A Manifesto for the content industry – 1. Do Not Sue Your Customers

Expanding from my previous blog this is the first in a series whereby I use you, my faithful readers (both of you), to sense-check my work and point out my idiocy. Thank you.

Do not sue your customers. Seriously, just don’t. It’s the economic equivalent of going to war. If, in the words of one CEO, you say “We’re going to sue the [expletive deleted] out of generation Y”, exactly how many of generation Z do you expect to buy your products? If someone is taking content you have the rights to and selling it on commercially, sure, take ‘em to the cleaners. But blocking up the legal system with 25,000 individual cases of people downloading The Hurt Locker is not only targeting a bunch of people who have no impact on your business model, it’s also an abuse of the legal process.

Taking legal action against someone is an act of aggression. In most walks of life it’s a last resort once all other options have been exhausted. If you have an argument with your partner, you talk it through, you might get counselling, you might end up at Relate, but you don’t phone the divorce lawyer straight away.

Similarly if your neighbour won’t return the lawnmower, you go round and ask for it back, maybe a couple of times, you don’t dial 999 as soon as the clippings have been emptied into the bin.

Most people would agree that the first thing to do in any disagreement is to talk to the other party and see if it can be resolved amicably but, for some reason, that doesn’t apply to the content industry. In the world of Intellectual Property, intellect is left behind and the first course of action is, all too frequently, a call to the legal department.

So ask yourself, are you getting hot under the collar about nothing? If a pre-mastered copy of your movie get’s leaked onto the web before all the special-effects are done, is this really going to stop people going to the cinema to see it when it’s done? Before you reach for the lawyers consider if you could be better served by going out there and talking to people. Explain that what they can download isn’t the finished article, empathise with them, if they’re going to that effort they’re probably some of your biggest fans. Handle it right and they can be some of your biggest advocates as well.

But let’s move on from this opening argument though and consider what to do if you think that you are genuinely being financially deprived due to someone else’s actions. There are three things to consider here:

1.  Are you targeting the right person?
2.  Are you using an appropriate means and claiming an appropriate recompense?
3.  Are you fully prepared for any backlash?

We’ll tackle these one at a time.

1.  Consider the defendant: are they an end-consumer who you haven’t effectively served in the market, or are they a middle-man profiting off your work without authorisation? If they’re the former then you’re barking up the wrong tree. Ventures like Spotify are increasingly showing that if you provide a decent legal experience that serves your customers, they don’t feel the need to get around copyright or distribution restrictions.
2.  Having identified that someone is wilfully, criminally distributing your product, you need to make a targeted and proportional response. If a torrent site in Norway has been distributing your software, use the existing legislation to find out who the uploader is and target them for proportional damages. Don’t sue the torrent site for the statutory maximum. There are two reasons for this, one is that if you take the maximalist approach the chances are that the site will close, declare bankruptcy and you won’t see a penny, the second reason is backlash (see point 3). Don’t be tempted by the dollar signs and go for the end-users either, it will sting you. The makers of the Hurt Locker are currently in the process of contacting 25,000 people and demanding $1500 dollars or threatening them with legal action (on the most flimsy of evidence). That’s what we call a shake down and it’s winning them no friends, even in the courts.
3.  Backlash. You’re probably familiar with the Streisand Effect. If not, take a moment to google this. Memory refreshed? Right, consider this and the quote at the top of the page. The internet is not going away. No matter how much lobbying is done. The current crop of rights holders are not going to remain the gatekeepers forever; there are too many alternative distribution methods now. If you aggravate and disenfranchise your artists’ fans both they, and the artists, will route around you. In some cases (see ACS Law) they may take active steps against you. This doesn’t mean you can’t take action when it’s needed; but you’ll need to be on the front foot with your web presence and you’d better have a good and honest explanation.

The bottom line is, if you’re relying on taking legal action to try to prop up a business model that’s no longer serving your customers, then you’re failing both your customers and the artists you’re claiming to represent. Adapt or be forgotten.

A manifesto for the content industry

Following on from my previous blog about the gender discrepancy between the charts and the amateur scene I’ve been doing some further thinking about how the music industry, and the wider content industry / rights holders* might want to behave if they are to survive (and even prosper) in the post-digital economy.

So, the manner of the Cluetrain Manifesto, I have produced a Manifesto for the Content Industry.

Now, before we get onto the manifesto, I want to head something off at the pass. This is not about whether it is right or wrong to copy and distribute files via the internet. This is not a moral debate. File sharing happens and, in one form or another, will always happen. This is a suggestion for how companies can accept this economic reality and still remain a viable business.

Right, now we’ve got that out of the way, here are my founding principles for a modern content provider. They’re in no order apart from number 1 and I'll expand on them in turn in future blogs:

1              Do not sue your customers. Seriously, just don’t. It’s the economic equivalent of going to war. If, in the words of one CEO, you say “We’re going to sue the fuck out of generation Y”, exactly how many of generation Z do you expect to buy your products? If someone is taking content you have the rights to and selling it on commercially, sure, take ‘em to the cleaners**. But blocking up the legal system with 25,000 individual cases of people downloading The Hurt Locker is not only targeting a bunch of people who have no impact on your business model, it’s also an abuse of the legal process.

2              One shared file does not equal one sale lost. It really doesn’t. People will accept something for free that they won’t be prepared to pay for, don’t kid yourself otherwise. A shared file is equally likely to lead to more sales rather than fewer.

3              Content will always be produced and consumed with or without you. You are just a facilitator. If your entire industry disappeared overnight, people will still create and they will find other ways to share and appreciate it. Never lose sight of this.

4              You can compete with free. Seriously, there are plenty of working business models out there, study them. You are better placed than anyone to make this work, failure to do so is not about not being able to compete with free, it’s a failure of your business acumen.

5              Add value. What are you doing that your customers can’t do with 20 minutes and the internet? What are you doing that a creator can’t do for themselves? If you’re not adding value, why would someone pay you?

6              Focus on quality. A corollary to adding value; you cannot compete on quantity, it’s you vs the world, you have to be better than good.

7              Be brave. If you’re focussing on sequels, glorified karaoke acts, this year’s answer to “X” or trying to build a brand then you are guaranteed to miss the next trend when it comes along.

8              Use your experience. There’s a lot of noise out there, but there’s also a huge amount of good stuff, your job is to find the great stuff. For example, if you’re a newspaper then do the investigative journalism, get into the detail and find the facts behind the story. I can get opinion and newsfeeds faster than you can go to print, get me the truth and I will buy your paper.

9              Be genuine. We’re sick of spin, we’re sick of hype. If you churn out repetitive and unoriginal content whilst claiming it’s the best thing since last year’s clone, we’ll stop listening and go elsewhere (a lot of people already have).

10            Free your people. If you’re doing the other stuff right your people should have some pretty interesting jobs. I bet they’ve got interesting stuff to say. Do they blog? We do. Do they comment in chatrooms? We do. Let them join the conversation, it should be part of their job.

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. But 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.

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.

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”)

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.***

So there you go, that’s my stab at a set of principles for a 21^st century content provider. What do you think?

* Please note, I am using the term “Content Industry” as a catch all to cover the major players in the Intellectual Property market (Studios, Record Labels, Publishers, Newspapers, Software houses) rather than the actual creators of that content (Artists, film-makers, authors etc) as the behaviours and ambitions are generally very different.

** Take legal action against your competitors if you must, but be aware of the Streisand affect. You can lose as much business being in the right as you can being in the wrong.

*** With reference to Red Dwarf