Thursday, February 22, 2007

Nobody Ever Pays For Content

The Last People to Pay For Content

Many centuries ago, scholars might travel great distances and pay great fees to have access to the contents of a unique scroll or manuscript.

If the item was owned by some individual or archive, they may have had to pay a hefty sum to gain access to the content. In some cases, they were allowed to copy what was written in the scroll or manuscript. Either way, these scholars or researchers actually paid for content.

And they were last ones to ever do so.

Containers and Licenses

Nowadays, nobody ever, ever pays for content [1]. Not written content, not filmed content, not audio content.

Today, we pay for either of two things: containers or licenses.

When you buy a CD, you buy the container, not the content. Everyone kind of knows that, I think. And it's not because you agree to any sort of license agreement on the box, or anything like that. It's because of copyright laws.

If you work in some sort of broadcasting medium, such as the music industry, a radio station or a movie theater, you pay for license to rent, publicly present, and/or copy the content. You do NOT pay for "the content". If you pay for something, you own it. If you paid for content, you would own the content.

Access to Content

You might conclude, then, that we buy CDs and DVDs, go to movies, and so on, in order to get access to content. You buy a CD, because you want to hear the song. Therefore, you pay for the access to the song.

But you would be wrong. Nowadays, nobody ever, ever pays for access to content.

Every song, movie, or book created in the last ten years has been made available FREE by the very people who sell you these content containers. All you have to do is wait.

You can find just about every text ever written in a library or used books store. You can borrow them from a friend, or you can buy the book and then sell it for the same price.

You can find just about every song playing, for free, on industry websites, on video channels, on MTV, on radio, or again, by borrowing from a friend, or by buying the container and then selling it again. I listened to Shakira's song "Hips Don't Lie" enough times on Shakira's industry web site, for free, and without a license, to make me sick of it.

Their hope was that I would find it too inconvenient to listen to the song on their site, which would prompt me to go out and buy the CD. Didn't work.

Movies, TV programs, and so on are the same deal.

Now, some video channels and radio stations do buy access to the content, via licenses. They in turn send it to you for free by taking money from advertisers. But even they buy it at a premium price, not because they want access, but because they want convenient and timely access.

And if you think about it, all that's really happening is that the money goes from the advertisers to the distribution channels, such as radio or television, to the media companies. The distribution companies actually make money off the content, which can't really be considered "buying".

So, ignoring the middle man, advertisers pay to license content in order to use it to sell stuff. Real stuff. And that's all there is to it.

Convenient and Timely Access To Content

You buy a CD because you don't want to surf to the publisher's web site and search for the video, or wait for Pandora or the radio to play the song. You want to access the content conveniently, and timely. You don't want to have to share the access with your friend [2].

Believe me. There is no song that cannot be heard, about as many times as you want, for free, if you're willing to wait ten years.

The System is Breaking Down

The container manufacturers, such as the recording and movie industries, based their business around the balance between those people who are willing to pay for timely convenient access, and those who can wait. Those who can wait were never going to buy the access in the first place.

But now the system is breaking down. Why?

Because it is becoming more and more convenient and timely to share obtain access without buying the containers, even legally.

Where a used copy of a book or CD would once only be available to those serendipitous enough to find it, you can buy anything used, anywhere, and simply wait a few days for it to get to you. Then, when you're sick of it, you can send it out again, effectively paying nothing for it, except postage costs (if any).

And how about a P2P file sharing system which doesn't copy songs but transfers songs, in other words, erasing the source? If only 10 people need to listen to the song simultaneously, 10,000 people could easily share the song without any legal violations whatsoever. They simply pass the song back and forth, earning or paying a penny if necessary to keep score.

With thousands of television stations and less time to different markets, you can do the same with movies and television shows. Again, there is nothing in any current law that prevents you from watching the movie at a friend's house. Or lending the movie to a friend.

And Therein Lies the Problem

The "convenient access to content" business model is dying. It was predicated on a fact that is no longer true.

All the arguments you hear from the convenient container makers about copyright, fairness, artists, and so on is just so much garbage. What they are trying to do is not find a new market in which to make money. They are trying to change the laws to make access to content inconvenient again for you. Except for whatever models that they control.

They want to take away our ability to share with friends, because sharing has become too convenient. They want to take away our ability to resell content, because we found a way of making reselling convenient.

What Next?

If record companies want to make money off of access to content, they have to stop releasing videos and letting people hear the music on websites. It's just too convenient now.

They have to make CDs and tapes that are made from poor quality, which get destroyed after one or two uses. They have to make them work on only on systems that support only one pair of headphones.

In other words, they have to stop marketing the content, giving free access to the content, and severely downgrade the quality of the content.

Sound like good business to you? It doesn't to me either. All of these techniques will result in far less containers being bought.

But continuing what they are doing - selling bulky containers that are hard to acquire and use, based on the idea that this is convenient and timely access to the content - is a dying model.

An alternative approach is to make the access even more convenient and timely: instant access to great songs and video that play everywhere and are faster, cheaper, and more desirable than swapping with your friends or waiting for the song to come around again on the radio or TV.

Instead, they try all they can to get laws changed to suit their business needs [3]. It's like an electric company lobbying for laws to prevent anyone from manufacturing or selling a new and cheap little doodad that creates all the energy you need.

So much put effort into destroying our rights, rather than to work with new models.

Update: Apparently, Techdirt agrees with me.


[1] Well, almost never. People who commission works pay for content, and people who buy the rights to works pay for content. These people are not like you or me.

[2] You can make an illegal copy, of course, but I'm talking legally.

[3] Which they're doing pretty well, actually.


Anonymous said...

Thats really a pity.Artist are never paid unless they get 50000 copies sold.They created the art and they dont get paid.All money gets into advertising and brokers

Jason said...

Renting movies seems like paying for access to content.

When an author writes a book, the publishing house pays him/her for it.

Yehuda Berlinger said...

ashish: Artists are paid up front costs in the form of production and marketing. Unfortunately, they sign very bad deals for these gifts.

Luckily, artists can also get paid for many other things, such as merchandising and performances.

jason: My point was that renting a video is not paying for content.

The same video is going to be available for free to you on television in two years. So what are you paying for?

You're paying for a. timely b. convenient access to the content.

In any case, you are not buying the content, but access to it.


Anonymous said...


This was a really good summary of the issues surround licensing. It's a pretty confusing area to fully undersand. But, between your summary and Shelly Palmer's ("It's Time To Completely Overhaul Music Licensing!") I'm starting to make some heady.


- Jay