What’s in store?
HDTV, DVD-Audio, 3G, FTTH, nanoscale processors, blade servers, HDVD/BD…what do these have in common? They are big, they are fast, they are expensive to commercialize, and they are hungry…what are they hungry for? Information, in some combination of communications, computations, and/or content. The future of these and hundreds of similar products and their components, systems and applications softwares, and distribution channels, and the future of all the companies that make them, and the future of the workers that make up those companies, and the future of the communities in which those workers live, depends in no small part on creating and/or facilitating the demand for information in all of those forms.
I don’t pretend to know much about the technology that supports communications and computations except tangentially as it relates to the technology I am passionate about, that which supports content. Over the more than 20 years I have been researching the trends and futures for content and delivery technology, I have been drawn to the consumer sector because of it’s, well, turmoil, for lack of a better short explanation, but sometimes my attention is drawn back to the business information sector. On the Red Herring Blog today is a post about Reuters’ new information delivery strategy, in which they are looking for subscription revenue from consumers and advertising revenue from institutions, and therefore are cutting off their feeds to Yahoo, the Motley Fool and other licensed sites. I am not close enough to these decisions to render any judgment as to why they are attempting to do the reverse of the revenue model in which they and companies like them in the professional information space have pursued. It makes me very uncomfortable, like floundering tends to do.
While I was poking around, I happened on this poignant essay on the occasion of Red Herring’s 10th anniversary. Two things: one, what Tony Perkins was proud of speaks volumes. He states, “The reason we are here today, and most of competitors are not, is, I think due in part to the fact that we called the bubble, and maintained a strong editorial product. ” Makes the banter between Jason Calacanis and John Battelle lately on how to monetize blogs sound like schoolyard kid talk. Second, this observation, “An entrepreneur’s greatest joy comes from building, his worst nightmare is dismantling. ” Unlike entrepreneurs, most executives are unable to do both, they are either growth specialists or turn-around experts.
One of the amazing things about humanity is the range of behavior between generosity and greed when it comes to enterprise. I have always liked the idea that competition necessarily means winners and losers, but that the measure of success was not how fine the particles you managed to pulverize your competitor into when you finally walked away towards your next victim. In fact, there could be, warily perhaps, a compromise position whereby two oppositional parties could collaborate.
All of this is merely to forestall the most uncomfortable subject I came across yesterday, this disturbing article written with great effort by George Zieman on RIAA President Cary Sherman’s recent testimony to the House Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary pleading for relief from paying the eight and a half cents per song mechanicals (the fee paid to the songwriter and publisher) stipulated in Section 115 of the copyright act. George is one of the loudest voices I have heard criticizing the behavior of the record company’s trade association, and one of the smartest. He first came to my attention last year when he fingered the undisclosed drop in album releases by the majors by tracking down enough crumbs of data until he had a credible set to support his allegation. Then he came up again in this very disturbing portrait of the RIAA seeking to switch the flat fee to a percentage of actual revenue, using their calculations of what revenue was, of course.
The idea that an organization supposedly devoted to expanding business opportunity for it’s members would focus on legislation that weakens privacy, litigation that criminalizes and stiffly penalizes individual file sharing, and technology that makes consumer electronics devices and personal computers inoperable has been bad public relations, bad for society, and bad for their organizations and shareholders. How I wish they could turn that money and energy into making music available, affordable, and effective. For a business organization to put a spin on the numbers is to be expected. But the concept of them lobbying lawmakers that paying a songwriter eight and a half cents per song is preventing them from acting to innovate with new products to restore profitability to their industry is making it much, much worse considering the quality and quantity of efforts made by the record companies thus far in promoting legitimate online music sales.
The fact is that the vast majority of music worth consuming is legally controlled by the record companies, and I’m not passing judgment on the quality of indie label artists, I’m talking about the music of people who are dead or are not on tour playing the same songs with the same arrrangements in the same keys that were hits for them in the 70s to the same fans. Our cultural heritage in music and film is not owned or made available like that in art or literature. The cross-promotional power of the consolidated entertainment companies to make artists popular and to make music widely available is not within the grasp of the grassroots self-publishing movement.
And from InfoTech’s standpoint, it is worth noting that the majority of market data we have about the record industry is sponsored and published by the record industry. No other information or entertainment industry sector or consumer electronics or computer sector that I know of outside of the public sector collects such a uniform and complete set of output statistics on its members in all the major countries over a historically significant length of time as does the IFPI. Factory shipments remain the most valuable point in the market channel to collect data. The alternatives, measuring point of sale data and polling consumers, are not as reliable for establishing historic trends and do not yield as strong indicators for future performance.
Finally, as the noise level and bright lights have increased around the issue of RIAA suing kids for trading files, the work the parent organization, IFPI, has done in tracking down, prosecuting, and helping countries enact legislation to eliminate the real pirates, the outlaw replication factories and illegal street vending operations run by mafia and the equivalent tied to drug rings and all manner of other illegal activity, has gone completely unrecognized and appreciated.
No, boycotting the RIAA is just fighting negative energy with negative energy. You are forgetting that the vast majority of working musicians today derive some portion of their livelihood from the proceeds of recordings under contract with the majors, many of those tied to a variable rate dependent on volume. Buy a song from iTunes, eMusic or another service that has reasonable transaction policies instead. Keep your file trading to a close circle of gadgets, friends and relatives within your household. Write your congressman to oppose making laws that invade privacy, inflate copyrights, restrict data flows and allow media consolidation. That will send a much clearer message, in my opinion.
posted by julia b schwerin