Jacques Mattheij

Technology, Coding and Business

The death throes of an industry

An industry is dying.

That’s should be sad thing but this time around it is actually a good thing.

That industry is the media industry, the companies that got insanely wealthy by playing both ends - their consumers and the providers of their merchandise, the artists they pretend to represent - against the middle.

They are not going to go without a fight, that’s for sure. To date we’ve only seen the warmup, if that, and we’re headed for the real showdown. The one in which a very large portion of the worlds private citizens (all the consumers of media) will be up against the might of the most unscrupulous of all the industrial conglomerates.

How it will end to me seems all but a foregone conclusion. The RIAA and MPAA and their international counterparts are doomed to die.

The reason why I believe this to be the case is a very simple technical one: it will not be very long now when a reasonably small package (say 3.5” x 5.25” x 1”) will hold all the movies and all the music that we’ve ever made. Right now using a 4T drive you can store 5700 movies at a usable resolution or 1.3 million songs. That’s more content than anybody can consume in a lifetime.

File sharing websites have enabled the creation of personal libraries of media content of absolutely enormous proportions, a collection that size would be a very large room filled with endless stacks of CDs and DVDs (and forget about storing that on VHS). And not only can you store all that data in a very compact volume, it is available on demand as well. The convenience factor of this library in your pocket is almost impossible to overstate.

The silicon media revolution (SSDs and other flash based storage media) will accellerate this, it will become ever easier to pass a large chunk of a personal collection to someone else at ever decreasing cost. Another decade or so and a third (or by then fourth) generation flash device will hold the equivalent of that 4T drive today. And it will cost only a couple of bucks. The convenience factor is extremely hard to ignore here, especially with ‘official’ releases of DVDs being improved with dire warnings about copying files. The pirated copies are now better than the originals!

When content is scarce and the only way to transport it is by passing a physical medium that is both expensive to produce and relatively rare a business model that is based on the control of that content is a defensible moat.

But once the product is no longer scarce at all and once the physical constraints evaporate there is absolutely no way that that will continue. The gravy train has not yet come to a halt but it is definitely slowing down and it hasn’t been refueled for a long time now. Sooner or later it will simply stop and no amount of flogging the dead horse will revive it.

And it’s high time too.

Maybe that will mean that there will be no more media superstars. But I’m not sure at all that that is a great loss.

Before that will happen though there will be a war. The media empires will definitely not go quietly, they will use and abuse the law wherever they can. They will use their warchest of money to buy influence and favorable legislation wherever they can. They will resist this change with all the energy that they can muster if only to extend their deathgrip on the market for one more cycle, a few months or even a couple of years.

But they will die. Nothing short of a miracle will stop that. No matter how many domains they will seize (or have seized), no matter how many people will end up behind bars, no matter how many people they push in to bankruptcy.

Disruption is a thing that is violent by its nature, it remains to be seen how much damage the wounded bear that is losing its captive audience can inflict on the population.

When they’re gone, and we look back - and I really hope that will be in a shorter rather than longer term - we will hopefully conclude that we should have never given these bankers (because really, that is what they are) the power that they had. After all, being an artist, making music and making movies is all about creativity, not about destruction.

And sure, that creativity needs to be compensated. So we will have to evolve new models, preferably models that do not involve middle-men that reap more than the creative people driving the process with their blood, sweat, energy and tears.

My own favorite is that we will see a number of marketplaces around the ransom model. A bit like ‘kickstarter’, where if enough people want to fund an artist to produce a work that work will indeed be produced, or where work that has already been produced will be held ransom until enough people have pledged to pay for it and then it will be released to be copied freely. Marketplaces are a great way to solve problems and I don’t think that content production is any different. After all, it all depends on the quality of what is produced. And if the quality is high enough people will pay, and they’ll be much more happy paying to the producers of the content than to a middle man that pockets a very large fraction of the take and passes on a pittance to the producer.

Other options are much more live content and merchandising, neither of which have the possibility of being repackaged as a stream of bits. Both are ways to show support and to get a unique experience.

So, goodbye, RIAA, goodbye MPAA. You had your use, you had your time. But that time is over and you now need to adapt or die. The window of opportunity for adapting is rapidly closing, if it hasn’t closed already.

And the world will end up a better place because of it.

And hello artists, we couldn’t live without you!

http://web.archive.org/web/20070509181400/http://www.janisian.com/article-internet_debacle.html

http://www.salon.com/2000/06/14/love_7/

http://en.wikipedia.org/wiki/Hollywood_accounting

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