The next media economy

I’ve been thinking a lot about how we buy and consume media (music, movies, TV, books, news, video games, sports, etc.) and though it’s a far cry from the regular topics on this blog, and I’m pretty sure that none of this is new, here’s my take.

You see, it’s a pretty important question. For one thing, the media industry is huge. We spend a LOT of money on entertainment. But even more importantly, media of various kinds is where we get most of our stories. Much of our perception of the world is shaped by the media we access and how we access them. So media matters.

The big shift that we’re seeing right now is of course due to the internet. All media are increasingly being freed from physical constraints. You no longer need the physical CD, DVD, TV antenna or paper book. You can get it all on one device: Your computer. I know, I know, it’s completely obvious, but bear with me.

I can’t say exactly what the next media business model will look like, but I still think we can say some things about it. This is kinda like one of those mathematical proofs, where we don’t know the actual solution yet, but we can still say some things about it. So I predict that any future media economy will have to live up to the following criteria in order to achieve success:

No distinction between streaming and downloading
The distinction between streaming media to a computer and downloading it to that computer is essentially spurious and all attempts to enforce that division are non-sensical and doomed to fail. I know that the owners of content feel safer with streaming, because that allows the fo feel that they still “own” the content, but once the bits have passed through a computer, it’s the owners choice whether they remain on that computer. Witness the several tools available that can take eg. a realmedia stream and save it to the computer.

Easy to share
Once I have the media on my computer, they must be easy to share between devices and between people. If I download music, I want to be able to play it in my car, on my pocket mp3 player, on my stereo, in my summer home and on my vacation. I also want to play it when visiting a friend. Or at a party. Sitting at my friends computer, I want to be able to call up the ebook I’m currently reading and go over a section of it with her. On the train on my way to work, I want to view the episode of my favourite TV-show that I missed last night.

Transcends media brands
The succesful system will transcend brands. There won’t be a Disney system and a Sony system. There will be just the one system, from which I access and purchase media.

Cheaper
The succesful system will also be cheaper than what’s available today.

Priced on consumption not access
When I buy a CD today, I take it home and put it on the shelf with the others. I can play it whenever I want, but I’m essentially paying to have access to it. Apples iTunes and most current online music sites work in the same way, except that you buy individual songs rather than whole albums.

I predict that the succesful system will instead base pricing on consumption. That it will make thousands of CD’s available to me, but will bill me according to how much I actually consume.

Offers more options than the old model
Whatever I can do with physical media I can also do in the new system. This is contrary to many online media offerings where you can actually do less. For instance, if I buy a CD I can take it with me wherever I go and sell it or give it away.

The solution for the media industry then, is not of a technological nature. It’s not a matter of finding the right unbreakable encryption to enforce current copyrights. It’s a matter of finding a new business model, and that business model must live up to what’s written above.

Why? Well, that’s very simple: The next media business model will from it’s very inception be in competition with a system that is already rather succesful, is constantly growing and which offers all of the above. This is of course the shadow economy. Pirates, Kazaa-users, bit-torrent clients and other downloaders. These systems are used by millions of people, use almost no advertising and still manage to grow like wildfire.

I predict that there’s a huge pile of money to be made from this new business model. It will have to be made differently from today but it’s there none the less.

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