New Business Models in the Digital Age

My original plan for today was to do a post about the New York Times story on Wednesday titled "Quick Change in Strategy for a Bookseller." However, there was nothing new in the article so I'll let you read it on your own here.

Instead Teleread here pointed me to a more interesting item.

Mark A. Lemley, a professor of law at Stanford, has written a 15-page paper in draft form titled, "Is the Sky Falling on the Content Industries?"

In his abstract, Professor Lemley says:

This short essay traces the history of content owner claims that new technologies will destroy their business over the last two centuries. None have come to pass. It is likely the sky isn't falling this time either. I suggest some ways content may continue to thrive in the digital environment.

Lemley reviews the claims of various content providers (artists, musicians, writers, etc.) throughout history who complained that new technology would ruin their livelihoods, wipe out whole industries and destroy the culture.

He mentions John Philip Sousa's opposition to the player piano and the gramophone. I did a post on this last September here in which I said:

Not satisfied with his tirade against phonograph manufacturers, Sousa railed again the "cultural emptiness that mechanical music would create." He dramatically declared that human vocal cords "would be eliminated by a process of evolution."

Sousa's histrionic tirade seems quaint today. But his fears were very real to him in 1906. Although he succeeded in changing U.S. copyright law, he was unable to stop technological progress.

And I guess that sums up my thinking on the state of publishing today. I believe the following:

1) U.S. copyright law is antiquated and needs to be overhauled.

2) Writers and publishers need to stop trying to stop the new technology and figure out how to make it work for them ... while I acknowledge that the ground under the publishing world is shifting, instead of working on stopping the earth tremors, I'm focussed on learning how to locate the footholds and practicing how to hop nimbly from rock to rock.

Professor Lemley agreed with me. He said:

I think it is pretty clear that shutting down the technology doesn’t work. Whenever you succeed in shutting down a technology that people want, companies develop a different technology that responds to that market demand ... digital rights management fails because the controls are inconvenient and they get in the way.

He went on to say that new business models will evolve to provide a revenue stream for content providers in a digital age.

Among the advantages content providers seeking new business models have in the new digital age is "lowered production costs." Lemley points out that "... the digital revolution in the last decade has led to the largest-ever increase in the amount of content available in the world ... We get that new content because it is much easier and cheaper to make and distribute it."

Lemley reminds us that:

"Business models can also build on the experiential relationships that people have with content ... People want to be engaged with their content. They want to have connections with the musicians they like. They want to go to concerts and experience music live. They want to engage in an ongoing relationship, and there’s revenue there to be had by meeting that demand."

Professor Lemley goes on to say:

"Companies can also make money by providing convenience to users ... People who have substantial means often pay for things – even things that they could get for free."

Go here to read Professor Lemley's other suggestions.

I have one other idea for a business model which Professor Lemley did not touch upon. I mentioned it in that previous post which I quoted earlier in today's entry:

The developed world needs to move outside its own egocentric needs and recognize how the new technology can advantage those who are not as well off as we are. As I've previously stated, according to the World Bank's Poverty and Growth blog, the print-on-demand technology of the EBM [Espresso Book Machine] "offers the opportunity to deliver development knowledge and content to students, practitioners, media, and simply interested individuals in a way they could not be reached before." The prohibitive costs of printing, shipping and warehousing books for underdeveloped nations limits the amount of printed material that can be provided to poor areas of the globe.

Maybe it's the social worker in me, but I believe that developing a business around raising the educational/awareness levels of people in the poorest parts of the world would be a worthy enterprise that would probably attract significant donor dollars ... and offer a sense of satisfaction at the end of the day.