A Manifesto for the Content Industry 14. Do not sue your customers.

I know this is the same as 1 but it’s so important I thought I’d say it twice.*

Well here we are at the end and you’ll be relieved to know that this final entry will be very short.

The bottom line is that, as part of the content industry, your business exists to serve your customers.

If you choose to provide a service that is worse than the competition (be that legitimate or otherwise) then you can expect to lose customers.

If you choose to provide a service that excludes certain sections of your potential customer base then you can expect to lose customers.

If you choose to provide a product that is more restricted that that offered by the competition (legitimate or otherwise) you can expect to lose customers.

And finally, if you choose to treat your customers like criminals, and make them feel like criminals when they do support you, you can expect to lose customers.

But, as I’ve hopefully explained, you don’t have to choose to do any of these things…

* With reference to Red Dwarf: “Kryten: A superlative suggestion, sir, with just two minor flaws. One: we don't have any defensive shields. And two: we don't have any defensive shields. Now I realise that, technically speaking, that's only one flaw; but I thought it was such a big one, it was worth mentioning twice.”

Further musings on Copyright reform (3)

So, parts one and two done already yada yada yada...

The Copyright hub.
Actually some good stuff in here. Firstly they're not trying to build from scratch, they've actually done some research and are starting off with a lot of work done by the Copyright Clearance Centre in the US. Now I don't know anything about whether this is a good model or not (shout out in the comments if you have any experience of them) but re-using what's there is good project technique. Even if it's slightly ironic in this context...

Hmmm, in section 84 they mention a lot of the challenges that the hub will need to overcome to, basically, jam this new web thing into the old copyright box. Maybe it's time to look at whether the box is really the best thing for it, or even necessary at all?

They still seem to imagine individual users going for licenses for you-tube videos (not going to happen!) but they at least recognise that the hassle-and-cost factor might lead to stuff just being dropped. They also talk about making sure that the overall result is a "bigger pie" but I wonder if they've seriously looked at the pricing behaviours of the major rights holders over the last few years.

There's a section on education and information and how they plan to add this to the hub to help navigate the complex world of copyright law, but this seems to be addressing the symptoms rather than the actual problem: that copyright law is too complex and is unfit for the internet-enabled world.
Also they don't mention how they'll tackle the thorny issue of different international laws.

Section 94 has another depressing example of anecdote-based-policy making. Apparently a rights database "could have specific advantages in copyright enforcement across the internet including
• peer to peer file-sharing by individual consumers
• illegal websites and search engines with illegal websites appearing in their search results
• advertisers monetising copyright infringing material
• payment providers serving copyright infringing subscription services."
Needless to say it doesn't actually talk about HOW this might happen. That's just an industry wish-list that's been tagged on to a bit of wishful thinking.
This is followed by a paragraph that says dispute resolution is going to be critical and difficult and... ...we have no idea how to fix this.

There's a chunk on copyright and education and how difficult it is to navigate. Given the purpose of copyright is to promote learning and understanding (via the mechanism of payments to creators - important distinction that) you'd think we'd be able to come up with something simpler and more direct for schools - i.e if it's used in education it's "fair use" (to use the American term) and therefore allowable.
Overall this key chunk on copyright and education just comes up with better ways to preserve the status quo, it also suggest further use of aggregators and middlemen to simplify the process for the schools but all this will do is add an additional cost into the end price.
All a bit disappointing.

Next up, music licensing - that might take a few posts and will definitely be one for another night...

Further musing on copyright reform (2)

Following on from the first bit, I'm now into the detail of the report.
Already warning bells are ringing...
1) Still no recognition of the amateur / bedroom creator.
2) there appears to be a lot of anecdotal evidence here and very little factual research to back it up. For example: "We have heard from ITV, for example, that the adoption of the ISAN system has contributed
to increased revenue collection. Although it is impossible to be absolutely certain that the growth of collection revenues was the result of ISAN alone"
3) I have concerns about whether (in the absence of proper evidence) the differences between causation and correlation are being properly understood.
Carrying on...

The Images and metadata bit is interesting, a fair number of reasonable suggestions on unique identifiers and registries but then, when it gets to the critical bit about what to do about stripping out meta-data, it's back to a voluntary code of practice.
Sorry, but doing this deliberately is already illegal* so if, as suggested, the industry is in the habit of wide-scale meta-data stripping, what the fuck difference do they think signing up to a voluntary agreement is going to do?
It makes me wonder if the report writers have had the Treasury breathing down their necks the entire time saying "remember, there's no budget for this."
In my day job I'm what's euphemistically known as a "change professional" and I will tell you one thing for free; if you don't put budget and backbone behind something you won't change shit.
Carrying on

Finally in section 67 we begin to see the scale of creation at the moment. PPL reports that members are registrering new recordings at the rate of 10200 per week. That's half a million new recordings a year from the UK alone. But this is just the formal stuff that people register. I wonder what percentage of bedroom / amateur recordings are not registered?
To be fair, PPL appear to be doing some good stuff on databases, but I do worry a bit about the possible naivety expressed in the idea that where the UK leads other countries will follow and exactly how this will translate into good news "for the economy as a whole". As Dr Ben Goldacre would say, "the plural of anecdote is not data." 

Section 73 acknowledges the existence of content outside of the traditional industry channels. This appears to be covered in a single paragraph with a suggestion that the LCC project looks at it. Buck passed, no budget required.

Section 75, second mention of end-users. That might be you or me.

That's the data section done. The surprising thing about this is that they didn't expect this to be a problem when they started out. Who were they talking to? People have been discussing exactly this problem for years.
Oh well, it's also me done for the night. In the next thrilling installment we look at The Copyright Hub.
Join us then...



* Criminal as well as civil charges can be brought.

Further musings on copyright reform (1)

Slight change of plan. I was going to post a single blog on this but it might ramble on so instead I'll post a number of them as I work through and come back and correct any errors or misunderstandings.

For the last couple of evenings I have been reading the second half of the Intellectual Property Office (IPO) report on copyright reform.
I do these things for you...
I summarised my feelings on the first half here: Proposed UK Copyright reforms draft paper out

The second part of the report covers "Streamlining copyright licensing for the digital age" and yet, just 14 pages into the 76 of the report, I find myself wondering if a) they use the word "streamlining" in the same way that most of us would and b) if they're really aware of what's actually happening out there in the digital age.
I'm making these notes as I go along but things that concern me so far are:
In respect of streamlining the process, the first half of the report seems to make things more complex (as bemuso explains here).
In respect of understanding the digital age:
1) they appear to think that the representative groups from the analogue age still speak for the digital generations.
2) they appear to think that creators and consumers are two distinct groups and don't appear to understand the sheer volume of amateur / unpaid content creators out there.
3) they still don't appear to have grasped the scale of the issue they're attempting to solve, this is indicated by a suggestion that you-tube users would apply to license the music that's being played in the background of an amateur video.
Hello! Over 48 hours of video is uploaded every minute, how in the name of all that's holy do you intend to police this? Because if you can't, then people will just skip past your pain-in-the-arse (and probably stupidly expensive) licensing step and upload anyway.
sheesh.
Anyway, back to my reading.

A Manifesto for the Content Industry 13 - The customers are out there.

A corollary to 8; the argument that people are unwilling to pay for content has been proven false by the success of I-tunes, Spotify, The Financial Times and numerous others. You have to figure out who you’re trying to serve and what their needs are (Hint, the answers aren’t “everybody” and “everything”)

Amongst the terms you encounter on the web from the more vociferous supporters of copyright (and intellectual property in general) is “Freetard”, a term used as an insult against anyone who downloads content without paying for it. As well as being a fairly offensive term in its use of the word “retard” it’s also indicative of a mind-set that tries to frame the debate as a moral rather than business-model one. You can also frequently find it used by those who argue that “creators” and “consumers” are two distinct camps.

But the main argument you get from the freetard-motif-users is that people won’t pay if there’s a free alternative.

As I covered back in section 4, this is demonstrably false. If you provide an easy-to-use, 1-stop-shop with an end product that has no degradations compared to the illegal alternative, then customers are willing to pay. This is especially true if you can demonstrate that they’re effectively supporting the artist directly*.

What has changed significantly for the big content industries is the access to the content. In the good / bad** old days the major labels / studios / publishers effectively controlled not just what was made, but what was sold. One size would fit all because there was only one size available and customers could like it or lump it.

If you wanted to see a movie you went to the cinema and watched what was showing. Similarly the radio stations would (to a large extent) play what payola or paid taste-makers suggested.

But (repeat after me) these gates restricting access to content are gone. More people are creating, marketing and distributing content than ever before. One size no longer fits all because I can find more sizes just a mouse-click away. An interesting article interviewing the CEO of a label now distributed by Universal Music Group [http://www.newyorker.com/reporting/2012/09/03/120903fa_fact_widdicombe?currentPage=all]  indicates that they’re beginning to realise this***, they’re target product is the “hit” and their target audience is (to be crude) the Justin Bieber fan. They’re a big player so they can aim mass-market. If they’re smart they will adopt a different strategy for their sub-labels that target different niches.

Hollywood does blockbusters very well, those looking for more cerebral fare will frequently turn to UK, French or Indy producers, again, different strategies are needed for the different products and audiences.

So what’s the problem?

The problem is the largest of the legacy industries are trying to avoid having to adapt by legislating the gates back into place. It won’t work, but it slows down the progress of our technology and capabilities of a lot of the smaller creators whilst they try.

Some people seem to be stuck with the idea that biggest is best and that best of all is being able to control & monetise every use of their content. Unfortunately this doesn’t necessarily result in what might actually produce the most profit.

Sometimes coincidence works in your favour. Just as I was about to start writing this section of the manifesto I came across the following quote from Bill Cosby, “I don’t know the key to success, but the key to failure is trying to please everybody“.

* or that there’s a charitable aspect to their support.

** delete as appropriate

*** but interestingly it’s taken a small label to introduce this concept and it’s still not UMG’s standard operating model.

A Manifesto for the Content Industry 12. The gravy train has stopped; it’s time to get off.

You are no longer the gatekeepers to content and you no longer have a monopoly. Lobby if you like (and we know you do) but you’d be better off coming to terms with it and adapting.

Let’s go back to the difference between middlemen and gatekeepers: What are you bringing to the table? If you’re adding something to the mix (distribution, promotion, technical expertise, access to fans / artists etc. etc.) then you’re a middleman. If all you’re doing is charging people to get to the table then you’re a gatekeeper and, let’s not beat around the bush, you’re doomed.

Before the advent of recorded media things were pretty simple. If you wanted to listen to some music you either played it yourself, went somewhere where someone would be playing it or (for the very rich) paid for someone to come to you and play it.

There were no movies of course, but the theatre was there and off you went.

The gatekeepers were just that, the men on the gate and, in some cases, the booking agents, but they were relatively few and far between. The middlemen were the tavern landlords, the ticket sellers and the folks who stuck up the bills.

With the advent of recorded media the game changed. Suddenly the option of bringing the entertainment to you existed for everyone, not just the very rich. But producing, distributing and advertising this content was expensive, very expensive. It also took a long time and required a lot of very specialist resource.

This meant there quickly became a clear divide between the amateurs and the industry-backed professionals, a divide that led to a massively successful set of industries for about 50-odd years and an ever expanding set of restrictions on what could be done with the output of these industries.

Towards the end of the last century, along with the rise of the personal electronics and the increasing availability of home computing, three things happened that started an inexorable change for these industries:

1) cheaper hardware and software brought media creation capability to the masses. Prices have continued to fall and quality has continued to rise to levels unimagined just twenty years previously. £1000 will buy you a brand new computer, the recording software, a solid-top acoustic guitar and a condenser microphone. With that you could record music that will surpass a lot of the stuff from some of the professional studios of the seventies and 80s.

2) The internet arrived and then, critically, morphed into web2.0, shifting from being yet-another-mass-media-distribution- channel to being a true many-to-many distribution mechanism for User Generated Content (UGC). In the music world sites like myspace (RIP), cdbaby, last FM, bandcamp, soundcloud, thesixtyone and many others sprang up to help artists distribute and advertise their work directly to fans. Amazon, Lulu and others are providing the same service for authors and crowd-funding tools like Kickstarter are offering aspiring film-makers and game designers (see 3) the chance to make this shift as well.

3) Computer games and consoles made the shift from the arcade and nerdiness to the front room and mainstream acceptance. In a world where digital content is effectively infinitely abundant, disposable income is still depressingly finite. The music, movie and publishing industries have been forced to adapt to a new competitor for these entertainment dollars and, in general, it’s a competitor that is born of the digital revolution and is reacting to the changing world more quickly and more profitably.

Content will always be produced, fans will always exist but the gates are going or, in some places, have gone entirely. There will always be a place for those who can add value to the connection between fan and creator, but if your business model exists solely to stand at the gate demanding admission then your ex-customer will just walk over the ruins of the walls around you.

Or, to go back to the original metaphor, the gravy train has stopped at the buffers, the passengers and artists have disembarked and are mingling on the platforms planning new journeys on new trains, cars, planes, bicycles and everything else under the sun. How long are you going to sit in the carriage waiting for them to come back?

A Manifesto for the content industry 11 - This is a global market

If you charge western prices to the third world then people will find a way to get the content for free. 99c might not be a lot to readers of this blog but it’s a day’s wage to large amounts of the globe. The bad news is that you can’t stop a European going to an African website and buying from there, your unit cost is zero, expect your prices to trend that way.

This will be a short entry because it’s really just simple economics (even if it’s frequently missed by a great number of corporations who should know better).

Point 1: Once something is on the web it is effectively available everywhere. Sure you can try blocking things by regions and this will work for casual users and non-techy folks* but these things are easy to work around.
Point 2: Your unit cost is effectively zero**, everyone understands this, your unit price will have to be close to that for people to feel that they’re not being ripped off.
“Close to zero” is a variable though. In Western Europe or North America you can just about get away with 99c (or 99p) being “close to zero”. In the Far East, Eastern Europe, Russia, India and other areas of Asia, South America, anywhere in Africa, 99c gets ever further away from “close to zero” and ever closer to “a day’s wage”.
People will not pay a day’s wage for a digital entertainment file.

If you price your product that way then you can expect a high proportion of piracy in those countries. So you have two options: local pricing or acceptance that that market is not going to provide you with any income from digital downloads***.
However if you go for local pricing we get back to this “global market” thing. I have a friend who buys all his MP3s from a Russian site. It’s all completely legit (as far as he’s aware), but only a 10 th of the price. No laws broken, no copyright infringed, 1/10th the outlay.

But maybe 10 times the risk?
I’ve never used this site for two reasons:
1) I’m not comfortable giving my credit card details to a Russian website.
2) I’m not convinced that any of that money will ever make it back to the original artist.

And those two reasons mean a business opportunity still exists.
Let’s face it, a lot of the countries that have the lowest standards of living are also rife with corruption, if you run a trusted, 1st world web-company then that alone will be reason for some people to buy (see Amazon and iTunes for examples).
Secondly the success of things like Kickstarter, NoiseTrade and Bandcamp shows that there are a lot of customers out there who want to support the artist.
If you can facilitate that, show that you’re helping to get that content made, and provide a trustworthy service, then there’s a place for you.

* Warning, non-techy folks are a decreasing proportion of the population, building your business model on them is not a long-term strategy.
** I know that there are hosting and management costs for large businesses, but those large businesses are shifting lots of units.
*** It could still provide you with income from other channels though, don’t write it off.