Category: DRM and IPR

It all began when the fat man sang

One of my favourite t-shirts, second only to Help>Slip>Franklin’s. [That’s a reference to one of the finest sequences ever played live or laid on vinyl: Help On The Way, Slipknot and Franklin’s Tower, taken in sequence from Blues for Allah.] Both t-shirts, by the way, available from zazzle.

You guessed it. I’m one of those. A Deadhead. And proud to be one. If you check out the end of the About Me section of this blog, written when I started blogging, you’ll find these words:

my thoughts on opensource were probably more driven by Jerry Garcia than by Raymond or Stallman or Torvalds

It’s been a long strange trip for fans of the Grateful Dead recently: For example, the March 2010 edition of the Atlantic Review had an article entitled Management Secrets of the Grateful Dead.

Image credit: Zachariah O’Hora

The article talks about the inauguration of the Grateful Dead archive at the University of Santa Cruz. Some years earlier, Strategy + Business, a prestigious management journal, published an article entitled How to “Truck” the Brand: Lessons from the Grateful Dead.

Atlantic Review. University Archives. Management Journals. Just what is it about the Dead? A fan site that’s really a social network, one of the earliest to understand the value of social media in bringing the fan base together and giving them a space to inhabit. A dominant position in live music: the Dead have their own tab in the Internet Archive (the only entity, band or otherwise, to have one) and account for 10% of the overall Live Music collection there. A Google Earth mashup that shows you the precise locations and times of Dead concerts. Sites dedicated to trading the music of the Grateful Dead. A shirts Hall of Fame. A gazillion ties. [I should know, I have over 50 of them…]

A long strange trip indeed. So here’s my personal perspective on why the Dead succeeded.

1. It’s all about performance. Unlike most other bands, the Dead were a touring band. They played. And played. And played. Between 1963 and 2007 the Rolling Stones performed live 1597 times, or about 35 times a year. As against that, the Grateful Dead performed live 2380 times between 1965 and 1995, or about 77 times a year. Very few bands keep up that level of performance.

And so it is in business. People care about what you do, not what you claim to have done or how good your marketing is. Particularly now, when the cost of discovering truth is lower than ever before, what matters is how a company performs. Not how it says it will perform. Which is why customer experience has become so important.

2. It’s all about participation. Studio performances are not the same as live music: when you see what gets traded in Dead circles, you begin to understand why. Live sessions are real, organic, they change from session to session. Audiences are not locked away on couches or straitjackets, they participate. Because they can. And they want to.

Companies need to understand this as well, particularly as the analog world shifts to digital. The cost of participation gets lowered. There was a time when I used to get really irritated with management consultants who would bring their powerpoint decks when meeting with me, always in analog, always taking care not to leave it behind. [In case I tried to copy it or, Heaven forfend, amend it, add to it.] What tosh. I’d already paid through my nose for the material.

Contrast that sort of short-term thinking with the vision inherent in Garcia saying “When we’re done with it, they can have it”, when asked about fans taping their shows.

3. It’s all about improvisation. John Lennon, another of my favourites, is reported to have said:

Life is what happens to you while you’re making other plans

When you look at the way they performed at concerts, there were many interesting charcteristics. They didn’t seem to have a predefined list of songs or sets; there was a lot of jamming and improvisation within the songs, drawn from a vast array of songs whose “design” made such improvisation possible. Garcia suggested more than once that they made up the song list as they went on, basing it on active feedback from the fans.

Lineups varied; band members performed in other bands or groups; everything about the culture of the band screamed responsiveness, adaptability.

4. It’s all about passion. Quality matters. And quality is a function of passion, of persistence, or practice. What the Dead did they did as a labour of love. Unless you enjoy what you do, there isn’t any point.

When you’re passionate about something, then you take the values inherent in that something and live your life according to those values. They permeate everything you do. I had the privilege of spending some time with John Perry Barlow, erstwhile lyricist for the Grateful Dead, cattle rancher, founder member of the Electronic Frontier Foundation, poet, what-have-you. And he was a perfect example of how his values affected everything he did and does.

If you haven’t done so already, you should read his essays The Economy of Ideas and  The Next Economy of Ideas, along with the oft-quoted A Declaration of the Independence of Cyberspace.

In the end, what the Grateful Dead stood for are principles. Principles of openness and participation, principles of performance and passion, principles that allowed them to improvise and respond.

Companies would do well to pay heed.

Not enough joy

An old colleague, Andrew Yeomans, reminded me of this recent piece in Gizmodo, looking at digital music revenues for punk-pop band Too Much Joy.

Reflections on an industry screaming of incumbent inertia, lackadaisical about their figures and the meaning of those figures.

Lackadaisical where it hurts: in the income streams that trickle towards the artists. You know, the creative people.

The figures speak for themselves.

Thinking about food and music and climate change

I think about food. A lot. In fact I’m perennially hungry, have been that way ever since I can remember. So it should come as no surprise that every now and then, I try and view things from the perspective of food.

Take music for example. Recorded music. Music that has been bottled or canned or preserved.

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The ability to preserve music in this form is fairly recent in human history. And without this ability, the whole argument about downloads and ripping and  format transformation rights and I don’t know what else falls by the wayside.

So when I look at this diagram, and read this report, I begin to wonder. Incidentally, there’s a worthwhile series of posts on the subject here and here, dealing, for example, with the winner-takes-all bias in some of this.

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I know how I feel about preserved food. About preservatives in food. About additives and e-numbers and what-have-you. I know how I insist on using fresh herbs and spices when I cook, even though it takes longer and it’s more expensive.  I know how I dislike frozen food, how much I dislike frozen food. I will not knowingly eat something that has been microwaved if I can avoid it. These things I know.

There was a time when there was no such thing as frozen food. In the history of food the ability to freeze food and reheat later is fairly recent.

There is a cost to freezing and transporting and heating frozen food. That cost will soon become more apparent to people, as awareness of carbon footprint in the food transportation and processing business grows. And more people will start eating local produce again.

And maybe we’re going to see something similar about music and film and sport. If this whole DRM and downloads and intellectual property rights debate continues to get out of hand, criminalising entire generations and seeking to corrupt and destroy the value of the internet, then we’re going to see a revolution.

We will see a renaissance of live music, of live performances, of live sport. Local teams supported. Local farmers supported. Local playwrights and poets and authors supported.

We will see a renaissance of travelling bands, of authors and poets on roadshows reading their own works.

We will see a renaissance of people paying to see artists perform, rather than paying for the right to perhaps maybe one day hear something recorded, canned and preserved, something they have to climb DRM Everest to hear, and even then it may not be possible.

DRMers and dreamers. Which one are you?

Musing about culture and customers and choice: the eBaying of “content”

I have the privilege of spending time with many startups, in a variety of guises: as incubator, as advisor, as investor, as chairman, as well-wisher, friend and supporter. The startups differ widely and wildly: they range in size from a handful of people to hundreds;  they have annual burn rates in the thousands and in the millions; they have different strategies and different ways of executing them; the motives that drive them are different, the things that keep them awake at night differ as well. They make different types of products and services, for different markets, with different social and economic aims and consequences.

But they share one thing: They keep asking themselves the same set of questions:  “What does the customer want? What will she do with our product or service, how will it be used? Why will she come to us for it? And what will she pay for it?”

This isn’t rocket science; it isn’t even illuminated startup management. It’s Customer 101. So we speak a lot about customer choice, and, much of the time, we do something about it.

When it comes to culture, however, we seem to forget. Which is strange, because the changes that are taking place are at their most severe in the cultural arena. Changes that are taking place to reverse the developments of the last fifty, maybe even hundred years in a number of key aspects of culture.

  • These changes are simple yet far-reaching:
  • Consumption to Participation: The television and broadcast ages brought the ability for people to consume events globally, but it took the tools of today to let them participate globally. Obama’s campaign is a classic example. There were people all over the US, even in the “red” states, who contributed to his campaign, who participated in the discussions. Yes, there were people in Europe who tried to donate money into Obama’s campaign and failed for good legal reasons; but they could still engage.
  • One Place to Many Places: You couldn’t be part of an orchestra unless you went to where the orchestra was. Now the Mountain comes to many Mahomets, the orchestra comes to you, there are many examples of distributed music ensembles.
  • One Time to Any Time: Gone are the days when Super Bowl Monday was a nightmare for young men in Europe, who had to stay up into the early hours of Monday if they wanted to make an “evening” of it. Now they can still do that, but they don’t have to. They can hold their party on Monday night if they want. Not everything is streamed live, or needs to be. YouTube passed a billion hits a day and doesn’t stream anything live.
  • Hit Culture to Long Tail: When costs of warehousing and distribution were a significant proportion of overall cost, it made sense to reduce the number of items in inventory. As that changed the size of “inventory” available changed dramatically. So for example I buy many books from Amazon or Abebooks that aren’t in their top 10,000 sellers. Many of these books would be impossible to get via a traditional bookshop. The same goes for music and video. It doesn’t matter how many studies I see that seek to pooh-pooh Chris Anderson’s thesis, I look to what I do and what I can do. What I can do is a lot more than what I could do, because my transaction costs for “long-tail” items have reduced sharply.
  • Using to Making: The proliferation and ubiquitous availability of tools that are themselves participatory by nature has changed the basis of participation. Think of the number of video cameras you saw in the 1960s, the 1970s, the 1980s and now. Just look at the photographs, videos and notes that make it on to Facebook. Soon, Facebook will be a country whose population exceeds that of every country bar India and China. A country where everyone has feedback loops to the mother ship. Say what you like about the Borg, but don’t underestimate it. A critical change is taking place there. A country with more photo uploads than Flickr, more games players than World of Warcraft, more people than most of Europe or America. And global in reach. The stuff that gets uploaded to Facebook is not “copies of originals” but often mutations. Think of the number of video cameras you saw in the 1960s, the 1970s, the 1980s and now. More on this later.
  • Scarce to Abundant: One of the most fundamental changes is that of the internet as a copy and remix machine, making artificial scarcity something very difficult, something almost impossible. The very concept of artificial scarcity is relatively new, born of the consumption mindset driven by mass marketing. Things analog were, or at least could be, scarce. [If they weren’t scarce then you could hoard them or cartelise in order to make them seem scarce]. Things digital are fundamentally infinite in abundance, since the cost of reproduction and transmission is trivial.
  • Forced to Voluntary: Payment for cultural services has always changed from age to age; sometimes it’s been about patronage; sometimes it’s been about passing the hat around; sometimes it’s been about levies and fees, as with library schemes and radio broadcasting. The fixed purchase scheme is relatively recent in comparison and is in the process of being rendered obsolete. People will now pay what they are willing to pay, even for ostensibly free things.

I could go on, but won’t. The point is simple. We’re moving from an analog world to a digital world. That means that many things change. The most important change is that in a world of abundance, the buyer sets the price. The customer is in control.

The story is one of empowerment and inclusion, of enfranchisement. And one of the key shifts that is taking place is in the almost-random repurposing of things past. For example, take the concept of “literal videos“, as exemplified by Dustin McLean. What a lovely idea. Take an old video, keep to the original pictures and backing music, rewrite the lyrics to reflect what’s actually happening on the video rather than in the song. My particular favourite is the literal video version of Bonnie Tyler’s Total Eclipse of the Heart. My thanks to Dave Morin, who pointed it out to me via Facebook.

I keep trying to tell people that while the internet may have been discovered or even invented by Al Gore, it was definitely not invented exclusively as a new distribution model for Hollywood or its musical cater-cousin. Who could have predicted that someone would do this to Carl Sagan and to Stephen Hawking.

People are creating value from things long forgotten, long abandoned, long deemed worthless.

There is an eBaying of content going on, as people repurpose stuff they find in the digital garage and attic that is the Web.

Some people will become the new scavengers, looking through the detritus of the web for things to reuse and remix. Some will build the places where they look, the tools they look with: the Bit Torrents and Pirate Bays of this world. Some will do the remixing, as in the Dustin McLeans. Some will buy, but not all: there is already a plethora of data points about freemium models and conversion rates.

If we allow this to happen, then new revenue streams will begin to emerge, new business models will come about.

If we allow this to happen, then we can participate in these new revenue streams and models.

If we try to prevent it from happening, we will fail. And therefore not participate in the new revenue streams and models.

The customer now has choice.

And we have a choice. To be on the customer’s side. Or not.

The customer is the scarcity

Every economic era is characterised by certain abundances and by certain scarcities; these change over time; yesterday’s abundances become today’s scarcities and vice versa. When I was a young child in India, cotton was plentiful and polyester scarce. People valued the scarce thing over the abundant thing: so the rich wore Terylene shirts and the poor wore cotton. Even though the Terylene shirts were overpriced uncomfortable non-absorbent non-breathable stick-to-your-back sweat producers.

Most of the time, the abundances and scarcities are natural, caused by explicable imbalances between supply and demand. So cotton was cheap in India and expensive in the UK, while polyester was cheap in the UK and expensive in India.

Sometimes the imbalances are artificial: monopolies and cartels and market power abuse and price-fixing and market-cornering are examples of such artificial imbalances. Most of these have been seen for what they are, and consequently declared illegal in most countries.

Not all artificial scarcities have been termed illegal as yet: the most glaring example is that of “intellectual property rights”, where something is made artificially scarce using the power of the state; no other rights depend exclusively on state intervention. Strange, that.

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The digital age has given rise to more and more artificial ways of creating and assuring scarcity. Computer ports are a classic example: when all the ports were hardware ports, scarcity was easy to understand. When the ports in question were software ports, the concept of scarcity was less easy to establish.

Analogue things are usually scarcer than digital things, since the cost of digital reproduction and transmission is extremely low. As Kevin Kelly said, the internet is one great copy machine. [if you’re a fan of KK, do take a look at some of his other essays in related areas: Better Than Owning is well worth a read, for example.

Two other Kevin Kelly essays stand out in this context: People Want to Pay and Why People Pirate Stuff. I quote from the Pirate essay:

[Game developer Cliff Harris asked the online world “Why do people pirate my games? And in the answers, …] He found patterns in the replies that surprised him. Chief among them was the common feeling that his games (and games in general) were overpriced for what buyers got — even at $20. Secondly, anything that made purchasing and starting to play difficult — like copy protection, DRM, two-step online purchasing routines — anything at all standing between the impulse to play and playing in the game itself was seen as a legitimate signal to take the free route. Harris also noted that ideological reasons (rants against capitalism, intellectual property, the man, or wanting to be outlaw) were a decided minority.

Similarly, one of the key points made in the Want to Pay essay is this:

People buy stuff, but what we all crave are relationships. Payment is an elemental type of relationship. Very primitive, but real.

There are some caveats in this urge to pay.

Paying has to be super easy, idiot-proof and frictionless. There can’t be hurdles. The easier it is to pay, the more eager people are to pay.

The price has to be reasonable. That means it has to be reasonable in relation to similar stuff that is free!

The benefits of paying have to be evident and transparent. This takes creativity to produce and work to convey simply. Unless the benefits of paying are obvious, paying is made difficult.

Every artificial scarcity will be met by an equal and opposite artificial abundance. Port vulnerabilities will be exploited, as Microsoft users have found out to their cost. DVD players will be “chipped” to overcome the insanity of region coding on DVDs (which, by the way, is one of the stupidest things I have ever seen done). Music and film and book DRM will be hacked, as Jon Lech Johansen showed elegantly.

When I was a child, “English” films (which included those of both US as well as UK origin) tended to come out a year to eighteen months after release abroad. Not surprising in an analogue world, with very high production and distribution costs and a scarcity of copies as a result. Today, when there is an artificial gap between US and Indian or Chinese release, the artificial abundance kicks in. Piracy.

Protecting artificial scarcity is an expensive proposition, and ultimately a losing proposition. More and more people will volunteer time to help correct artificial scarcity, because they see it as path pollution, the desecration of core values by profane behaviour.

People see DRM as something that is an irritant, a pollutant, a time waster. They want to pay, but not at the price of artificially imposed inconvenience. There is also a key trust issue here: similar to the issues related to identity, privacy and confidentiality, there is a pervasive belief that those who use DRM will act more and more unreasonably.

Take Amazon. I like much of what the company does and stands for. The recent incident with Amazon and 1984 may not dent the company’s reputation overall, but many people will not buy a Kindle as a result. And I am one of them. Remotely-managed deletion of electronic copies of 1984 from people’s Kindles, copies that were legitimately paid for, is a monstrous thing to do. Incidents like “1984” will spur the pushback against DRM even more.

This post is not about the 1984 incident; although we will see consequences, the incident will pass. This post is about something far more important.

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[My thanks to Bergen Moore for the photo above.]

This post is about the customer. Customers are creative people who transform scarcities and abundances in strange and beautiful ways. If two-wheelers are abundant and four-wheelers are scarce, then a way will be found to make a two-wheeler behave like a four-wheeler.

As Dan Bricklin pointed out wonderfully in his book Bricklin on Technology, we must always remember that the role of the technologist is to build tools for people to use, not to constrain them from doing things. [incidentally, Dan’s partner-in-crime during the VisiCalc days, Bob Frankston, is an excellent source of learning as well. I have had the joy of listening to him on many occasions, count both him and Dan as personal friends. If you get the chance, do read Bob on Zero Marginal Cost and on Assuring Scarcity.

People are incredibly creative. If you plan for ten uses of a tool while designing it, you can rest assured that they will find an eleventh use. Take cooking as an example. And the concept of recipes.

Recipes are tools for the transfer of cultural enjoyment. They show some classic opensource behaviours, to the extent that NEA applies. For most recipes you can say: Nobody owns them. Everyone can use them. Anyone can improve them.

I love cooking. I speak to chefs regularly in order to find out how to make what they made. Sometimes they have cookbooks, and sometimes I buy the cookbooks. Why? Because it is convenient, and I am happy to pay for that convenience, for that service. Content is a service business, as Andrew Savikas points out eloquently. Sometimes I get the book signed by the author, triggering some of Kevin Kelly’s Better Than Free generatives, especially those of authenticity and embodiment and patronage.

But what happens after I get the recipe verbally, or after I buy the book? I’ll tell you what happens. I do it my way.

I change things. I experiment with the ratios and quantities in the recipe; add ingredients, drop ingredients. Change the way it’s meant to be cooked. Pass on my learning, the comments of my guests. And learn from others as they do the same thing.

Can you imagine being told that you can’t share recipes with others? That you can’t change ingredients or quantities? That you can’t enrich, augment, mutate the ideas involved? In many ways that is what DRM and IPR is designed to do, prevent us from being creative. [Pharma and IPR is a whole separate subject, yet essentially related. I will cover that in a post on some other day].

Customers want to be creative, to experiment with things, to change things, to share what they learn, to learn by sharing.

We are fast approaching an age when many analogue things will become virtual, digital, easily copied.

We can choose to invest time and effort in making digital things harder to copy: we can choose to create artificial scarcity, and lose.

Or we can choose to invest time and effort in making digital things easier to consume, to share, to enrich. And to pay for.

The customer is willing to pay. If we get the consumption model, the paying model, the sharing model, right.

The customer is the scarcity. Let’s focus on valuing that scarcity, on giving the customer what she wants when, where and how she wants it. With the right consumption and payment and sharing models.