An iPod-loving but non-techie old friend is going on a long plane journey this week and decided to buy some audio books at iTunes to ease the boredom of the flight. Ok so she connects to iTunes buys the books and disconnects from the store.
Next she tries to transfer the books to her beloved iPod only to be faced with an error message saying her computer is "not authorized" to use the books, followed by a series of instructions on what she could do to "authorize" the computer. Bear in mind that this is a computer she has for some time been regularly connecting to iTunes.
Faced with the terror of breaking her iPod and losing her content including her newly purchased audiobooks, she asks me to talk her through the authorisation process. We click through the various steps and get the machine authorized again and get the whole process rounded off with a message saying this is the second of her quota of five computers to use on iTunes. It reads like a '2 down, only 3 to go' warning... the clock is ticking on that collection of music, games, books, podcasts etc. and the great remote iTunes monster in the internet ether will determine how long more you are worthy of retaining access to that lovingly compiled (and somewhat expensive) collection you have assembled over the working life of your iconic personal media player.
How has the primary commercial outlet for digital content become so dysfunctional? A commercial outlet controlled by a tech company which essentially had no connection with the music industry 10 years ago, for example. Can you imagine in the 1970s buying an LP, bringing it home, sticking it on a record player only to be faced with a message saying that record player is "not authorised"? Then being instructed to ask the permission of the store you bought the record at to play it on your own machine? And finally being told by the store clerk, having graciously granted said permission, if you have jumped through the required hoops to their satisfaction, that you've had two written warnings about the equipment you use in the comfort of your own home and you better watch it because you only get three more chances before you're not allowed to play your records any more. Likewise with audiobooks on cassette or CDs in the 1980s or 1990s?
The online music industry is potentially enormous but the current obsession with micro control of access and use and monetizing everything on a 'per click' basis is killing it; (there was another report last week of a 15% drop in CD sales). The music industry is terrific at finding popular talent and selling it to the masses. It is also terrific at drawing attention to the talent it has to sell. As Tim O'Reilly says, on the internet the problem is not piracy, it's grabbing attention for long enough and getting noticed. The music industry hasn't yet managed to transfer their core competences into the Internet age, partly because one of its prior key competitive edges - control of the distribution chain - has gone and they are still mourning that loss, and partly because they are so heavily focussed on controlling the new reality with stronger laws and what some critics call 'broken technology' or built-in technological measures like drm. Apple is the main current commercial outlet for its music because Apple was the tech company with the iPod that the music industry turned to in its hour of need.
No one has 'cracked' the blue chip business model for online content yet but it will have to include:
- reasonable pricing
- ease of use
- guaranteed quality (including security, lack of malware etc.)
- consumer ownership and control
- jettisoning of drm and the 'monetizing every click' mindset
But the business model will get sorted out, competition will ensue and the online content business may well be bigger than it's pre-internet cousins. Existing content owners do have a big part to play in that new landscape as do the current and future innovators like Apple. But can we get there sooner rather than later please? Much though I enjoy unexpected calls from old friends, I'd rather the incentive for the call was not because that friend, who had actively sought out and paid for legitimate content, was concerned they were about to break their computer/iPod or their future incarnations with precisely that legitimate content. I know all the concerns about 'how are we supposed to compete with free' and the complex nature of the IP landscape still undergoing an upheaval of earthquake proportions etc. but remember convenience, quality and reasonable prices beat free every time. So:
Convenience + quality + reasonable price + consumer control = the killer business model