kirk biglione (medialoper.com)
the future of all media is still digital. media companies are challenged by this transition. consumers have been burned by DRM and are carrying that baggage with them to the book world. even though the book industry hasn't done anything yet.
if we are not going to make the same mistakes as the music industry then we all need to agree on what those mistakes were. was adopting DRM one of the mistakes of the music industry.
in the 90's the music industry was doing really well because consumers were buying their whole collections again, this time on CD. they started developing the next medium to move consumers to. historically consumers bought what they were told (8 track, casseette, etc). the music industry didn't think consumers would go for a lower quality MP3. consumers however gained access to the tools the music industry had once had a monopoly on and everything changed. the recording industry lost touch with the power the consumer had (they had control) and also what the consumer wanted.
music industry mistakes:
1. mistaking consumer demand for piracy. the music industry has always attacked pirates, but they didn't understand that the internet pirates had different motivations. this was a new kind of pirate who wasn't interested in making money or attacking the industry. this kind of pirate was interested in getting the word out, social status, and was somewhat of a barometer of demand. from 97 to 2002 there were almost no legitimately available music tracks to download. what happens when you buy a new content device such as your first CD player or eReader? you want to by your old favorites for that device. ever try to buy a Thomas Pynhon eBook? it's not available legitimately. if you search for it online, you'll find an illegitimate source. however forget the ipod moment when the music industry suffered. we could have a CD moment when people try to fill their ereaders with old favorites and repurchase their collections
2. do not declare war on what consumer wants. the Diamond Rio came out and the RIAA sued it. the claim was that the Rio stood in the way of what consumers wanted, but actually it was exactly what they wanted
lawsuites are not a good business model (unless you're a lawyer). the RIAA sued a dead person, a family w/o a computer and a 12 yr. old girl. during this time their sales plumeted. lawsuits will not prevent change
3. assuming DRM must be the answer. this is a myth. only one physical copy is needed for online piracy. there is also a myth that DRM free means free, in fact consumers will pay. myth: DRM keeps honest consumers honest - reality: DRM often turns consumers into hackers. DRM shapes the marketplace for digital content.
CaseStudy: Microsoft PlaysForSure. The music industry began to become nervous about iTunes. MS came out with a DRM technology called PlaysForSure in 2004. A large number of manufactures and content providers adopted the technology. they branded everything that used it with their logo. by any metric it was the standard for DRM. it seemed iTunes wouldn't stand a chance. in 2006 Microsoft pulled the plug on PlaysForSure and instead wanted to push the Zune (which copied iPod). after the Zune launched most of the PlaysForSure sites closed or became DRM free.
how did this happen? consumer lust (for iPod and apple), iTunes and iPod had a superior consumer experience because of the tight integration, iPods weren't PlayForSure compatible
CaseStudy: Adobe Content Server. Adobe DRM is widely licensed and has a large number of content providers. Sony decided to move towards Adobe DRM instead of using its own proprietary DRM. B&N supported it with their Nook. then Apple came along and said that iPad ebooks will support ePub standard. seems Amazon doesn't stand a chance. there is now an ePub v.s ePub war since it is wrapped in different DRM by different companies. we have three major players. notice that Amazon is following the Apple playbook and tightly integrating their player and website. they are also looking at moving to other devices with a "kindle everywhere" approach and supporting iphone, desktop, etc. what consumers want in the end is for it "just to work". they want anyway, anyhow, anywhere I choose. this is either DRM free or Kindle if Amazon does it right. top eBook preferences: reasonable pricing, wide selection, and interoperable. remember consumers win. the top searches on medialoper.com are "who do I remove DRM" and it peaks on Christmas day.
to the consumer if Amazon makes Kindle books work on everything, then that looks like open to them. to the publisher though you are locked into one distribution partner.
"We used to fool ourselves, we used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won."
-- Bronfman CEO Warner Music
No comments:
Post a Comment