Thursday, June 11, 2009

The Internet Will Be Paid…

Or so some guy named Barry Diller says. I beg to differ.

Unless you've been living in a cave for a while, you've noticed that there's an ideological war underway around content. By content, I mean software, music, tv programs, movies, books, and any other piece of information or entertainment you can package. The war is between paid and free, closed and open, restricted and unrestricted. Did this war start with open source software? I'm not sure, but open source has definitely helped arm the conflict. Let's consider the content categories.

When you look for a software application or you need to perform a task with software, you can almost always find free software to do just about anything. In many instances, the free stuff is nowhere near as good as its commercial counterpart (e.g. GIMP vs. Photoshop). This reality keeps us software types employed for now. But the free stuff is still there, and sometimes it's good enough.

Then there's entertainment media sites like hulu, youtube, pandora,, and countless others that are supplying us with endless time-shifted and (mostly) free entertainment. Sure, it's not always in HD on your giant flat panel or in CD-quality through your audiophile stereo, but often it's good enough.

Switching to books, you can find lots of online material in Google Books or in any number of free audio book libraries. If you're looking for open college materials, check out MIT Open Courseware or the excellent collection of CC-licensed college lectures at Academic Earth. Wikipedia, The New York Times, and many other excellent sources of information are all open and free. Google alone is hell-bent on ensuring all content is in the open, whether people want it to be or not.

And this is all of the legal stuff. For everything else, grab a torrent client, search a database, and (in some cases) break the law to find what you're looking for. DRM? Forget it. For every smart group of engineers that implements DRM, there's another smart group that cracks it. It's a waste of money to even bother implementing it. Perhaps this is why Apple is dropping DRM from much of its iTunes library and why Amazon MP3 never had it in the first place.

Now consider Diller's claim: "people have always paid for content," and once this "accident of historical moment" passes, people will again be paying for it. Are you kidding me?! Um…you know that point in your life when some teenagers drive by in their car blasting music, and you think it's too loud…and then suddenly you feel really old? (Well, it hasn't happened to me yet, but I've heard of it.) Anyway, this is what it looks like when it happens to someone else. And at a Web 2.0 conference no less!

The open content ship has sailed. This content war is about a more fundamental question: the accessibility of information. And the challenge for all of our businesses—software, music, entertainment, publishing—is not about restricting access to content, it's how to support open or very inexpensive content while still making enough money to keep producing it. This is what progress looks like. Diller, you'd better crank up your stereo.


At 2:20 PM, Blogger Elias Volanakis said...

Hi Doug,

thanks for the interesting post.

I believe the software industry and the music industry share many parallels.

Things that scale easily and are digitally shippable are on the way to be free or very inexpensive. Music industry: free mp3s, free music videos on youtube, songs for 99c on itunes. Software industry: free software; access to downloads / sourcecode; inexpensive monthly subscriptions to web apps.

Things that do not scale or cost to ship are staying expensive. Music industry: live concerts, limited edition merchandise, hiring a band. Software: face-to-face access to experts & know-how, customizations, software written on-top of existing F/OSS.

Just my 2c,

PS: Another intriguing aspect is that web-apps are transforming the software-producer/consumer releationship from a one-off sales-focused thing to a month-to-month service oriented thing.

At 7:09 AM, Blogger Doug Gaff said...

Elias, I definitely agree about the music/software parallels.

I definitely see the subscription-based web app trend, but I do wonder how many different things people will be willing to subscribe to before they realize they're spending too much on software.

Consider now that we pay for Internet, Cable, and Landline when all we really need is to pay for Internet. Too many subscriptions will create monthly expenses fatigue, I think. This is why the subscription sales model is such a challenging business model, I think.

At 12:32 PM, Blogger Rich said...

People will accept forms of payment that they are familiar with. I watch all my TV shows online and legally because I don't really care about the advertisement interruptions as long as I can pause them to go to the bathroom, and as long as the mechanism doesn't screw up when it resumes the content stream (I'm looking at you, Fox).

Some of what I pay for is to support lingering inefficiencies in our communications network. I pay Skype $10/month so that I can call to my fiancee's cell phone in Japan at 16c/minute. And I probably could just cut my landline completely, but cell reception in my apartment is still spotty.


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