Welmer

The declining profits and looming failures of newspapers and record labels have launched a massive effort to figure out how to make money off digitized content, which is so easily copied that it seems impossible to control. Some software companies have been looking into Digital Rights Management technology (DRM), while music labels have been using the blunt hammer of the law to quash file-sharing. Personally, I think this is the wrong approach. As a friend mentioned yesterday, DRM is widely despised, and I am not at all thrilled about the idea of having to use a Microsoft application to view or download online content. Therefore, I propose another solution: stop trying altogether. Content can and will be copied no matter what we do about it. In fact, this has always been the case, and it only seems otherwise because there was a relatively short period of managed content production from the early 19th to late 20th century.

So if companies, musicians and authors stop trying to protect their content, how are they ever going to make any money? The answer is as simple as it was when people first started selling newspapers: you pay to make the content accessible to consumers. Newspapers didn’t take off as a content delivery system until they were subsidized by advertisements, which allowed for a far broader circulation than ever before. This hardly needs to be mentioned, because media companies are currently frantically attempting to squeeze revenue, including advertising revenue, from the internet, but it demonstrates that they are reaching for a pot of gold (audience/readership) on the other side of a raging river of free-flowing information. The approach they are currently taking is to either (a) dam the river, or (b) throw in more content in the hope that the readers on the other side will draw some of it along with all the other information. Both approaches are doomed to failure.

What I left out of the previous paragraph is what was being subsidized to make the content available. What it really came down to was paper. People were being given value-added paper. Thanks to the original Chinese invention, and then the Industrial Revolution in Europe and America, mass production of paper made it possible to commoditize information. Earlier, however, even as an information economy started to take root due to the proliferation of printing technology (roughly analogous to the proliferation of the PC), widespread copying of material became easier than it ever had been before. Printers enjoyed a de facto monopoly on all written works, and until the Statute of Anne was enacted in 1710, authors had little to no control over their intellectual property. And even after that in the colonies, English works were routinely ripped off by American and Irish printers, and the Scots flooded the English market with cheaply printed material. Because European ideas had a profound effect on American politics, it could be said that the seeds of the American Revolution were sown through the piracy of intellectual property.

So what was it that eventually allowed the development of the media juggernaut that defined the 20th century? If anyone with a press could print and copy material, how did newspapers ever take off? The answer lies in the economies of scale that developed in the 19th century. In Ben Franklin’s day, there were plenty of small, widely-distributed independent printers, but less than a century later there were huge print factories owned by publishers that could flood a market with paper and ink. By the 1840s advertising could pay to put these papers in the hands of the public for a very small fee, and the vast turnover of information and paper spurred the development of an information economy that paid for itself. It was no longer really necessary to regulate the small printers, because a large printing operation could produce intellectual property in such prodigious amounts and make it so easily available that there was no longer any real profit in piracy. Even today we have some relics of this system. Offset printing runs produce so many books that only a fraction are ever actually sold. In fact, warehouses across the country are filled with books that will never be read.

One could say that today it is so easy to copy and distribute information via PC that no advantage could be gained from an economy of scale, but I disagree. The PC is actually kind of a cumbersome machine with far more capabilities than the typical person needs. The hardware companies have made a killing by suggesting that everyone who wants to use the internet needs a PC, but that concept, thanks to mobile devices, is starting to fade. With advances in e-readers, there may soon come a time when most people do not want a PC, but instead would prefer a cheaper, more convenient reader with some of the functions of a PC. There remains the problem of getting people to buy these readers, but I think here’s where a page should be taken from the 19th century revolution in print media. Just as the price of newsprint was covered through advertising subsidies, so could the price of a reader be greatly reduced if the companies selling them made money off the content people read online. People selling ebooks online could hand a percentage of their sales over to the hardware company that manufactured the reader in return for secure content delivery, and the same could be done with subscription-based companies such as the NY Times. Additionally, a subscription to a wireless high-speed connection could further subsidize the hardware. Ultimately, I can imagine readers that have all the functions that most people use on a PC selling for perhaps 10% of the price of a PC, bundled together with a monthly wireless connection and a subscription to an online content provider of one’s choice. Giving consumers cheaper, more convenient access to content could prove to be very profitable in the long run, and the hardware could easily be built to prevent widespread piracy. Of course, people would still be able to download free content where available, but how many publishers would offer it for free if they could charge for it?

For those who are separated from consumers by the raging river of information, the key is not to try to stanch the flow or jump in the river, but rather to build a bridge to the consumer. That bridge can be built with technology and an economy of scale possessed by hardware manufacturers. Those of us wedded to the PC (such as myself), will continue to have plenty of open source options available, but your typical consumer simply won’t bother, because the typical consumer is not all that interested in scouring the internet for hours for free copies of material when they could easily buy the same for a pittance on a mobile reader.

Perhaps the biggest danger of this would be the development of content monopolies, so it would be important to pass legislation forcing hardware companies that also perform content delivery to open their services to anyone who wishes to sell content online. It would be unthinkable to allow media conglomerates to enter into partnerships with companies such as Sony with the intention of denying competitors the option of selling content online, which would defeat the purpose of a new content delivery system and in all likelihood kill it in its infancy.

The means to make online content profitable already exist, and within a few years will probably become widely accepted. I, for one, look forward to that day, because then, finally, the newspapers will stop blaming their failures on the internet and start looking inward to find where they went wrong.