Archive for December, 2007

No Hands Up

December 22, 2007

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“You want a movie or an album. You don’t want to pay for it. So you download it. Who thinks that might be wrong?”

Great short article from David Pogue in the NYTimes describing an experience of changing consumer behavior on copyright infringements during different of his speeches on copyright. Nice anecdote!

And I fully agree with him:

“I do know, though, that the TV, movie and record companies’ problems have only just begun. Right now, the customers who can’t even *see* why file sharing might be wrong are still young. But 10, 20, 30 years from now, that crowd will be *everybody*. What will happen then?”

There definitely is a big generational divide in copyright morality. We have to face it.

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What Can We Learn From China?

December 21, 2007

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For years the Chinese music industry (and video/dvd industry) has the most hostile environment that`s possible. Piracy rules there for many years long before the big digitalisation-internet-p2p wave here in Europe.

In order to survive the chinese music industry has to take over an artist’s entire life – recording, publishing, management etc. – 360 degrees – to get all possible revenue streams. For years now…

What can we learn from the industry there? What have they done? Is there anything useful? Are there similarities?

Some facts about China from Ed Peto:

– Physical piracy runs at around 90%.
– The average gig ticket is £3 and charging anything over £7 for a concert will alienate the young Chinese music crowd.
– Publishing is a foreign idea to the Chinese and is therefore a tiny, unpredictable source of income.
– All media is government owned or heavily government monitored and, in most cases, requires ‘financial incentives’ in return for coverage.
– Despite a population of 1.3 billion people, the legitimate physical music market was only worth US$86million in 2006, making it the 20th biggest in world.
– All foreign companies must enter a joint venture in order to set up shop in China, handing over at least 51% of their company in the process.
– All music has to go through lengthy and seemingly arbitrary government censorship procedures.
– China is a black hole of statistics, quite often by design, making market research and due diligence incredibly difficult.

Ed Petos blog about the Chinese Music Industry and this nice article at The Register.

December 17, 2007

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“The medium, or process, of our time – electric technology is reshaping and restructuring patterns of social interdependence and every aspect of our personal life.
It is forcing us to reconsider and re-evaluate practically every thought, every action, and every institution formerly taken for granted.
Everything is changing: you, your family, your education, your neighborhood, your job, your government, your relation to “the others”.
And they’re changing dramatically.”

Marshall McLuhan, “The Medium is the Message” 1967

p2p Traffic Dominates the Net – Who profits?

December 14, 2007

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iPogue, a German internet traffic management company, published a study where they tracked the internet traffic in August and September 2007 in 5 regions of the world.

The study showed that still P2P uses by far most of the internet traffic. The total share eaten by P2P ranges from 49 per cent in the Middle East to 84 per cent in Eastern Europe. At nighttime, p2p traffic jumps as high as 95 per cent of total bandwidth used. See the figures for Germany in the graphic.

Impressive numbers that show first, you can`t stop filesharing ever,  and second, somebody makes a lot of money with filesharing.

In all this P2P and copyright disussions, we always talk about the copyright holders, artists, labels, and the users, consumers, fans… But we nearly never talk about the guys who really make the money in the new game.
It`s not just the  consumers, and it`s not the edonkey, gnutella or bit torrent portals… it`s the ISPs.

If you see the share of traffic, it`s not difficult to guess why the users love to subscribe for a new DSL 6000 connection. Please don`t get me wrong, I don`t want to blame anybody! The ISP market is big money market, and most of the money is made cause of the content that is out there. So if anybody starts a “fairness” discussion, and I don`t want to say that there should be one, but when we talk about copyright, why don`t talk with/about the ISPs.

Just a thought.

Nokia “Comes With Music” Only One Year

December 13, 2007

I wrote a few days ago about the Nokia plan “Comes with music”.
More and more informations for the project – starting second half 2008 – are going around.
It sounds not as good now. DRM will be the problem. Read more here. After the one-year subscription period finishes the subscription service is over. To Renew the subscription for another year consumers have purchase a new device. Sorry, I am not optimistic.

Taste Sharing is Driving and Democratizing Culture

December 11, 2007

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Recommendation systems are since Amazons first moves, now more than ten years ago, nothing really new . But recommendation systems are getting better and better. What companies like LastFm and Pandora doing right now, is phenomenal. Their collaborative filters are already on a very high level.
I found last weekend a short report from Gartner and the Berkman Center for Internet & Society (published 2005, so careful: old figures) on consumer taste sharing in the music industry.
The report shows that not only passive recommendation systems, via collaborative filtering, but also the “direct”/”active” taste sharing is very important for the user and has a high impact. Instead of primarily Charts, Djs and music videos shaping how we hear and view music, we have a greater opportunity to hear from each other — creating and posting playlists, commenting on an artists, showing your profile on Last.Fm or MySpace et cetera… These tools allow people to play a greater role in shaping culture, which, in a way perhaps also shapes themselves. Music or taste as a social currency, as a kind of self expression. The report predicts that by 2010 25% of online music store transactions will be driven by consumer to consumer taste sharing. (No idea, how they get this figures)

Again we are just talking about music, but this systems can also work and get as important for video content, news, print content…

What´s the impact on the media industry?

On the one hand it`s nothing more than the good old word of mouth, but more “professional organised” and more effective. On the other hand it`s a kind of democratizing culture. Recommendation systems may diminish the control that traditional tastemakers have had on how we engage music or content.

And everybody in the mass media industry who says “no worries, there always will be some need for a lean backward service”, a tastemaker, is maybe right, but maybe it will not be his mass media content service, it will be perhaps a recommendation system.

Recommendation systems a new kind of media channel?

What does that mean for mass media companies? Radios, TV-stations, music labels?
Are recommendation systems really just a promotion tool? or a challenge? an opponent? a threat?

How important can they get?

Chris Anderson about Free

December 6, 2007

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Mr. Wired, Mr. Long Tail gave a speech at the Nokia World 2007 in Amsterdam about Media in the world of a Post Scarcity Economy, an Abundance Economy World.
“The Free”. See the webcast here.

He has a simple thesis based on basic economies:
In a competitive market price falls to the marginal cost.
But in a high technology market the marginal costs fall to nearly zero, so the price also falls to nearly zero…. to close to free.

So his thesis is: “Round down! If the unitary cost of something is approaching zero, treat it as zero and sell something else.”

And he shows some models why and how it makes sense to give things away for free: Cross subsidy, Ad supported, Freemium, Marketing et cetera.

His advice to industries that get confronted with a price nearly zero is:
Redefine the business you`re in!

Great thoughts.

Nokia tries it. Nokia comes with music.

December 5, 2007

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Golem reports from the Nokia World 2007 in Amsterdam that Nokia will sell mobile phones in a bundle with a subscription service: Buy a phone and get unlimited access to millions of songs for one year free. Unfortunately there are no information to the pricing yet.

Anyway that sounds very interesting and can be a big benchmark for the market.

In my eyes definitely the right step. When Nokia wants to win against the ipod, they have to try to make it “useless”.
But of course the price for this service will be the biggest challenge …

Let`s wait for more informations.

Broadband Access is changing the TV.

December 4, 2007

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Nice article in the NYTimes.

“The other” screens are coming now, and finally the production companies realise to produce own content for them. Formats like quarterlife are a good start.

The whole “windowing” system in the TV/Film/Video Industry is starting to change now, as it has a while ago and still is in the music industry. New release windows are occuring, some windows getting less important…

And this new chances of distribution affect much more… — how video content is created, monetized and of course consumed.

Broadband access is changing the film/TV/ video industry, as it changed the music industry!

My English

December 4, 2007

Did I ever say sorry for my bad English?

Sorry!