course is just another case of entrenched business models causing problems. When will they learn that as your industry, consumers and your product change your business model must too.

Disposable Media

Sorry for the long pause. I've been trying to write this post for a long time but it keeps getting away from me before I even get to the meat of what I want to talk about. But hopefully this time I'll pull it off.

In Radio and TV, the main draw for an audience that is counted on is novelty. That's why it's no longer the case that half the year you get a new shows and the other half you get repeats. Instead you get new shows most of the year except for those periods where the audience is expected to be minimal at best. The effect of this is that most media is created as disposable media.

There are a few problems with this. The first is that the plug gets pulled way to easily. We've seen this with shows like Family Guy and Futurama. The second is that when a show gets thrown away without repeats to drive sales, that last season may not see a DVD release. The third is that Gimmick shows abound, because they can string people along for a season, and get good enough ratings. Another is that shows that have managed to stick get kept around way to long, rather then being allowed to go out on a high note, and they get imitated past the point of saturation.

Media should be made to be high quality and original. As a kid I watched so much TV from before I was born, I doubt today's kids will, or will even get the chance. The powers that be will never see the value of some of the media out there, and they will never give it the chance to demonstrate that for itself. Was the return of Futurama and Family Guy a fluke?

I think ultimately it will be the ad agencies themselves, if anyone, who breaks us out from this cycle. They've already learned to go harvest from independents for their Ad music, they'll even give away (sometimes) the music they made as an exercise in building brand loyalty. How long before they do the same with TV type content.

In an ideal world we would have something like the BBC, who take chances see what people really like and go with it. Oh and if they show only produces 6 episodes a year, whatever. I'm not sure if the BBC is profitable, or if they are that that model would ever really fly as a model for the world. The one thing that is certain is that, in the age of new media, the TV and Radio stations are no longer the guardians of what people can find. independent media is out there. go find some, and if you find something you like, PLEASE, spread the word.

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.

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.