Select Page

—— Forwarded Message From: “Russell Turpin” Date: Thu, 21 Feb 2002 19:38:27 +0000 To: fork [at] xent [dot] com Subject: Media production post-Napsterization

While the anarchistic part of me roots for the Napsters, the PVRs, and all the technology coming down the pike that allows consumers to freely distributed any set of bits they once have in hand, the economic part of me asks uncomfortable questions about the economics of content production once this trend is fully played out. Imagine distribution cost, search cost, and replication cost all at zero, for practical purposes, for any content that has been digitized. Here are my predictions:

* It won’t hurt advertisers. * It won’t hurt the media industry. * It WILL hurt the media consumer.

Given this environment, advertising is pretty obvious. You simply pay producers to create content that includes the messages desired. Pepsi pays Spielberg to make Star Wars X so that it features Britney Spears, always drinking a can of you-know-what. (This raises the issue of how to make sure messages persist when it is easy for anyone to edit the end result, but for now, let’s not worry about that.) The Focus on the Family pays Spielberg to make sure that none of the characters get laid without prior nuptials. Spielberg works out his budget by aggregating and taking bids from an optimal set of “message sponsors.”

The advertisers are happy. Spielberg is happy. And the media lawyers are very happy. The current players whine, because this means change, and because their individual positions are threatened. In the end, though, Hollywood and advertisers come out on top.

But consumers get only content that is either (a) produced for free, or (b) message-sponsored. Today, an author, or even an indie director, might produce a work that has little advertising potential, betting on the ability to attract a small audience willing to pay for the work. Indeed, there are thousands of authors who produce work after work, never hitting it big, never attracting the attention of sponsors, but managing to justify their efforts by the steady and continual profits from their readers. This is the business model that is threatened by napsterization. Personally, I find that very worrisome.

I don’t include musicians in the above business model. It seems to me that the music industry has managed to make the sale of recordings something that barely benefits most performers. The business model there is that the musician contributes this kind of content, for very modest compensation, as a way of advertising their music, to hopefully grow revenues from live performances. This is why many second-tier musicians were not worried about Napster. The music industry owns recorded distribution, and except for the big names, musicians weren’t making anything from it anyway.

But there are no live performances for book authors. What they make comes from sales. The end of those sales worries me. Voluntary contribution models won’t solve this problem; we already know the evolution where a kind of commodity is a public good.

So .. what am I missing? What saves the day?

%d bloggers like this: