Piracy as a progressive tax and other thoughts on the evolution of content distribution on the Web [Tim O'Reilly]
The lengthy debate over file sharing led me, the author and the publisher, to make some judgments. I, of course, do not do either movies or music. But I think that the lessons I learned from my experience apply to them.
Let's start with book publishing. Over one hundred thousand books are published annually, several million book titles are on sale. Less than ten thousand names are in any significant demand, and even the largest stores offer no more than one hundred thousand names to customers. Most of the books lie on the store shelf for several months, after which they return to the warehouse darkness, from where the only way for them is to waste paper. The authors think that it is worth finding a publisher, how come the fulfillment of all desires, but most of them are at the very beginning of a long chain of disappointments.
Sites like Amazon is a virtual showcase where all out-of-print books are displayed. These showcases - like a ray of light, illuminating the warehouse darkness, thanks to them books that otherwise would not have any chance to catch the eye can be found and bought. Authors who have been fortunate enough to return the rights to their books from the publisher often post them on the Web freely in the hope of finding a reader. The network helps the reader by simplifying the distribution of information about books and allows you to hear about the book and immediately buy it. But even in this case, only a few books live longer than a year or two after being published.
Many books lead a miserable existence in deserved oblivion, but many suffer simply from the huge gap between supply and demand. (They cannot find their reader, as he simply does not know about their existence.)
I do not know the exact volume of the complete catalog of CDs, but I believe that it is close in size to the catalog of books. Tens of thousands of musicians record their own discs on their own, but few lucky people make a contract with the publisher. Of these, only a few achieve a noticeable sales volume. And the overwhelming part of the contents of the audio catalogs for the consumer does not exist simply because this music is not for sale.
The catalog of films due to the high cost of film production is much shorter, but their enemy is still the same - obscurity. Thousands of independent directors are desperate for distribution of their creations. Some independent films, for example, the Danish "Dogma", come to the viewer. But the audience of most of them is limited to rare shows at local film festivals. Probably, the development of digital video will soon lead to the fact that making a film will be no more difficult than organizing a rock band in the garage or writing the Great Roman in the attic.
For most of those who create in obscurity, it is a great success to be known so well as to become a victim of pirates. Piracy is, in fact, a kind of progressive tax that can cut a few percent of the income of popular authors (I say “may”, since even this fact is not proven). Which means a huge benefit for those whose incomes grow with increasing popularity.
The current system of distribution of books, music and films has a strong lurch in favor of the "haves" against the "have-nots". Of the quality work, only a few receive large advertising budgets and are sold in large volumes. Most, in the words of the heroine of Tennessee Williams Blanche Dubois, depend on the “kindness of the passers-by.”
Removing barriers to common and ensuring continuous access of consumers to the entire contents of the catalogs, and not just to the most popular works, would be a blessing for the author. He would get an extra chance to make up his name, reputation and audience in collaboration with the entrepreneurs of the new information environment, who will become his tomorrow's publishers.
I found my nineteen-year-old daughter and her friends listening to countless groups of records found on Napster and Kazaa. Interested in the music they find, they usually go to buy CDs. Now my daughter has more CDs than I have collected in my entire life. Moreover, she introduces me to the things she likes, and as a result I also go for the disk. No, she is not downloading Britney Spears from the network, but forgotten bands from the 60s, 70s, 80s, 90s and recordings of their forerunners of other genres. This music is difficult to meet anywhere other than the network; but the find entails a focused search for CDs, recordings and other things. EBay online auctions do a great business selling similar things, while the RIAA overlooked these opportunities.
“Piracy” is a pretty strong expression. It means mass replication and resale of counterfeit products. When the music industry and the film industry apply it to peer-to-peer file sharing, they thereby move away from an honest discussion of the issue.
File sharing on the web is an activity of enthusiasts who exchange music and movies because they have no legitimate alternative. Piracy is illegal commercial activity, which is a typical problem for countries where existing copyright laws are poorly enforced.
O'Reilly publishes many books on the web. There are those who use it to distribute counterfeit copies. (For us, a serious problem, by the way, is not file-sharing networks, but the placement of our CD Bookshelf editions on public web servers, or the mass replication of disks and their sale on eBay). Pirated copies are annoying, but they hardly interfere with our business. We have not noticed any serious reduction in sales of printed books, which are simultaneously offered to the reader in electronic form.
Moreover, many violators respond to a polite letter asking them to remove this material. Those servers that ignore our emails are usually located in countries where our books are either not sold or are too expensive for local buyers.
Interestingly, our copyright activity is directed by the buyers themselves. We receive thousands of letters, where we are told about illegal copies or websites violating our rights. Why? Because readers appreciate our company and our authors and want our work to continue. They know that there is a legitimate way to access our books on the Web — our subscription service Safari Books Online , which costs only $ 9.95 a month, and as a result, they understand that free copies are illegal.
A similar example is provided by John Schulle, a former technical director of Softlock, who collaborated with Stephen King in his experiment with the e-book, “Riding the Bullet”. Softlock used a tough copyright control scheme 2, hoping to reduce distribution costs as a result of the “superdistribution” effect, when a buyer sends a copy to friends who, having received it, just have to go and download the key to use it. But it turned out that most of the copies were downloaded from the central site, and only a few passed on. Softlock surveyed customers to find out why they rarely pass text along the chain. To the surprise of the publisher, it turned out that readers simply did not understand what was intended and did not do it, because "they thought that this would not be good."
The easiest way to ensure that consumers stop sharing illegal copies of music and movies is to provide them with a reasonable alternative at a fair price.
')
Only a few place their books on public servers in order to gain commercial benefits. Those who are engaged in piracy - organized replication of content for resale - offer CDs with PDF or HTML files of dozens of our books via eBay. Despite this, we see no need for either stricter copyright legislation or special software protection, since the existing laws are quite enough to prosecute a few malicious pirates.
We have no significant problems with piracy in the United States and Europe. The fact that Microsoft software has been available on warez sites for many years (and now on file-sharing networks) did not prevent it from becoming one of the largest companies in the world. Estimates of “lost” revenues are based on the assumption that illegal copies would otherwise be paid. On the other hand, this does not take into account sales, which took place due to the popularity that the product scored thanks to illegal copies.
The problems created by pirates are, in the worst case, similar to ordinary shoplifting — the inevitable cost of trade.
In a word, we, as a publisher that publishes many books in electronic form, assess piracy as a cross between shoplifting and some kind of tax. From my point of view, the theft of a single copy of the book is an even greater danger and can lead to losses far greater than its cost. If the store has a single copy of a book, tape or disk, theft removes it from the potential buyer’s attention, and since the store’s accounting system shows that the book is not sold, the order may not be renewed for weeks or months, perhaps more than ever.
I have asked many times in stores why they don’t have a single copy of any of my books. After a quick glance at the credentials, I was usually answered: “But we have one. The system shows that we have one copy, and it has been unsold for several months. Therefore, we see no reason to order more. ” To convince the seller that the book is not sold, most likely because it is no longer on the shelves, is not so easy.
E-books can not be out of stock and therefore always have a chance to be sold without being affected by the terrifying inefficiency and arbitrariness of the distribution system.
The recording industry and film industry are suggesting that file sharing networks will inevitably destroy their business.
Those who say this do not understand the nature of publishing. The role of the publisher cannot be destroyed by technology, since its necessity is based on simple mathematics. Millions of buyers and sellers cannot find each other without one or several intermediaries, who, like the system of transformer substations, divide the market into more visible parts. The mediator always has a place. Publishers reduce authors and trade, trade reduces buyer and publisher. Wholesalers mediate between small publishing houses and retail. Distributors of specialized products are looking for new distribution channels.
Those of us who saw a new publishing environment in web space also saw how this medium evolved in less than ten years. At the dawn of the Network, it was argued that an era was coming, where there would be no place for a mediator and that everyone could become a publisher. But soon the owners of personal web pages began to pay for help in increasing the "visibility" of their resource in Yahoo !, Google and other search engines (online analogues of Barnes & Noble and Borders 3), and web authors were happy to write for sites like AOL and MSN or for their "technological" counterparts - CNET, Slashdot, O'Reilly Network and other web publishers. At the same time, authors from Matt Drage 4 to Dave Wiener and Cory Doctorow 5 made a name for themselves as publishers of new media.
As noted by the author of the book “Guns, germs and steel,” Jared Diamond, mathematics is behind the complication of any social system.
In the new technology, there is nothing that changes the basic mechanism by which millions of products find millions of buyers. Methods of grouping and selection may vary with technology, but the need for them remains always. Google search, in ranking of pages taking into account the implicit recommendations of users, is similar to how trade uses sales statistics to generate orders.
The question is not whether the role of creators or publishers is reduced to zero due to technologies like file-sharing networks. The question is how authors use technology to promote their works. And for the publisher, the question is whether he will understand his role in the new environment before anyone else does. Publishing is like an ecological niche; new publishers are rapidly filling those areas where the “old” have failed.
If we turn to the basics, we will understand that publishing is not only about creating a product, but also about the difficult work of creating and maintaining a reputation. People go to Google or Yahoo !, in Barnes & Noble or Borders, HMV or MediaPlay, because they are sure that their search will be crowned with success. And they turn to the services of publishers like Knopf or O'Reilly because they trust our ability to find interesting topics and good authors.
But back to the file sharing discussion. How do people search for recordings using Kazaa or other file sharing systems that are true to Napster's precepts? First, they are looking for something with which they are already familiar. But the search for famous artists or works has fundamental limitations, since it relies on a limited "namespace" (names of authors / titles of works), external to file-sharing systems. To really oust the existing system of distribution of sound recordings, you need to develop your own mechanism for product promotion.
And we see that these mechanisms arise. File exchange systems rely on the most effective marketing mechanism: oral recommendations. But anyone who is familiar with the history of the media, knows that the search, based on existing knowledge and oral recommendations, allows you to collect only "low-hanging fruits." As the market develops, commercial marketing develops, and a long chain of intermediaries, typical of the existing media market, is built up step by step.
New media do not crowd out, but rather strengthen and expand existing markets, at least in the short term. It is possible to make money filling the gap between new and old environments. For example, the development of file-sharing networks has intensified trading on eBay with discs and compact discs that are not available through the usual distribution channels used by the recording industry.
Over time, it may happen that online music services supplant CDs and other material media in the same way, recording pushed the periphery of music publishers and turned the piano from a home music center into a nostalgic piece. But the role of performers and music publishers is preserved. The question, therefore, is not whether book publishing, sound recording or film production dies, but only who will publish.
A question to my readers: how many of you continue to receive e-mail using the UUCP protocol, or the old “free” Internet? And how many of you pay a monthly $ 19.95 per month (or more) to an Internet access provider? How many of you watch “free” terrestrial TV and how much does $ 20- $ 60 per month pay for cable or satellite TV? (I don’t mention renting video tapes and DVDs and buying copies of your favorite movies.)
Services like Kazaa thrive in the absence of competitive alternatives. I can confidently say that as soon as the music industry offers access to the same recordings without the inconvenience of copy protection, with more complete and accurate catalog data and other capabilities, it will receive hundreds of millions of subscribers. Provided that it will not wait long. Otherwise, Kazaa itself will begin to provide such a paid service (if problems of a legal nature are resolved). The development of publishing based on file-sharing networks will take place just as the multibillion-dollar media business AOL, MSN, Yahoo !, Cnet, and others took place on the “free” web.
But why pay for a record that you can get for free? For the same reasons for which you buy a book, instead of borrowing it from the library, or buying a DVD with a film that you can watch on TV or rent. Comfort, ease of use, choice, the ability to find what you want and the joy of owning a thing of value to you.
The current state of file-sharing networks is estimated at best as mediocre. Students and those who have free time may find their quality acceptable. But numerous copies of the same work of obscure quality, the lack of permanent access to the works, incorrect identification of the performer or play and other shortcomings - all this leaves much to be desired.
Opponents may argue that the Network clearly demonstrates the reality of their fears that advertising revenues do not cover the cost of “free” content, and that subscribing to such a service will not become a commercially successful model. However, I have not finished.
Subscription services are booming. The pioneers of this market are computer professionals. For example, the monthly growth rate of O'Reilly Safari Books reaches 30%, and today this service is a multi-million revenue source for us and other publishers - project participants.
Most critics overlook the fact that the Internet itself is already being sold as a subscription service. All we are talking about is the creation of additional paid services. Moreover, there are already several vertically integrated Internet providers (I would especially like to mention AOL Time Warner), which provide connectivity as part of the “basic” package and at the same time own huge content libraries offered for an additional fee.
When considering subscription content services, the “television” analogies are instructive. Free TV, funded by advertisers, has largely been supplanted or, more precisely, supplemented by a paid subscription to cable television. Moreover, revenues from subscriptions to the basic package are complemented by various sets of pay channels. One of these channels - HBO is now the most profitable for television networks. Like this example, providers pay $ 19.95 per month for the equivalent of a “basic package”. But the ability to offer additional paid music or other services similar to television pay channels remains out of sight of current publishers.
Another conclusion from the television experience is that, with the exception of special cases, people prefer a subscription to a one-time viewing fee. Moreover, a subscription to one channel a consumer prefers to subscribe to several channels at once. So, people subscribe to a package of feature film channels, a package of sports channels and the like. The per-song “per song” trial balloons might work, but I believe that in the long-term, a monthly buffet-style subscription will prevail in the market, perhaps segmented by different musical genres.
The study of other media markets shows that the only right decision does not exist. A successful company maximizes revenue in all directions, with the understanding that the only real opportunity to provide this income is to satisfy the needs of the person who pays the bills as fully as possible.
At O'Reilly, we have been experimenting for several years with the distribution of books through the Web. We understand that we must offer an attractive alternative to the consumer before others do. Hawaiian proverb says: "no one will give tomorrow." Competition with “freebies” makes us invent new ways of publishing. In addition to the Safari subscription library mentioned above, we support the advertising network of free information sites O'Reilly Network. We publish some books under "open publishing licenses" , allowing free distribution. We do this for various reasons: to raise the popularity of publications that might otherwise go unnoticed; to maintain the loyalty of the network community to our brand. And when selling a book through traditional channels no longer makes a profit, we prefer to make it available for free than to allow its complete disappearance from the market.
Many of our books we release on CDs, in the CD Bookshelf format, which is a collection of about half a dozen books of similar subjects.
And of course, we continue to publish printed books. The availability of free texts on the Web sometimes helps to advance the topic or the author (some books, such as The Cathedral and the Bazaar or The Cluetrain Manifesto, have become bestsellers in print form because of the fame acquired in the network). We provide online access to significant fragments of all our books so that the reader can get an idea of ​​them. We even found ways to integrate our books into dialog boxes of software help systems such as Dreamweaver and Microsoft Visual Studio.
Curiously, some of our most successful print / online hybrids emerged when we presented the same material in print and electronic versions in a different form. For example, most of the information contained in our best-selling book Perl Programming (print editions of more than 600,000 copies) is available electronically as part of the standard Perl documentation. But the complete set exists only in printed form - add the convenience of using a “paper” copy and a company cover to the advantages of the full edition. The presentation of the same information or publication in various forms increases both the volume and the wealth of the market.
As Heng Solo said in the first Star Wars series, “Give wooks what he wants!” - offer it to him in all possible ways that you can think of and at a fair price - and let me choose what it suits him best.
(Tim O'Reilly, “Piracy is a Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution”, Published in The O'Reilly Network. Translation: Anton Moskal (msk@tepkom.ru) ed. By T. Danilova. Initially translation published in the "Russian Journal" .)
Lesson 1. More than pirates, the author is threatened by obscurity.
Let's start with book publishing. Over one hundred thousand books are published annually, several million book titles are on sale. Less than ten thousand names are in any significant demand, and even the largest stores offer no more than one hundred thousand names to customers. Most of the books lie on the store shelf for several months, after which they return to the warehouse darkness, from where the only way for them is to waste paper. The authors think that it is worth finding a publisher, how come the fulfillment of all desires, but most of them are at the very beginning of a long chain of disappointments.
Sites like Amazon is a virtual showcase where all out-of-print books are displayed. These showcases - like a ray of light, illuminating the warehouse darkness, thanks to them books that otherwise would not have any chance to catch the eye can be found and bought. Authors who have been fortunate enough to return the rights to their books from the publisher often post them on the Web freely in the hope of finding a reader. The network helps the reader by simplifying the distribution of information about books and allows you to hear about the book and immediately buy it. But even in this case, only a few books live longer than a year or two after being published.
Many books lead a miserable existence in deserved oblivion, but many suffer simply from the huge gap between supply and demand. (They cannot find their reader, as he simply does not know about their existence.)
I do not know the exact volume of the complete catalog of CDs, but I believe that it is close in size to the catalog of books. Tens of thousands of musicians record their own discs on their own, but few lucky people make a contract with the publisher. Of these, only a few achieve a noticeable sales volume. And the overwhelming part of the contents of the audio catalogs for the consumer does not exist simply because this music is not for sale.
The catalog of films due to the high cost of film production is much shorter, but their enemy is still the same - obscurity. Thousands of independent directors are desperate for distribution of their creations. Some independent films, for example, the Danish "Dogma", come to the viewer. But the audience of most of them is limited to rare shows at local film festivals. Probably, the development of digital video will soon lead to the fact that making a film will be no more difficult than organizing a rock band in the garage or writing the Great Roman in the attic.
Lesson 2: Piracy - Progressive Tax
For most of those who create in obscurity, it is a great success to be known so well as to become a victim of pirates. Piracy is, in fact, a kind of progressive tax that can cut a few percent of the income of popular authors (I say “may”, since even this fact is not proven). Which means a huge benefit for those whose incomes grow with increasing popularity.
The current system of distribution of books, music and films has a strong lurch in favor of the "haves" against the "have-nots". Of the quality work, only a few receive large advertising budgets and are sold in large volumes. Most, in the words of the heroine of Tennessee Williams Blanche Dubois, depend on the “kindness of the passers-by.”
Removing barriers to common and ensuring continuous access of consumers to the entire contents of the catalogs, and not just to the most popular works, would be a blessing for the author. He would get an extra chance to make up his name, reputation and audience in collaboration with the entrepreneurs of the new information environment, who will become his tomorrow's publishers.
I found my nineteen-year-old daughter and her friends listening to countless groups of records found on Napster and Kazaa. Interested in the music they find, they usually go to buy CDs. Now my daughter has more CDs than I have collected in my entire life. Moreover, she introduces me to the things she likes, and as a result I also go for the disk. No, she is not downloading Britney Spears from the network, but forgotten bands from the 60s, 70s, 80s, 90s and recordings of their forerunners of other genres. This music is difficult to meet anywhere other than the network; but the find entails a focused search for CDs, recordings and other things. EBay online auctions do a great business selling similar things, while the RIAA overlooked these opportunities.
Lesson 3: Buyers prefer to be honest.
“Piracy” is a pretty strong expression. It means mass replication and resale of counterfeit products. When the music industry and the film industry apply it to peer-to-peer file sharing, they thereby move away from an honest discussion of the issue.
File sharing on the web is an activity of enthusiasts who exchange music and movies because they have no legitimate alternative. Piracy is illegal commercial activity, which is a typical problem for countries where existing copyright laws are poorly enforced.
O'Reilly publishes many books on the web. There are those who use it to distribute counterfeit copies. (For us, a serious problem, by the way, is not file-sharing networks, but the placement of our CD Bookshelf editions on public web servers, or the mass replication of disks and their sale on eBay). Pirated copies are annoying, but they hardly interfere with our business. We have not noticed any serious reduction in sales of printed books, which are simultaneously offered to the reader in electronic form.
Moreover, many violators respond to a polite letter asking them to remove this material. Those servers that ignore our emails are usually located in countries where our books are either not sold or are too expensive for local buyers.
Interestingly, our copyright activity is directed by the buyers themselves. We receive thousands of letters, where we are told about illegal copies or websites violating our rights. Why? Because readers appreciate our company and our authors and want our work to continue. They know that there is a legitimate way to access our books on the Web — our subscription service Safari Books Online , which costs only $ 9.95 a month, and as a result, they understand that free copies are illegal.
A similar example is provided by John Schulle, a former technical director of Softlock, who collaborated with Stephen King in his experiment with the e-book, “Riding the Bullet”. Softlock used a tough copyright control scheme 2, hoping to reduce distribution costs as a result of the “superdistribution” effect, when a buyer sends a copy to friends who, having received it, just have to go and download the key to use it. But it turned out that most of the copies were downloaded from the central site, and only a few passed on. Softlock surveyed customers to find out why they rarely pass text along the chain. To the surprise of the publisher, it turned out that readers simply did not understand what was intended and did not do it, because "they thought that this would not be good."
The easiest way to ensure that consumers stop sharing illegal copies of music and movies is to provide them with a reasonable alternative at a fair price.
')
Lesson 4: The shoplifting problem is much more serious than piracy
Only a few place their books on public servers in order to gain commercial benefits. Those who are engaged in piracy - organized replication of content for resale - offer CDs with PDF or HTML files of dozens of our books via eBay. Despite this, we see no need for either stricter copyright legislation or special software protection, since the existing laws are quite enough to prosecute a few malicious pirates.
We have no significant problems with piracy in the United States and Europe. The fact that Microsoft software has been available on warez sites for many years (and now on file-sharing networks) did not prevent it from becoming one of the largest companies in the world. Estimates of “lost” revenues are based on the assumption that illegal copies would otherwise be paid. On the other hand, this does not take into account sales, which took place due to the popularity that the product scored thanks to illegal copies.
The problems created by pirates are, in the worst case, similar to ordinary shoplifting — the inevitable cost of trade.
In a word, we, as a publisher that publishes many books in electronic form, assess piracy as a cross between shoplifting and some kind of tax. From my point of view, the theft of a single copy of the book is an even greater danger and can lead to losses far greater than its cost. If the store has a single copy of a book, tape or disk, theft removes it from the potential buyer’s attention, and since the store’s accounting system shows that the book is not sold, the order may not be renewed for weeks or months, perhaps more than ever.
I have asked many times in stores why they don’t have a single copy of any of my books. After a quick glance at the credentials, I was usually answered: “But we have one. The system shows that we have one copy, and it has been unsold for several months. Therefore, we see no reason to order more. ” To convince the seller that the book is not sold, most likely because it is no longer on the shelves, is not so easy.
E-books can not be out of stock and therefore always have a chance to be sold without being affected by the terrifying inefficiency and arbitrariness of the distribution system.
Lesson 5: File sharing networks do not threaten the publication of books, music and movies. They threaten current publishers.
The recording industry and film industry are suggesting that file sharing networks will inevitably destroy their business.
Those who say this do not understand the nature of publishing. The role of the publisher cannot be destroyed by technology, since its necessity is based on simple mathematics. Millions of buyers and sellers cannot find each other without one or several intermediaries, who, like the system of transformer substations, divide the market into more visible parts. The mediator always has a place. Publishers reduce authors and trade, trade reduces buyer and publisher. Wholesalers mediate between small publishing houses and retail. Distributors of specialized products are looking for new distribution channels.
Those of us who saw a new publishing environment in web space also saw how this medium evolved in less than ten years. At the dawn of the Network, it was argued that an era was coming, where there would be no place for a mediator and that everyone could become a publisher. But soon the owners of personal web pages began to pay for help in increasing the "visibility" of their resource in Yahoo !, Google and other search engines (online analogues of Barnes & Noble and Borders 3), and web authors were happy to write for sites like AOL and MSN or for their "technological" counterparts - CNET, Slashdot, O'Reilly Network and other web publishers. At the same time, authors from Matt Drage 4 to Dave Wiener and Cory Doctorow 5 made a name for themselves as publishers of new media.
As noted by the author of the book “Guns, germs and steel,” Jared Diamond, mathematics is behind the complication of any social system.
In the new technology, there is nothing that changes the basic mechanism by which millions of products find millions of buyers. Methods of grouping and selection may vary with technology, but the need for them remains always. Google search, in ranking of pages taking into account the implicit recommendations of users, is similar to how trade uses sales statistics to generate orders.
The question is not whether the role of creators or publishers is reduced to zero due to technologies like file-sharing networks. The question is how authors use technology to promote their works. And for the publisher, the question is whether he will understand his role in the new environment before anyone else does. Publishing is like an ecological niche; new publishers are rapidly filling those areas where the “old” have failed.
If we turn to the basics, we will understand that publishing is not only about creating a product, but also about the difficult work of creating and maintaining a reputation. People go to Google or Yahoo !, in Barnes & Noble or Borders, HMV or MediaPlay, because they are sure that their search will be crowned with success. And they turn to the services of publishers like Knopf or O'Reilly because they trust our ability to find interesting topics and good authors.
But back to the file sharing discussion. How do people search for recordings using Kazaa or other file sharing systems that are true to Napster's precepts? First, they are looking for something with which they are already familiar. But the search for famous artists or works has fundamental limitations, since it relies on a limited "namespace" (names of authors / titles of works), external to file-sharing systems. To really oust the existing system of distribution of sound recordings, you need to develop your own mechanism for product promotion.
And we see that these mechanisms arise. File exchange systems rely on the most effective marketing mechanism: oral recommendations. But anyone who is familiar with the history of the media, knows that the search, based on existing knowledge and oral recommendations, allows you to collect only "low-hanging fruits." As the market develops, commercial marketing develops, and a long chain of intermediaries, typical of the existing media market, is built up step by step.
New media do not crowd out, but rather strengthen and expand existing markets, at least in the short term. It is possible to make money filling the gap between new and old environments. For example, the development of file-sharing networks has intensified trading on eBay with discs and compact discs that are not available through the usual distribution channels used by the recording industry.
Over time, it may happen that online music services supplant CDs and other material media in the same way, recording pushed the periphery of music publishers and turned the piano from a home music center into a nostalgic piece. But the role of performers and music publishers is preserved. The question, therefore, is not whether book publishing, sound recording or film production dies, but only who will publish.
Lesson 6: "Freebie" over time supersedes high-quality paid service
A question to my readers: how many of you continue to receive e-mail using the UUCP protocol, or the old “free” Internet? And how many of you pay a monthly $ 19.95 per month (or more) to an Internet access provider? How many of you watch “free” terrestrial TV and how much does $ 20- $ 60 per month pay for cable or satellite TV? (I don’t mention renting video tapes and DVDs and buying copies of your favorite movies.)
Services like Kazaa thrive in the absence of competitive alternatives. I can confidently say that as soon as the music industry offers access to the same recordings without the inconvenience of copy protection, with more complete and accurate catalog data and other capabilities, it will receive hundreds of millions of subscribers. Provided that it will not wait long. Otherwise, Kazaa itself will begin to provide such a paid service (if problems of a legal nature are resolved). The development of publishing based on file-sharing networks will take place just as the multibillion-dollar media business AOL, MSN, Yahoo !, Cnet, and others took place on the “free” web.
But why pay for a record that you can get for free? For the same reasons for which you buy a book, instead of borrowing it from the library, or buying a DVD with a film that you can watch on TV or rent. Comfort, ease of use, choice, the ability to find what you want and the joy of owning a thing of value to you.
The current state of file-sharing networks is estimated at best as mediocre. Students and those who have free time may find their quality acceptable. But numerous copies of the same work of obscure quality, the lack of permanent access to the works, incorrect identification of the performer or play and other shortcomings - all this leaves much to be desired.
Opponents may argue that the Network clearly demonstrates the reality of their fears that advertising revenues do not cover the cost of “free” content, and that subscribing to such a service will not become a commercially successful model. However, I have not finished.
Subscription services are booming. The pioneers of this market are computer professionals. For example, the monthly growth rate of O'Reilly Safari Books reaches 30%, and today this service is a multi-million revenue source for us and other publishers - project participants.
Most critics overlook the fact that the Internet itself is already being sold as a subscription service. All we are talking about is the creation of additional paid services. Moreover, there are already several vertically integrated Internet providers (I would especially like to mention AOL Time Warner), which provide connectivity as part of the “basic” package and at the same time own huge content libraries offered for an additional fee.
When considering subscription content services, the “television” analogies are instructive. Free TV, funded by advertisers, has largely been supplanted or, more precisely, supplemented by a paid subscription to cable television. Moreover, revenues from subscriptions to the basic package are complemented by various sets of pay channels. One of these channels - HBO is now the most profitable for television networks. Like this example, providers pay $ 19.95 per month for the equivalent of a “basic package”. But the ability to offer additional paid music or other services similar to television pay channels remains out of sight of current publishers.
Another conclusion from the television experience is that, with the exception of special cases, people prefer a subscription to a one-time viewing fee. Moreover, a subscription to one channel a consumer prefers to subscribe to several channels at once. So, people subscribe to a package of feature film channels, a package of sports channels and the like. The per-song “per song” trial balloons might work, but I believe that in the long-term, a monthly buffet-style subscription will prevail in the market, perhaps segmented by different musical genres.
Lesson 7: You can do things differently.
The study of other media markets shows that the only right decision does not exist. A successful company maximizes revenue in all directions, with the understanding that the only real opportunity to provide this income is to satisfy the needs of the person who pays the bills as fully as possible.
At O'Reilly, we have been experimenting for several years with the distribution of books through the Web. We understand that we must offer an attractive alternative to the consumer before others do. Hawaiian proverb says: "no one will give tomorrow." Competition with “freebies” makes us invent new ways of publishing. In addition to the Safari subscription library mentioned above, we support the advertising network of free information sites O'Reilly Network. We publish some books under "open publishing licenses" , allowing free distribution. We do this for various reasons: to raise the popularity of publications that might otherwise go unnoticed; to maintain the loyalty of the network community to our brand. And when selling a book through traditional channels no longer makes a profit, we prefer to make it available for free than to allow its complete disappearance from the market.
Many of our books we release on CDs, in the CD Bookshelf format, which is a collection of about half a dozen books of similar subjects.
And of course, we continue to publish printed books. The availability of free texts on the Web sometimes helps to advance the topic or the author (some books, such as The Cathedral and the Bazaar or The Cluetrain Manifesto, have become bestsellers in print form because of the fame acquired in the network). We provide online access to significant fragments of all our books so that the reader can get an idea of ​​them. We even found ways to integrate our books into dialog boxes of software help systems such as Dreamweaver and Microsoft Visual Studio.
Curiously, some of our most successful print / online hybrids emerged when we presented the same material in print and electronic versions in a different form. For example, most of the information contained in our best-selling book Perl Programming (print editions of more than 600,000 copies) is available electronically as part of the standard Perl documentation. But the complete set exists only in printed form - add the convenience of using a “paper” copy and a company cover to the advantages of the full edition. The presentation of the same information or publication in various forms increases both the volume and the wealth of the market.
And the last lesson:
As Heng Solo said in the first Star Wars series, “Give wooks what he wants!” - offer it to him in all possible ways that you can think of and at a fair price - and let me choose what it suits him best.
(Tim O'Reilly, “Piracy is a Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution”, Published in The O'Reilly Network. Translation: Anton Moskal (msk@tepkom.ru) ed. By T. Danilova. Initially translation published in the "Russian Journal" .)
Source: https://habr.com/ru/post/71240/
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