Thursday, October 20, 2005

Can you solve the Chaos Scenario?

Bob Garfield's Chaos Scenario portends a period in the near future as we move from a broadcast analog media to narrowcast (i.e, Long Tail) digital media will be fraught with confusion and peril because we have not yet devised a robust method of paying for content in an age where information wants to be free. While media moguls fret about their content being pirated by college students, advertisers worry how their messages will reach consumers in a user directed, on-demand world.

Although the Internet and the Web have been commercialized for a decade, there has yet to develop a technology or platform that can effectively absorb the billions of dollars spent currently on network and cable TV and in Print. With just over 6 percent of ad dollars spent online, consumers are already bombarded by pop-ups, spam, spyware/adware, and ads that takeover screens and obscure content. Is it any wonder that consumers have installed pop-up blockers, spam filters, and antispyware software in droves. Unless something is done to mediate the interests of advertisers, publishers, and consumers amicably, pouring more dollars into Internet advertising will just frustrate consumers as advertisers try even more intrusive ad tactics to offset falling clickthrough rates.

Saturday, October 01, 2005

What the RIAA wants

Although Apple's iTunes has been a success in creating a market for digital downloads, it has not really popularized it to the masses. More than 500 million tracks have been sold on iTunes since its launch in the Spring of 2003, but that works out to about 25 downloads per iPod. The recording industry's annual revenues are over $10 billion and the bulk of that comes from sales of CDs.

What the RIAA member companies want as I see it from their attempts to shut down p2p file sharing sites, suing college students, and overall look like the heavy is to have their cake and eat it too when it comes to transitioning away from physical analog products like CDs and tapes to virtual digital products like music files. They want to have the capacity of controlling distribution and pricing while reaping the benefits of shipping a product with no marginal costs.

I believe their current strategy of embracing DRM is flawed because it assumes that the value of the content cannot be separated from the transmission vehicle--the music file. I believe it can and there is precedent elsewhere. I won't say more except to state that should a successful division occur it will go a long way to solve the problem of paying for digital media while retaining value of the product.