{"id":1988,"date":"2008-06-07T14:31:03","date_gmt":"2008-06-07T21:31:03","guid":{"rendered":"http:\/\/connectreflect.wordpress.com\/?p=151"},"modified":"2008-06-07T14:31:03","modified_gmt":"2008-06-07T21:31:03","slug":"giving-it-all-away","status":"publish","type":"post","link":"https:\/\/shaunbelcher.com\/news\/?p=1988","title":{"rendered":"Giving it all away"},"content":{"rendered":"

Bits, sovaldi<\/a> Bands and Books<\/span><\/h1>\n

New York Times<\/span><\/p>\n


\nBy <\/span>PAUL KRUGMAN<\/span><\/a><\/span><\/p>\n

Published: June 6, 2008<\/span><\/p>\n

Do you remember what it was like back in the old days when we had a New Economy? In the 1990s, jobs were abundant, oil was cheap and information technology was about to change everything.<\/span><\/p>\n

Then the technology bubble popped. Many highly touted New Economy companies, it turned out, were better at promoting their images than at making money \u2014 although some of them did pioneer new forms of accounting fraud. After that came the oil shock and the food shock, grim reminders that we\u2019re still living in a material world.<\/span><\/p>\n

So much, then, for the digital revolution? Not so fast. The predictions of \u201990s technology gurus are coming true more slowly than enthusiasts expected \u2014 but the future they envisioned is still on the march.<\/span><\/p>\n

In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product \u2014 software, books, music, movies \u2014 the cost of creation would have to be recouped indirectly: businesses would have to \u201cdistribute intellectual property free in order to sell services and relationships.\u201d<\/span><\/p>\n

For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because \u201cenough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.\u201d<\/span><\/p>\n

Indeed, it turns out that the Dead were business pioneers. Rolling Stone recently published an article titled \u201cRock\u2019s New Economy: Making Money When CDs Don\u2019t Sell.\u201d Downloads are steadily undermining record sales \u2014 but today\u2019s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through \u201cpublishing, touring, merchandising and licensing.\u201d<\/span><\/p>\n

What other creative activities will become mainly ways to promote side businesses? How about writing books?<\/span><\/p>\n

According to a report in The Times, the buzz at this year\u2019s BookExpo America was all about electronic books. Now, e-books have been the coming, but somehow not yet arrived, thing for a very long time. (There\u2019s an old Brazilian joke: \u201cBrazil is the country of the future \u2014 and always will be.\u201d E-books have been like that.) But we may finally have reached the point at which e-books are about to become a widely used alternative to paper and ink.<\/span><\/p>\n

That\u2019s certainly my impression after a couple of months\u2019 experience with the device feeding the buzz, the Amazon Kindle. Basically, the Kindle\u2019s lightness and reflective display mean that it offers a reading experience almost comparable to that of reading a traditional book. This leaves the user free to appreciate the convenience factor: the Kindle can store the text of many books, and when you order a new book, it\u2019s literally in your hands within a couple of minutes.<\/span><\/p>\n

It\u2019s a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books.<\/span><\/p>\n

How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won\u2019t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.<\/span><\/p>\n

Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors\u2019 other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it\u2019s good enough for me.<\/span><\/p>\n

Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won\u2019t work equally well for everything. To take the obvious, painful example: news organizations, very much including this one, have spent years trying to turn large online readership into an adequately paying proposition, with limited success.<\/span><\/p>\n

But they\u2019ll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we\u2019ll have to find business and economic models that take this reality into account.<\/span><\/p>\n

It won\u2019t all happen immediately. But in the long run, we are all the Grateful Dead.<\/span><\/p>\n

<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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