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Archive for January, 2008

On UK Internet Regulation

January 30, 2008 Leave a comment

Some people think that the Internet should be regulated along national boundaries, but others prefer to see it as a truly global application that must transcend such anti-progressive limitations. Like religion and politics this always makes for some heated arguments especially when DRM is thrown into the mix.

Last week, the BCS Internet Specialist Group held an evening seminar on the effects of Internet regulation in the UK. This talk featured a speaker from the Open Rights Group (ORG), a UK based civil liberties advocacy group similar in style to the Electronic Frontier Foundation (EFF).

The speaker and ORG’s Executive Director, Becky Hogge, did a great job explaining what ORG does, why it exists, and whose interest it serves (i.e. yours and mine). She then went on to host an interactive session with the audience which offered up some good debate and thought-provoking points of view ranging from defamation law and “Cease & Desist” orders; to the delicate balance between protecting civil liberty (e.g. the right to privacy) and criminal activities (like child pornography and digital piracy).

As you might imagine, DRM was not spared any quarter on the latter issue, and was held up as a prime example of industrial strength skullduggery employed mainly by greedy incumbents attempting to hold on to fast declining market leadership, or oligipolies. But what else is new?

Overall this was a most entertaining seminar, even though it did not fully answer the above question of how and where Internet Regulation should be crafted and policed. I thought the consensus was leaning towards a bit of both (i.e. national and global regulation, as the situation demands) but I may be wrong. Do you have another opinion on this matter? If so, please share with us.

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Free as in Free – Really!?

January 25, 2008 Leave a comment

More authors are now looking to give away free electronic copies of their works. Is it all just a gimmick or will the publishing industry be the first to ‘see the light’? Just what the hell[o] is going on?

Professor Lawrence Lessig, a Stanford professor and renowned author / advocate on Copyright and cyberspace, has just made his fourth book free to download under a Creative Commons license.

Now this may not sound like such a big deal given his enlightened stance on these matters, but it appears that the idea may be catching on. For example, in January 2008, Charles Sheehan-Miles, an author and Gulf war veteran, made his book ‘Republic‘ free to download (right alongside the Amazon.com order information and links) on his website.

Another author, David Parrish, has also made his creative business book, free to download from his website.

In both cases the authors rapidly came to the conclusion that they would rather face piracy than obscurity, and appear to have implemented this strategy with the underlying, and contrarian, hope that it could actually end up making them rich (now where have we heard that one before?).

However, concrete proof of this outcome may well exist in the shape of author Paulo Coelho according to thisslashdot article. This trend seems to be accelerating, and publishers (at least in the above examples) appear willing to give it a try.

Perhaps other content industries should borrow a leaf from them and give this model a chance. However, I do wonder what would happen if this became the norm. Will anybody still buy books, and how will publishers make any money in the meantime?

I would really love to get your comments on this, so get writing.

EMI vs. HMV: two sides to the same coin?

January 18, 2008 Leave a comment

Given the recent announcement of impending job cuts by EMI, as well HMV’s record Christmas sales, one wonders if such seemingly opposite outcomes give a true reflection of the ailing music industry. Are these two companies still in the same boat?

Yes and no. This is because although the fortunes of both organisations are firmly based on music sales, the differences between them are much more revealing. For one thing EMI, as one of the “big four” global record companies, has operations that cover the whole music lifecycle (from creation to publishing, marketing and distribution), based on its catalogue of recorded music and a host of record labels and artistes. HMV, on the other hand, is mainly a retailer dedicated to shifting music products from all big four record companies, as well as an impressive stock of other entertainment products like DVDs, games and accessories (it also owns other brands like Waterstones the book sellers).

Therefore the strategies adopted by both companies to deal with disastrous climate change are by necessity different. For example, the purchase of EMI by a private equity firm last year set the focus on cost and profitability measures; in step with the realities of a changing sector business model (i.e. moving from CD sales focused business to a holistic revenue model that will cater for other income streams).

This announcement is no great surprise. However the reaction by some of label artistes is interesting if only because it echoes the issues raised in an excellent article by Paul Byrne which identified six models that defined the changing artiste – industry relationship as follows:

  • Equity Deal – The label or equity partner owns everything for a price (including the artiste and their outputs e.g. EMI / Robbie Williams)
  • Standard Deal – The traditional arrangement where the label picks up the bill for the album (including production & distribution etc) and owns the copyright to the work, but pays a percentage royalty to the artiste
  • Licensing Deal – The artiste retains copyright but grants exploitation rights to the label for a period
  • Profit-sharing Deal – The artiste gets limited advance producing the work, but gets to share profits with the label which does the promotion and distribution etc.
  • Manufacturing and Distribution Deal – the artiste relies on the label for manufacturing and distribution only. She does the rest herself.
  • DIY method – The artiste owns and does everything, but gets to keep all the profit (many new, independent music acts go this route when starting out)

Record companies are having to go very lean in order to survive. HMV’s record results may be attributed to the traditional Christmas bonanza for retailers, (I for one am guilty of adding to their fortunes in my own small way), but to be fair they had undertaken to reposition themselves as a retailer of choice, both on the high street and online, and this appears to have paid off. So no great surprises overall, the music industry is still in turmoil albeit showing signs of bottoming out and heading for modest recovery in the near future circa 2010.

The best approach to this Promised Land however may be to harness both physical and digital products and channels to market in a way that makes the best use of their particular strengths. Of course this is easier said than done, but I’d be very interested to hear your suggestions, if you had the opportunity to lead one of these organisations?

Categories: BCS, business model, Music

All hail the militant creative stakeholder

January 9, 2008 Leave a comment

Now that 2008 is well and truly in full swing, I’d like to kick things off by looking at the phenomenon of militant creativity (or lack thereof). I am referring to the on-going strike action by the Writers Guild of America which seems to have Hollywood by the short hairs. Is this a sign of things to come within other creative industries, and more importantly will it also happen over here?

Early 2007 brought with it the signs that major record labels were finally ready to get ‘DRM free’ with their digital repertoire, likewise it appears that 2008 may be the year in which the major motion picture and TV studios will get their comeuppance (and by no less than a miserable bunch of the great creative unwashed). Hah! Wonders will never cease. As ever, the main bone of contention is money – what other bone is there really?

The saga started in late 2007 when the Writers Guild of America (WGA) decided to take strike action over their percentage earning from DVD sales and, perhaps more significantly, their demand for a share of potential profits from other distribution channels (including Internet and mobile platforms).

Guardian Unlimited article provides good coverage of this disagreement and points out why it may not happen over here in the UK, (the Writers Guild of Great Britain have already negotiated a satisfactory deal), but it also hints that the writers strike may only be a harbinger of similar action by other creative stakeholders (think actors and directors) for much the same reasons.

Although the WGA have now negotiated specific deals with a couple of production companies (e.g. United Artistes and WorldWide pants), the strike action has already had severe repercussions on the flow of US TV and Film production / programming, and it now threatens the awards season with the cancelled Golden Globe Awards ceremony as its first casualty. This clearly illustrates how a key stakeholder group can easily upset the apple cart when its needs are not being addressed in the new content economy of the digital distribution.

If this trend continues and spreads to other creative stakeholders in other industries we could witness a rapid transition to a new status quo where power belongs to those most willing to wield it, and perhaps a more equitable relationship between creative and commercial stakeholders. Dare we hope for this outcome, and what would it mean for the future of content creation?

Categories: BCS, behaviours