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On Content Ownership and Business Models

A little over a month ago a friend emailed me a link to this post jumping into the ongoing discussion of the content industry’s evolving business models.  The author, David Lowery, was formerly involved with Cracker and Camper Van Beethoven.  He is an accomplished musician and takes issue with the “new boss” in the recording industry.

In the last few years it’s become apparent the music business, which was once dominated by six large and powerful music conglomerates, MTV, Clear Channel and a handful of other companies, is now dominated by a smaller set of larger even more powerful tech conglomerates.  And their hold on the business seems to be getting stronger.

On one hand it doesn’t bother me because the “new boss” doesn’t really tell me what kind of songs to write or who should mix my record. But on the other hand I’m a little disturbed at how dependent I am on these tech behemoths to pursue my craft.  In fact it is nigh impossible for me to pursue my craft without enriching Apple, Amazon, Facebook and Google.   Further the new boss through it’s surrogates like Electronic Frontier Foundation  seems to be waging a cynical PR campaign that equates the unauthorized use of other people’s property (artist’s songs) with freedom.   A sort of Cyber –Bolshevik campaign of mass collectivization for the good of the state…er .. I mean Internet.   I say cynical because when it comes to their intellectual property, software patents for instance, these same companies fight tooth and nail.

Meet the new boss, he wants to collectivize your songs!

Lowery goes on to explore the disconnect between the “digerati” who recite the “information wants to be free”mantra while ignoring the latter half of that statement, which is that information wants to be expensive.  You see the original construct was that information wants to be free of shackles, not price.  The first piece has been adopted as a rallying cry for what Lowery calls the “freehadists.”

Now enter Matt Yglesias.  Matt is a political muckraker turned internet luminary who tackles Lowery’s arguments in a piece at Slate.

[T]he thing about the piece is that for such a long article on the subject of music, the internet, digitial technology, shifting business models, and so forth it didn’t say anything whatsoever about the consumer experience. The article is instead framed around a financial clash—and in some ways even more fundamentally a cultural clash—between artists and “the digerati” all framed in a heavily moralized manner. What’s missing from this is the actual point of intellectual property policy, namely to create an environment in which the audience has ample works to enjoy.

Actually, that’s not at all the point of intellectual property (IP) policy.  The very name should make that abundantly clear.  The whole thrust of IP policy is a discussion of ownership.  It is, at its core, a property law.

That said, both Lowery and Yglesias, and most people in this fight, seem to miss a fundamental piece of the puzzle.

Ownership vs. Access

I was at the annual Cable Show last wek in Boston and listened to perhaps the most salient, and overlooked point in the whole discussion of intellectual property.  Vevo CEO Rio Caraeff summed it up in a panel discussion of content business models. At about the 15 minute mark, he discusses the clash as not one over payment, but one of a somewhat generational shift in the concept of ownership.

 I think that we’re going through a generational shift between a generation that values ownership to a generation that values access. And I think that we are living in between both worlds right now.

The truth of that point simply cannot be overstated and the Yglesias-Lowery disconnect is a perfect example.

Lowery is ten years older than I. Yglesias is 10 years younger.  I can see, from that vantage point, both worlds.  I came of age in an era of music ownership.  I had huge casette, CD, VHS, and DVD collections. I explored music through genres just as Caraeff explains.  Like him, I didn’t dive into classical music because it was way down my list of musical categories that I enjoyed.

However, I was also an early adopter of technology owning a cell phone in 93 and an Internet connection largely before there was an Internet.  I grew up, like most kids Yglesias age, with the Internet in ways most of my peers did not.  When Napster came along I dove right in and explored music in ways that Caraeff explains, but which were not, strictly speaking, legal under our IP laws.

Lowery is, in many ways, not arguing for business models, he is arguing for ownership. He sees issues with IP law because it does not place enough emphasis on ownership (either his or the consumers’).  Yglesias sees the existing IP policy as nearly perfect because it places value on access.

Viewed in that context, much of the current debate over content industries (news, music, movies, books, etc) makes perfect sense.

Much of the discussion of “viewing windows” in the movie industry is based on the same idea.  The rise of Netflix stems from people wanting to have access to a library of long-tail content, rather than ownership of a favorite movie.  The industry, however, is still focused on getting people to buy DVDs.  They are focused on ownership as a model.

Lowery is correct in that we have traded a small number of companies that provided physical distribution of content for a small number of companies that provide digital access to content.  The “new boss” is a fact of life.  That said, short of sending casette tapes to people by mail, you are limited in your ability to reach the masses unless you have a platform that has been adopted by the masses.  That used to be radio and record stores, now it’s the Internet media companies.

Nothing is stopping musicians from making music, and many will continue to make a living from touring.  But just as not everyone who plays basketball will get a shot at the NBA, becoming a rock star will still require a huge audience.  The upside, in an access environment, is the number of people who find who, and who may become fans, is greater.

Written by Michael Turk