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Digital Media Hijinx on Conan…

Colbert may have done this sort of thing first, but he didn’t bring manatees into the picture…

http://www.nytimes.com/2006/12/12/arts/television/12mana.html?_r=1&8dpc&oref=slogin

format wars - Netflix supports a truce?

In the past, BetaMax or VHS had to win - physical inventory costs made two formats impractical. This time around, in the battle of HD-DVD vs. Blu-ray, does one format have to win? I still see many pressures for a dominant format (e.g. desire for a movie to play on a friend’s player). Nevertheless, it seems like the presence of Netflix will reduce the pressure for a single format previously applied by your local video rental store. Netflix subscribers can list their format of choice in their profile. Because so much of Netflix’s inventory is “stored” in its subscribers living rooms and mailboxes, the impact of owning multiple formats of each title is drastically reduced.

The article that got me thinking about this: http://arstechnica.com/news.ars/post/20050619-5011.html

big ups to PandoraFM

A big shout-out to PandoraFM for some free promotion of >play. If you haven’t checked it out, PandoraFM’s a great way to track your Pandora listening in Last.fm. I wish there was something similar for MOG

Google bringing ads to User Generated Content

Well, it looks like Google is ready to start talking publicly about their plan to begin monetizing UGC with ad revenue (as if Mentos wasn’t getting enough positive buzz from the Mentos/Diet Coke vids anyways). Also, interesting stuff in the post about how Google searches videos, but it fails to mention the detection software used to spot copyrighted audio content. I’m guessing that such information comes in pretty handy come Search time as well…but enjoy!
http://www.beet.tv/2006/11/update_on_googl.html

DRM giving content power over consumer electronics manufacturers?

One of the questions we have for our copyright panel is: “Do technologists have increased market power due to their disruption of traditional content creation and distribution?”

As a counterpoint, I enjoyed this piece of news about Universal charging Microsoft for each Zune player sold.  Perhaps content providers are actually the ones finding increased market power due to non-standard DRM?  They can hold up entrants to the consumer electronics market and extract a fee for permission to use their content?  It reminds me of the ever-increasing programming fees cable and satellite companies have been paying (and passing on to the consumer).

Behind the Scenes: GooTube

Whether the details in this post are true or not, it highlights the intersection of business models and legal frameworks, and brings up some fascinating issues and strategies that come into play when thinking about investing in businesses based on user-submitted content.

Post is here:

http://www.blogmaverick.com/2006/10/30/some-intimate-details-on-the-google-youtube-deal/

Deliveries in the Rear?

A comment on the Enterprise 2.0 panel:

The way I see it, the new collaborative technologies are coming in the backdoor.  CFOs don’t give their CIOs budget to implement new stuff.  CIOs only have the freedom to pay for “must-haves.”  Even if CIOs did have budget, they can’t fully understand what the company departments need.

Business managers have much smaller budgets, but they’re much more flexible budgets than the IT budget.  And the business managers have corporate credit cards.  The business manager can buy the software that helps her team work better and the controller doesn’t bat an eye when a department spends and extra $10K.  If the CIO spent $10K per business manager, the CFO would freak out.  If every business manager spends $10K, it looks like a general cost increase (uncontrollable).

I expect we’ll see collaborative technologies like JotSpot, WebEx, and Salesforce.com purchased by business managers who value them.  Once the CFO learns every department has an account, he’ll direct the CFO to consolidate the accounts and negotiate a better rate.  It’ll be a change he can forecast and budget for so the financial analyst who got stuck with IT doesn’t get reamed in the close meeting for the next financial period.

afternoon keynote: SNOCAP CEO Rusty Rueff

I’m excited to note that Rusty Rueff, CEO of SNOCAP, will be delivering the afternoon keynote at >play. Previously Rusty was a SVP at Electronic Arts. I’ve seen Rusty talk before - I’m looking forward to hearing what he has to say with the floor and microphone to himself. From what I’ve heard and read, SNOCAP is doing some very interesting things experimenting with new ways for artists to distribute content.

Machiavelli and Digital Media

In Massachusetts, there is an old ordinance declaring goatees illegal unless you first pay a special license fee for the privilege of wearing one in public.  In New York, one can supposedly be fined $25 for flirting.  Society deemed it inappropriate for men on a street corner to whistle and “flirt” with passersby; so they created a law.  The implication is that laws and policy are not always “right.”  In fact, it may be ok to flirt in New York or grow a goatee in Massachusetts despite what the law says.  Lawlessness may in fact reap good results – i.e. further defining societal norms and beliefs in a new context.   

I still struggle with the moral dilemma that was Napster.  Thousands of people broke the law for personal gain at the expense of others (i.e. content providers).  However, the music industry has  reevaluated what is permissible provided that digital distribution is both possible and sought after.  As a result, consumers are better off now without breaking the law.  I never supported music swapping (from a user perspective), but I can’t say I’m not happy with the outcome.   

The problem for technologists is that they are the ones enabling lawlessness.  So when is it acceptable for technologists to wash their hands of users’ “sins”?  When technologists have visions of a future where consumers are better off (legally), how obligated are they to receive permission from content owners first?  When do we say that diplomacy has failed and take action?  If Napster had been committed to diplomacy (i.e. cooperation with the industry), would society be better or worse for it?  More importantly, does the end justify the means?

Personally, I believe it depends.  If a business model derives value only via illegal behavior, the chance of progress and a positive outcome just isn’t compelling enough.  Otherwise, I’ll go with Machiavelli and say the end justifies the means.

looking for lessons

I thought I’d start off the discussion around copyright with a link I received from one of our panelists for this year’s >play conference.

It seems copyright is the one area of law most affected by technological progress. Technologists relentlessly develop new methods of creating and disemminating content. These shifts disrupt existing media business models structured around an earlier paradigm and technology.

Copyright law has always been a balance between incentives for creation and disemmination. What is clear is that technological shifts affect that balance. What is less clear is exactly how those shifts affect the balance. It’s easy to point to anectdotal evidence of how changing times have benefited one party or hurt another. A more difficult task is to take a step back and take a more comprehensive view of whether copyright is in need of recalibration, or whether forces will push the market toward a happier equilibrium. It can take years before we receive any clear sense of long-term implications.
Looking back, we’ve seen the music industry shift from targeting disruptive technologists with litigation toward finding ways to explore new distribution methods and channels. Similarly, successful technologists have been those displaying a willingness to work with content providers and share the benefits of new services. As a quick example, compare the popularity of TiVo and ReplayTV. Which one do you think was more cooperative with Hollywood?

So, where’s the lesson in all of this for current or future entrepreneurs? As much as I think it’s important to work with content providers, a contrast of the success of YouTube and more controlled sites is interesting. Allowing technology products to be designed solely by the concerns of past business models results in products consumers won’t touch.

There’s only so much we can do to change the law. A more efficient path might be to accept the law as is. It can provide a roadmap for feasible business models. An example that comes to mind is statutory fees for music - an opportunity to build a product using others’ content without having to negotiate before acquiring much leverage.
That’s my take. I’m looking forward to hearing what our panelists have to say. They are rich in experience with building businesses from the ground up. How did the law impact execution of their initial plans? What advice do they have for budding entrepreneurs? When is the appropriate time for entrepreneurs to begin thinking about how law might affect their business model? What about situations when it’s not clear what is and is not allowed?
But, nevermind what I want to hear our panelists talk about. I’d love to hear what you have to say, or what questions you have for our panelists. Feel free to leave a comment on a message or write your own post. We’ve set up a number of categories for you, and are happy to create more. This is your conference - we’re here to make it a fun experience for all.