My Tuesday with the World Economy Forum
Well, that was an interesting way to spend a day!
For reasons beyond my ken, I got asked to talk to the Entertainment and Media section of a World Economic Forum meeting in NYC on Tuesday. How could I say no? Besides, the organizers are completely charming, open-minded, smart people. (Thank you, Alex.)
Dinner the night before
The event began with a gala dinner for all the assembled industries, held on Governors Island in NYC. From 800 yards away, the bottom of Manhattan looks like a really bad idea, an experiment in how much weight you can add until a land mass will sink.
There were about 75 people in the tent, about 90% men, and almost all white, with a few Asians and a dark face or two. Although the invitation said this was informal and men need not wear ties, just about every man did. Also, apparently you can’t have too many cufflinks. I was easily the worst dressed person there, which does not make me happy; I don’t like to be conspicuous.
During dinner (great wine, by the way), two panels were held. The first was on the economic situation in China. The highlight for me was hearing Li Lu again. Lu was one of the organizers of the Tianamen protests, and now is a VC. I had the honor of spending some time with him at PopTech a few years ago. On the panel, he first described the serious risks China’s economy faces and then he talked about the effect the Tianamen generation will have on China now that Jiang Zemin has ensured a peaceful succession. You only invest in China, he said, if you believe that the Chinese people will overcome every obstacle. And eventually, said Lu, the Tianamen generation will be in charge. Lu is an excessively modest hero, and a hero of mine.
This was followed by a panel on governance (= Sarbanes-Oxley), a topic that’s truly depressing. What a waste of time, paper and attention. I like locking up rapacious CEOs at least as much as the next person, but Sox seems based on the magical thinking that since rules limit risk, you can’t have too many of the cute little buggers. The Europeans I talked with are bemused by our punctilious bulwark against corporate evil, and are thinking that doing business with us is getting to be just not worth the paperwork.
The meeting
The next day, the Entertainment and Media group met in downtown NY. Thirty-five of us sat around tables formed into a large square. No PowerPoints, just discussion among senior people in the recording, movie and media industries.
The conversation doesn’t lend itself to detailed retelling. But it sure was fascinating for me. I came away with four overall impressions:
First, these people are thrashing. They’re floundering. They’re desperate to find a way in which their organizations still add value. They are in denial but, it seemed to me, they know that there’s just about nothing that the market wants from them. For example, at one point someone said, “Content is king.” I replied that judging from the content they’re producing, marketing is king; that’s where their real value is. Further, I said, on the Internet, connection is king. But then they want to know how to “monetize” connection. There’s nothing wrong with that, so long as you understand how monetizing it can kill it. The most convincing case I heard for real value was that only Hollywood can afford to make blockbusters. But beyond that…?
Second, they don’t understand what the hell we’re talking about. I can’t say that I made any inroads. To them, the Internet is a transport for distributing bits they own. Its lack of DRM is a hole that they will plug. They have no doubt that strong DRM is on its way and that it’s a good thing. (Cory could tell them.)
Third, they believe they’re responding to the market. They do not recognize that their market has abandoned them. They think that file-sharing is an aberration. In some unthought way, I think they actually believe that the legislation they’re back is something the market wants. They maintain this thought only by not actually thinking it out loud.
Fourth, they’re going to win. They own Congress and neither Congress nor the entertainment cartel sees any reason to compromise. Their Lakoffian frame tells them that they’re stopping theft, end of story. So they are going to kill the Internet and they don’t even know it. The worst of Larry Lessig‘s nightmares is coming true, at least in the US. Sure, there will be sophisticated hacks and analog holes and guys in back alleys with soldering irons who’ll remove the hardware restrictions so your kid can include a snippet of a movie in her social studies paper. But that’s exactly what losing looks like.
Depressed? You betcha. But then I think: That’s why G-d put Canada right there to our north.
These are smart people and I liked talking with them. They were willing to listen. Some, in fact, even agree to varying degrees. But they are riding beasts that are in agony, and the Internet will be a sticky stain on the bottom of their massive hooves.
We are doomed.
My pitch
I ended up giving a somewhat different pitch than the one I planned on.
I said that there was a huge gap in how this group understands the Net and how their customers do. (Yes, I appointed myself the Representative of the Net. So have a recall if you don’t like it.) We don’t mean the same thing by terms as basic as community, content, “consumer,” and something-else.
Then I described the End to End principle and how it’s enabled the Net to spawn an amazing marketplace of innovation. Tinker with the center and there can be disastrous unintended consequences. E.g., if packets contained bits that ID’ed the user in any strong sense, the Net would have been nought but a research library. (No, I don’t know that that’s true. Emergent effects are too hard to predict. It was just an example, and at least a few people nodded. Good enough.)
I said that I understand that to them the Net looks like a medium through which content passes, some of which people aren’t paying for. But, (sez I) their customers aren’t “consuming” content. We’re not consuming anything. We’re listening to music, We’re watching video streams, We’re talking with friends. To call it content is to miss why it matters to Big Content’s customers.
BigCon’s product, I said, is special. It’s published. That means it’s given over to the public for us to appropriate it, make it our own. We hum it, we quote it, we make jokes with it as a punchline, we get it wrong. We do that because it matters to us. And that’s how creative works succeed. They become ours in some sense.
Further, culture advances by our having the leeway to build on published work and incorporate it into other works. From The Star Spangled Banner to most of Disney’s feature length cartoons, that’s what we do.
So, we need the leeway, both to be able to continue as a culture, and — more important from their point of view — to continue to get value from what the Big Content folks produce. It’s our ability to absorb and reuse that gives their product value.
I ended by saying, perhaps too forcefully, “I’m here arguing for using this remarkable global connectedness to enable the flowering of culture the Internet seems born to provide…and you call me the barbarian?” I think it just alienated them.
I also made the stupid, self-indulgent error of saying that trying to “monetize communities” (the official topic of the session) was evil. Shoot, I’m in favor of monetizing communities. But, as the Greek doctor said, first do no harm. D’oh d’oh d’oh.
Luca Lizzeri has translated some of this post into Italian. Grazie!
Categories: Uncategorized dw
“kill the internet” –?? I’m sorry that doesn’t follow.
DRM will not “kill the internet” — hyperbole . Okay so a kid won’t be able to put a snippet of a movie in her social studies paper — how important is that anyhow?.
Makes some internet activities unpleasant. Stifles ….what exactly? Creativity? I don’t think so.
But then I don’t Tivo and can get by without music — and I suspect there are lots of folks in the same mode.
(I don’t like DRM, I will not own a piece of copyprotected software that requires authentication, readily abandoned TurboTax and will never Intuit again, so I’m stuck with old technology for a long time to come. So what, I use WordStar 6, ya in a Dos window on every Win OS thru XP. I’d be pissed if I paid $15 for a CD and couldn’t make a backup copy — but think of how many old vinyl albums I bought that weren’t backed up — the idea of a backup copy and the right to one is fairly recent.)
Johne, you have the right to be suspicious, sure, that is information in the marketplace. Some who claim that DRM is non-effective have the right to spread misinformation, yet another input into how we decide what we value. But a customer that approaches me with suspicion and spouting non-truths, and then maybe pirating my stuff… they get suspicion right back. Even if we disagree, it’s good to keep a conversation going so we can at least be aware of each others’ perspectives.
Schmooo… market behavior reveals a lot about people’s true preferences and values. The iTMS and shareware examples run counter to your claim of “we who visit the market”. Your attitude is less constructive.
Publishers are dinosaurs running out of oxygen. Everyone seems to think that art comes from publishers, and if publishers are finding things hard, well let’s all chip in (with an Internet tax) and divvy the money up among the publishers according to their output.
Forget the publishers (at least on the Internet).
Our art will come from artists.
Face it, there’s a world of people with a good DEMAND for art, and a wealth of artists with a good SUPPLY.
Believe me, they are not going to stare blankly at each other across a bottomless chasm wondering how they can convince the other to exchange money for art.
The chasm is what people imagine will replace the dinosaurs when they’re finally gone. That’s just fear of the unknown future talking.
There will be no chasm. Artists and audience will meet and do a deal. Art for money, money for Art.Everyone will be happy.
No need for a cockamamie EFF tax.
They’ll win as long as they control the system. It’s the system itself that’s been corrupted & no longer serves its intended purpose. That’s OK because we have at hand methods that are better than theirs. Call it self organization, emergent democracy, collective intelligence, the power of network effects, smart mobs, wise crowds, Coase’s penguin, transparent society, open source intelligence or whatever you like. We just need to realize their power & develop the tools to build a better system.
Tim
We are doomed…!
David Weinberger blogs his impressions from a World Economic Forum meeting in NYC earlier in the week. He was asked to talk to the Entertainment and Media section, and boy, he did not like what he encountered: …these people are…
Content is King/Content in Chains
This week brought a bumper selection of articles clustered at the intersection between Digital Rights Management, the plight of the major record labels, and Microsoft’s strategy for owning the digital media space. Two pessimistic, one mildly optimistic…
At its heart, this is merely a pricing problem and a matter of efficiency.
There is some price P(1) at which the rights holder will be more than happy to allow you to make as many copies as you like. There is another price, P(2), at which the consumer is willing to pay for a copy which cannot be copied or further distributed. And there is some third price P(3) at which the consumer is willing to pay for some limited reproduction rights.
As to the exact amount of those prices, well, the more “helpers” and intermediaries, almost certainly the higher the price.
What we are hearing from the entrenched bureaucracy currently in place is little more than a whole lot of weeping and wailing about the coming demise and untenable position of their status in the equation. They are sitting ducks for disintermediation and they know it, but are afraid to admit it.
On the one hand, the onus is on them to justify their value, not on the consumer to justify a lower price. Let’s face it, the consumer does not know who all of these people in the middle are. Hell, even the soon to be a millionaire, drug addicted guitar player does not know who all of these people in the middle are, and it is the artist who pays a far dearer price for their services than the consumer. For it is in the dimunition of compensation that the artist pays for their services. The more paid to the middle, the less the artist producer receives.
The middle controls the game, the terms, the production, the distribution and the pricing, a position that works only when no one knows the details. When everyone knows, they are out of business.
Now that said, if you don’t want to pay, then do so in a way that will be felt by the middle – don’t buy – not even the first copy to upload. Only by hitting them in the wallet will you make an impact. If they think you are simply going to steal from them, they will lash out with law enforcement in unpredictable ways (read: you might get caught).
If you are a consumer, and absolutely must have “it,” whether “it” is music or movies or whatever, then be honest with yourself about this sorry fact, and be a man! Prepare to pay the price of admission. If everybody stops buying, believe me, the market will change very quickly.
If you are an artist, wise up, open your eyes and look at your alternatives. You can cut a deal with the powers that be, or you can look at other alternatives. If you look for other ways to strike a monetary exchange with your audience, you will find one.
If you are in the middle, get real. The value of your services may be justified, but the way in which you are paid may have to change. You may have to give up control over key factors in the business. You may have to learn how to dimensionalize your pricing structure to accommodate P(1)…P(3)…P(n). You may have to learn how to coopt the pirates and convert them into sales people and/or distributors. You may have to contract for the artist to cut bonus tracks that are rights free and consider that a selling cost, thereby creating a legitimate class of content that is legal to distribute while continuing to enforce your rights on the balance of the material.
Or we can simply continue with the current scenario. It’s your choice. But, remember, there is a price for everything. This is simply a pricing problem.
In (short) future, the concept of money will be alien from human mind. As a consequence, the concept of price will too. A little bit of imagination would not be bad …
Or they can just rig the system in their favor, because they have the power & influence to write laws that protect their business model & punish innovation. As long as they can get away with doing that, they will. They have a hammer, so everything around them looks like a nail. Pound, pound, pound.
The solution is not to suggest better ways of doing things, because they’re simply deaf to anything we have to say. The solution is to design & implement new systems that give us a greater voice in government, using network effects, reputation systems, collective intelligence, wise crowds, smart mobs, etc. etc. Then when we have the ability to be heard when we say something, that’s the time to bring forth our proposals for change. Until then we’re shouting into the wind.
Tim
Here’s a start towards what I’m talking about: IPac, the Intellectual Property PAC.
Tim
Music to my ears
David Weinberger: My Tuesday with the World Economy Forum. These are smart people and I liked talking with them. They were willing to listen. Some, in fact, even agree to varying degrees. But they are riding beasts that are in…
David,
Thanks for triggering this dialog. It’s interventions like yours that results in a better understanding and ultimately advancement in these issues. Keep ’em coming.