The content industry is worried about distribution becoming free. This is a global phenomenon. The more broadband we have the better devices, the more the push towards sharing without payment is clearly there.
BBC News in their yesterday’s Q&A, Internet Piracy Plans highlights the principal issues:
The creative industries estimate that six million people in the UK regularly file-share copyright content without permission, costing the industries revenue that they cannot recoup.
In 2007, an estimated one billion music tracks and 98 million movies were shared illegally. A report by analyst firm Forrester recently reported that 10% of all internet users in the UK share files illegally. The figure for Europe is 14%.
Will banning persistent file-sharers work?
The creative industries believe illegal file-sharing is almost endemic while the government has set a target of reducing the problem by at least 70% in the next two or three years.
The difficulty is that the problem is a moving target. More persistent illegal file-sharers are already beginning to use software which masks their IP address while online, and the files being exchanged are encrypted, so it is harder for ISPs to use DPI technology.
Stephen Garrett from Kudos, the firm behind Spooks and Ashes to Ashes, warns that illegal file sharing threatens the existence of hit and quality TV shows.
… On the other hand, the content industry has, to a very large degree, refused to license the content in so many new ways that are being asked for, starting with imeem and YouTube, and MySpace originally. The refusal to license has essentially created a vacuum to where everyone rightly then also says if we can’t actually do it legally, we have two choices which is to quit or to do it without permission. Then you have companies like imeem and MySpace and YouTube initially doing it without permission.
…The discussion about solving this problem with technology is nothing but a fig leaf because it will never work. In a democracy, it’s not actually technically feasible. If you imagine this, then I get disconnected from the web for downloading and I go to my neighbor and use his Wi-Fi.
….It’s basically not a technology problem. It’s a structural and licensing problem. It’s basically a business problem. Whenever you try to solve a business problem with technology, like we have with DVD region coding, and those kinds of things, you end up really going against the consumer and sacrificing things that otherwise the consumer will hate you for.
The key question really is this; does any of this make any money for anyone? Does kicking people off the web because they have downloaded without permission make any money for anyone?
At the heart of Yakob’s thesis are two ideas:
1) As more consumers produce content, traditional content monetization models (paid, advertising) are challenged. Because digital content is platform agnostic (no distinction between video, news, articles – it’s all content online) it creates room for different monetization models based on context and consumer desire.
2) Align servicing next to content: iTunes has been successful because it made buying music simple and cheap enough. Youtube is experimenting with a new monetization model by allowing users to offer high-quality downloads of videos for low prices.
So is Content 2.0 Content as a Service…
The leading social media company, Demand Media seems to think such wise and offers it.
The company is currently the 15th most visited property in the US according to comScore. Demand Media has created more than one million pieces of content (artciles and videoas), making it one of the largest producers of content on the web today. The content is distributed to an audience of more than 80 million via Demand Media’s network which include LIVESTRONG.COM, eHow.com, Trails.com, Golflink.com and others.
Demand Media seems to have found a new stable and profitable business model, that fits into consumers’ video on demand needs. Here is an extract from a great article published by WIRED MAGAZINE explaining the Demand Media business model:
Volume is also crucial to Demand’s top distribution partner, Google. The search engine has struggled to make money from the 19 billion videos on YouTube, only about 10 percent of which carry ads. Advertisers don’t want to pay to appear next to videos that hijack copyrighted material or that contain swear words, but YouTube doesn’t have the personnel to comb through every user-generated clip. Last year, though, YouTube executives noticed that Demand was uploading hundreds of videos every day — pre-scrubbed by Demand’s own editors, explicitly designed to appeal to advertisers, and cheap enough to benefit from Google’s revenue-sharing business model. YouTube executives approached Demand, asked the company to join its revenue-sharing program, and encouraged it to produce as many videos as possible.