I’ve never been big on lumping generational groups together and calling them ‘X’, but I am fast realising that I belong to a generation of media junkies.
Back when we were kids we watched what was on television when our parents said we could watch it.
Then came the internet.
And we spent our time feverishly chatting to people, we Googled up a storm and we broadened our horizons. As we began to explore the possibilities offered up by the internet we, as a generation, became obsessed with content. We wanted it all and we wanted it now and we wanted it from our ‘friends’.
As a generation we are not satisfied to wait until an artist’s CD, or the new movie we’ve been dying to see hits the shelves in our local stores. We’re not inclined to stay up to watch the latest great TV series – and we’re definitely too busy to remember to record them (Tivo shmivo). We want them now.
And where do we get them – online.
Audiences across the world have turned to the internet for entertainment via P2P sites: it’s fast, it’s instant, it’s accessible and it’s the norm but in most cases it’s not actually legal. To many consumers it’s unfortunately not a question of legality - it just is what it is and we love it.
Effects of Piracy on the Entertainment Industry
It’s not as easy as you would think to track down the latest facts and figures of the effects of online piracy on the media industry but just to give you a ballpark idea of what they are facing:
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The music industry: Approximately 20 billion illegal downloads in 2005 which equates to $4.5 billion of pirated products.
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The film industry: Lost $18.2 billion to piracy in 2005 and the ripple effect has caused a total loss of output for US industries of $20.5 billion per year.
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The television industry: Faced a million illegal downloads per episode of many popular TV shows in 2006 – I’m sure the advertisers weren’t too thrilled about that.
Ethics aside, by using P2P sites to get the content we love we might be shooting ourselves in the collected foot. In February this year the Times Online reported that the British Government was in talks with ISPs to ban users suspected to be ‘wrongly’ downloading films and music
With global music sales, big screen traffic and at home audiences dropping year by year the effects on the industry have become quite clear. The music industry was the first to recognise that if you can’t beat them you better join them. Well… kind of.
DRM software was the answer to the plight of the music industry. DRM stands for Digital Rights Management and refers to technologies being developed to limit usage of digital media. In many cases it also means that restrictions are placed on the devices that can be used to consume the media.
But, DRM has never really embraced the real issue - namely that P2P is about sharing. Sure it not only provided the industry with a solution to piracy but with a new revenue stream (one which now accounts for the fastest area for growth in the music industry), but it ignores the open and social nature of the net that so many P2P sites embrace. Apple’s FairPlay is a good example: ‘Consumers’ get to purchase music from the iTunes Store and listen to it through iTunes. But they can still burn CDs or give the music to your friends - and each time this happens it equates to lost revenue. People find ways to share cool stuff.
So maybe it’s the media industry’s revenue model that’s the problem? Or maybe their online revenue models are restricted by current DRM technology which offers ‘solutions’ that limit our ability to freely share our content (that in many cases we have already paid for) and so drive us back to the good old P2P favourites.
The Solution?
Wired editor and author of The Long Tail, Chris Anderson has been touting some really interesting thoughts around the idea of ‘Free’. Basically he embraces the concept that giving things away for free can still lead to massive profits and this kind of thinking definitely has a place in the debate around P2P and piracy.
Anderson provides a number of examples that illustrate this, and anyone who likes music and the internet has heard of the ‘The Radiohead Model’.
In 2007 Radiohead gave away their new album ‘In Rainbows’ online and allowed users to pay any amount they think the band deserved with no obligation. As we know, this increased awareness and promoted ticket sales for concerts and made them a lot more money than they would have if they had followed the traditional route.
This was a great example of the idea of giving away something that has a marginal cost approaching zero (distribution of media online) as a method of marketing something else (concert tickets and merchandise). Think Gmail’s mail storage and the advertising that goes with it.
With today’s technology the distribution of another Radiohead song costs nothing, but the additional concert ticket and merchandise that could be sold as a result would bring in hundreds of Dollars of revenue.
The ability for individuals to share a product at no cost with their friends has the benefit of amplifying consumer sentiment and we all know how valuable consumer generated praise is in boosting the credibility of a product (or content). And of course the more it’s distributed the more opportunity for advertising to be seen. This is where I think it gets interesting for the media industry.
If there is an abundance of the product you’re selling, give it away and then sell this space to advertisers. Simple, but not without the right technology.
New technology is being developed that embraces and enables this model of media distribution. TV networks have begun experimenting with delivering content to their online audiences themselves in an attempt to circumnavigate the illegal sharing of their shows on P2P sites.
Whilst this is a very new and fresh approach to dealing with piracy it seems as though it will be a successful one. Australia’s Ninemsn is one of the pioneering networks in this field.
By utilising a new DRM technology (Hiro) two of their popular shows, and obvious favourites of mine, Canal Road and Sea Patrol are currently available for free download. This technology allows viewers to watch the shows on their own computers, when they feel like it without having to pay a cent or feel guilty about what their actions are doing to the industry – and that’s why us media junkies love it.
This cutting-edge technology is putting a positive spin on digital rights management as the problem with DRM is that it presents a system of software ‘locks’ that can prevent a file from being shared. This makes it hard to pass a purchased TV show to your friends. What’s exciting is that Ninemsn is embracing the spirit of the internet and its open and free nature. And it’s this concept of ‘Positive DRM’ that has us, a generation of passionate internet users, really excited.
The networks have accepted the fact that we are getting our content online and they have provided us with a tailor-made solution. Not only do we, the viewers, reap the benefits but the Ad Men – the ones effectively paying for the production of the shows - are once again smiling. Their marketing messages are no longer being lost, in fact they are able to target them perfectly – as publishers can decide which countries will have access to which shows.
Online file sharing on illegal P2P sites is rife and technologies such as this one being employed by Ninemsn (and I am sure many other networks will jump onboard soon) is finally giving us media junkies a way to watch our favourite content, when we want to, where we want to and in a free and legal manner!
We have been absolved!
