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I’m only partly in agreement with Pete. I do think that the idea of a flat rate is compelling and could be made to work within walled gardens of networks, but I don’t think it’s the only solution and I think it may be problematic because of the kind of comprehensive coverage it requires. But the key thing about it is that no one has seen it in action. Pete was trying to make it happen on the Isle of Man – obscure but possible. Now these folk appear a little tainted by their unfashionable tax-haven status. Away on the campuses of American universities, another old friend, the indominatable Mr Jim Griffin is hammering away with his Warner Music Group sponsored effort called Choruss which is an effort to bring the flat rate idea to reality in various forms in the ivy-clad self-contained networks of US colleges.
And they need to be prepared to remove some of the barriers that their current models require in order to discover what the future might look like. It’s not reasonable to expect start up companies or the (un)venture community to subsidise that effort when the power is in the hands of the incumbents.The only way to find out is to try some experiments at real scale with real consumers and real content. We need to create the conditions in which the content could be made available for pilot projects that would benefit both the content owners and the network operators. Over in the world of teleco’s, the network operators and wholesalers are trying to figure out how to build next generation networks. The Digital Britain report and debate has been full of the breathless excitement at the benefits that higher speed access will create.
My view is that we need smarter pipes not just faster ones. We need to be thinking about the software environments that will be at play on next generation networks that can be much more intimately bound up with the behaviour of content on the networks.
Around the UK right now, there are a nine or ten “next generation access trials” taking place for high speed networks – perfect places for pilot schemes of this kind to be run – safely self-contained, but large enough to produce meaningful results.
The simple technological truth is that digital media can be copied and no one can stop that happening. The only thing that content creators and distributors can do is to put speed bumps in the road. Global culture increasingly wants music, video, games, and software to be available easily, interoperably and preferably for free. Fortunately there is also lots of evidence to suggest that online consumers are interested in spending dollars on content online – especially if it is easy, the format is attractive and the experience is enjoyable. But nonetheless, the IFPI insists that 85% of traffic across internet service providers’ networks is attributable to illegal file-sharing. And of course, it’s over the music industry, by dint of its small perfectly formed file sizes, that the waves of the digital tsunami have crashed first and most violently. The recorded music industry has lost something like 30% of its value in the last eight or nine years – and at least some of that is down to increased internet file-sharing.
It’s not as if the legal fraternity has not attempted to address the problem. Stanford Law Professor, Lawrence Lessig has created a new framework which is designed to allow creators to permit others to use their work in non-commercial circumstances. There is an entire movement gathered now behind Creative Commons (CC) and its non-commercial licenses are visible increasingly, often from more philanthropic or public-service oriented media producers like museums and galleries, through to the TED-talks or new young musicians interested in collaboration like those who work is on sale from CC only store Jamendo. Ironically, although Lessig seeks to democratise certain aspects of copyright and enable a degree of legalised freedom of usage, Lessig’s licenses still depend upon a legal construct to impose some kind of control over the swirling, liberalising inevitabilities of digital technology. And so scary is the prospect of change that Lessig is regarded by the recorded music industry as some kind of pariah plotting the downfall of musicians everywhere. One senior record company executive whispered to me without a whiff of irony: “He’s funded by Google you know, there’s a massive technologists’ conspiracy to bring down the music industry”.
There are plenty of signs of how to begin to envision a culture in which music, games, stories, news, movies – are produced collaboratively and interactively. The games industry, the newest of the content industries and now the biggest, has also been the earliest to adapt. For example, the latest release of market leading game Grand Theft Auto – “the Lost and the Damned” is innovative both because it will be sold as a digital download only, but also because it comes in the form of a modified version of the previous release. The dramatic setting remains in the fictional Liberty City but the gamer gets to play from a new point of view of a different character with new story lines and new situations. For these recessionary times, this has the merit of saving RockStar Games, the developers, lots of cost on rendering new cityscapes and at the same time lets the gamer extend the previous episode from a new angle. In the case of Sony’s Little Big Planet Playstation game, released last year, part of the appeal of the platform is how it allows users to create their own levels and their own characters and allow others to play with them. So far, says Ray Maguire, SVP of Sony Computer Entertainment UK, there have been some 2,500 new levels created and over 2 million plays of them.
Until very recently the listening majority has been content to hear some meaningful music when they’re driving in their car or doing the washing up. For them, the world of interaction and collaboration seems remote, too much like hard work, not part of the couch-potato passive consumption they’re used to. But whether it’s in Little Big Planet, as we’ve seen, or in World of Warcraft with it’s current 11.5m monthly subscribers, new consumers are increasingly creators themselves. And the good news for the creators of these platforms is that people are keen to pay for the privilege. The same is visible in the massive popularity of games like Guitar Hero and Singstar where it’s all about the player’s active participation. The quality of creativity may vary but the model in which users interact and create their own elements in a game is more and more visible. The many thousands of video mashups on YouTube are further demonstration that this is a more common behaviour than you might think. Apple’s Garageband and other music creation applications like it are starting to attract the attention of lots of users at home and in schools. They’re beginning to level the playing field of music creation. Anyone can start having fun making music that sounds half decent – and from there it becomes something else and quickly can belong to everyone else too. Try listening to all the various re-mixes of Radiohead’s track Nude that their fans have submitted to the band’s website or the one they’re opening for remixing currently: Reckoner.
For the most part, rights companies like games publishers or even software creators like Apple, still try to retain a lot of control over their users’ behaviours. They tether the games to the platform devices and, only a year ago Apple was still adding its own form of copy protection to music on iTunes so that it could not be played outside their platform. The decision to cease doing this and the major labels’ agreement to remove digital rights management (copy protection) from their files on iTunes was an acknowledgement on their part that the system did not work and that it inconvenienced people too much. So even as they protest and lobby to try to protect their version of the copyright system, their commercial actions suggest that they are starting to understand how broken it is. The recent decision by the BPI and the RIAA to stop suing consumers for illegally downloading music is a further indicator that even the rights owning companies recognize the damage they are doing to themselves of going against the flow of where new active consumers and the internet are going. This does not mean the end of creators’ rights but it does demand big changes in the mechanisms for applying those rights. (It’s all about the meta-data stupid!)
Of course, there’s still loads to figure out. Even the leaders of the pack, YouTube and Facebook, are still experimenting with how best to make real money out of the relationships they enable between “friends”. Some of the more extreme or innovative new businesses like Twitter, MusicGlue or MusicMyne are emerging despite their economics not because of them. Different sectors are at different stages and will respond in different ways. Amazon has launched the updated version of its new electronic book reader. The Kindle 2, released this month and the Sony eBook reader are the beginnings of the breaking of the digital wave in the book world. eBooks currently represent a mere 0.01% of total book sales, but their year-on-year growth for the first nine months of 2008 was over 55% while physical book sales declined by some 3.8% in the same period. In November the growth was over 100%. The book has tremendous enduring characteristics that suggest it will never vanish, but eBooks’ growth suggests that, albeit slowly, even the stuffy world of book-publishing is opening itself to the opportunities of digital distribution and ultimately collaborative interaction.
For some, it all looks too much like a medieval, lawless, anarchic world in which the rich and strong, the famous and the corporate survive – and everyone else rips each other off all the time and flounders in the mud. But our current copyright fixation on the ur-text is antiquated. Instead, we will find ways to be engaged by the conversations that the work provokes, by the paths its super-distribution takes, the iterations that it undergoes and the interactions it provokes. This implies a totally different model of consumption as well of production of creative works – and one that we already have glimpses of in our blogs, Twitter, the music mixes on MySpace, the video mash-ups on YouTube and mod-ed (modified) video games posted on game sites all over the web.
So does this mean that there will never be any masterpieces ever again? Does this imply that a fixed and perfected work of genius will never emerge as the must-read book or the must-see film or the must-listen album? Of course not, we live in a highly individualistic, even fetishistic, hero-worshipping culture. We will always crave that defining statement, the single authoritative view, the unique voice of the star. Just as newspapers, radio and television have not been superseded by websites, so digital culture will only be enriching. But however detached, crafted, manicured and “finished” a work may be – if it’s digital, it is appendable, amendable, adaptable too.
Of course, the range of opinions among different artists about how to respond to technological and business challenges will be as diverse as are the artists themselves. But the underlying principles of a desire for transparency and for fair-dealing in the commercial aspects of making and selling music – and the desire to maintain personal ownership of their creative output – are incredibly strong unifying factors which bind together the interests of new and established acts.
There were unsigned bands who expressed real concerns: “If we sign up for the FAC, will that put our relationship with a major label under threat?” asked one new act about to sign a recording deal with a major. From the organisers of the FAC that was certainly not the intention and by the sounds of the welcoming comments from the BPI, it was not the view of the labels either. But there was also a real hunger for guidance and advice on a wide range of topics from navigating the digital landscape to contract reviews to advice on selecting a manager. The arrival of the FAC will be a tremendous enlightening and progressive force in the industry and should quickly be able to get to a point when it can act as an authoritative guide and give bands a chance to take a step back and reconsider their options. The FAC has the opportunity t0 offer real advice on approved alternatives to artists so that they can make informed choices about whether they want to sign to a label, go via digital distributor platform or set up their own site to sell to their fans.
Much has been said too about how the FAC will negotiate rights for its members and seek to take a seat at the table with the major players when deals are being struck. It will be interesting to see how the strengths of the organisation can be directed to best use in this area. Some companies like Myspace Music have been cautious in their response to first soundings, while others like Nokia welcome the direct involvement of artists and the creative community in what they’re doing.
There is lots of work for the FAC steering committee to do right now, including hiring a staff to turn these aspirations into reality. So wish them well on this journey, music should be the better for it!
Here in the UK, the assertion of the need for “universal access” is one of the key needs to achieve what Carter identifies as the best possible outcome from Digital Britain which is Digital Governance and the digital delivery of public services. And this laudable aim, then leads us quickly into needing to discuss the future of public sector broadcasting in the shape of Channel 4 – and strangely leaving the BBC quietly out of the scenario for change.
Lord Carter said today, speaking publicly for the first time since the publication of the report, that he hopes the effect of Digital Britain is to help set an agenda that will re-boot the economy both through public sector investments and private stimulus so that we could replace some of what we became over-dependent on in the Financial Services sector with what we might become grateful for in the digitally revitalised creative industries. There is a tension here between the public and private agendas and it is similar but crucially different from a tension in the US’s net neutrality debate.
One of the arguments at the heart of the Net Neutrality debate is about consumer desire to maintain a free and open internet which enables all users and all businesses to communicate, transact and share content without regulation as against an interest from corporations and ISPs to monitor and “shape” traffic and content and to offer various levels of quality of services to those that are prepared to pay for more bandwidth and accept more regulation. ISPs are stretched between a universal access model where they take no liability for what goes across their network and they simply create margin through scale (ie compete with each other for numbers of users and pricing), and more of an old-fashioned walled garden approach where their networks are restricted and the content that moves around them is more tightly controlled and where they can charge a premium for premium content – a kind of HBO online. It’s an unenviable model right now as consumer prices drop and infrastructure maintenance build-out costs increase. It would suggest that the need for content on the networks is going to be greater than ever. Yet, Virgin Media, for example have just failed to get an innovative new music service off the ground because they couldn’t find a solution to the demands made by the record labels who are all too desperate to retain their old ways of making money. It’s hard to see what the incentives are in the Digital Britain report to resolve these kinds of conflicts.
In the UK, the debate is too skewed towards public service issues and not sufficiently engaged in helping meet business interests and formulating viable forms of commercial stimulus. Instead of trying to figure out the balance between public interest, civil liberties and personal privacy as against commercial interest in innovation and in delivering new more profitable services, we are focussing on how best to spend the taxpayers’ pounds on public service provision and the surrounding dependency ecology of small production companies and programme-makers which Channel 4 was originally designed to stimulate. As a friend who is a veteran media buyer whispered to me this morning, as Lord Carter rose to speak “Nobody in the advertising industry gives a @#$%! about Channel 4, they want to know what Carter is going to do to help create real new sustainable businesses”.