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Protecting Yourself From Consumers Is Not A Recipe For Success

from the if-you-do,-you're-making-a-mistake dept

William Patry continues to use his new blog to make some great points that bear repeating. In a new post discussing Theodore Levitt's "marketing myopia" concept (something I believed in long before someone showed me Levitt's work), he points out how the industry seems to miss this basic point: that it's not selling "property" to people, but a benefit the customer wants. If something else better satisfies that benefit, customers will go there. From there, he points out that the entertainment industry is way too focused on property, and acts as if copyright is there to provide a special protectionist plan for them alone:
I believe that too many companies in the copyright industries appear oblivious to the very idea that consumers have needs; to them, consumers are passive purchasers of what those companies decide to sell. And if they decide not to sell at all, too bad; that's their prerogative as a property owner. Copyright is the method by which control over consumers is achieved (or the decision not to sell is enforced). Copyright owners' adoption of control as their principal business model results in closed systems, in which copyright owners try to tightly control everything connected to their works: which play back devices will be offered to the public; what types of access controls will be interposed before consumers can ever see, hear, or in the case of books or other literary works, even read a snippet of the work; the time period during which consumers will have access to the work; how many times can consumers see, hear, or read the work; in what format will consumers be able to access the work; what will they be able to do with the work once they finally access it.

Copyright owners speak of this control as protecting their property (the subject of next week's blogs), but once your focus is on protecting yourself from your customer, you are in deep trouble. The government did not grant a monopoly in order to simply horde it: copyright is not a TARP fund. There is a huge divide in perception on this point: when copyright owners succeed in enjoining, shutting down, or crippling services that give consumers what they want, e.g., MP3.com, Launchcast, or RealDVD software, copyright owners see a threat removed, but consumers see an industry determined to thwart their desires. (I do not speak here of those who want simply to copy works as a substitute for paying for them). When is the last time (or maybe even a first time), copyright owners lobbied Congress for greater consumer access to their works, or sued to increase such consumer access?

This perception gap is huge and is critical to understanding the divided nature of the Copyright Wars. Control is seen as essential by the content industries, while consumers see it as a dagger through the heart of the very reason for copyright. All businesses should be free to commit suicide by putting their interests ahead of their customers (unless they are financial institutions, apparently, or insurance companies operating as hedge funds), but they should die on their own and not stay propped up a government granted monopoly.
Great stuff, as per usual from Patry. In the post, he also discusses how he, too, at one point (when he worked at the Copyright Office) was pulled by this sway of control, as he was among those who pushed to add protections for building design, but was eventually convinced otherwise by a colleague, who pointed out that copyright wasn't the reason new buildings would get built.


Reader Comments (rss)

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  1.  
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    jjmsan (profile), Aug 17th, 2009 @ 3:57pm

    Myopia

    I think this could be applied to most of the service industries. The outlook has become that the business has a right to make a profit and so anything it does to make more money is justified. Newspapers Airlines and other limited access businesses no longer cater to their customer base but view it as something from which to extract money. Profit becomes something they are entitled to not something they have to earn.

     

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  2.  
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    inc (profile), Aug 17th, 2009 @ 4:21pm

    Re: Myopia

    amen

     

    reply to this | link to this | view in thread ]

  3.  
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    Anonymous Coward, Aug 17th, 2009 @ 4:30pm

    Slowly very slowly the US is adopting the Italian psychology of government and business. They are out to get me, they are trying to steal from me, and they have more power than I do but there are so many of us little people that the powerful bully can not keep track of us so to hell with them.

     

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  4.  
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    Anonymous Coward, Aug 17th, 2009 @ 4:49pm

    Kids see media consumption differently

    I teach college students. I have noticed that for the past couple of years that the students see their consumption of media differently. Buying CD's and DVD's does not seem nearly as important to these guys as it used to be. They are generally quite happy to take their media as they find it as long as it is convenient. If copyright owners want to make things inconvenient, these kids will generally just move on to something else. They are willing to pay for some stuff, if they see the value of it, but they are not going to be inclined to pay exorbitant prices.

    Catering to the demands of the next generation of young people is going to be a huge challenge, and frankly, I don't think the major current players in the media industries are up to it; they are too blinded by looking backwards to their golden age. My guess is that there is going to be a new set of companies willing to serve these guys by accepting much lower profit margins and finding ways to deliver content on various platforms. Heavily walled gardens are going to be the losers in this battle.

     

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  5.  
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    John Fenderson (profile), Aug 17th, 2009 @ 4:49pm

    Re:

    Security through obscurity is a fool's game.

     

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  6.  
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    Anonymous Coward, Aug 17th, 2009 @ 5:09pm

    "Great stuff, as per usual from Patry. In the post, he also discusses how he, too, at one point (when he worked at the Copyright Office) was pulled by this sway of control, as he was among those who pushed to add protections for building design, but was eventually convinced otherwise by a colleague, who pointed out that copyright wasn't the reason new buildings would get built."

    Sounds like a former drunk and AA member walking around preaching to people in a bar, and just as annoying.

     

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  7.  
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    NullOp, Aug 17th, 2009 @ 7:45pm

    Businesses believe they are ENTITLED to make a profit! And whats more they believe they are entitled to make the profit THEY DICTATE. In America today its not enough to make a profit, it must be an obscene profit!

     

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  8.  
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    Anonymous Coward, Aug 17th, 2009 @ 7:51pm

    Re:

    They aren't ENTITLED to make a profit, what they are ENTITLED to is protection from someone else making a profit off their ideas, patents, and copyrights.

    They are ENTITLED to not have to compete with themselves.

     

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  9.  
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    Anonymous Coward, Aug 17th, 2009 @ 8:37pm

    Re: Re:

    >>They aren't ENTITLED to make a profit, what they are ENTITLED to is protection from someone else making a profit off their ideas, patents, and copyrights.

    We agree on what you said; they aren't entitled to a profit and it is wrong to violate copyrights or valid patents (Ideas is problematic; there is no legal protection for ideas by themselves). However, the common perspective of the Media execs is that they are entitled. They got used to being fat and happy in the 1990's, and they don't understand that they do not get a permanent gravy train by just doing the same old things they did back in their glory days. Their second problem is that they are driven by a zero-sum philosophy that says if someone else is making money, they are losing it. This means that they are virtually unable to enter into any type of partnership if it leaves the other party making a profit; the idea of synergistic relationships is a totally foreign concept to modern business execs in the media industry.

     

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  10.  
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    Brian J. Bartlett, Aug 18th, 2009 @ 2:44am

    Almost right.

    Most of you have the general idea but this sense of entitlement is shared by another class in the economic world, but I need to lay in a bit of background first. I have a degree in economics where I mostly focused on econometrics (modeling), computer science, and experimental design to apply against all of the various sub-disciplines in economics and other social sciences. However, this came later in life. I spend most of my life as a systems guy: analysis; engineering; integration; and so forth among all the engineering/science disciplines. Polymath to the extreme. One thing I caught on to early in life is when examing how things are done/not-done is that you can find an analogous example, usually in another field, discipline, eco-system, etc. What I am seeing in the media industry, entertainment, political-social-economy, heck the whole 'system, is that this entitlement mentality didn't just come from no where. It just spread (meme?) from a particular world-view of who/what the customer is.

    If you think of the products of the entertainment/media/related industries as a legal, or even better, illegal drug, dealers you can quickly pick up the paradigm happening here. Those 'businesses' think they have the consumer 'hooked' courtesy of our system of doing things and this entitles them to deliver the 'drug' at whatever profit level they want, however they want, and whenever they want. What they don't get is that the product here is a substitutable good which was most emphatically not the case in the past.

    If I don't like what's on TV, cable, whatever, I'll play some music, read a book, go online and find someone else's good, with or without the constraints of my prior dealer, applying anymore. I can fire my dealer! If he doesn't like it, tough. I can get my drug of choice elsewhere, and furthermore it costs next to nothing to produce that drug, I can consume it practically anywhere, and there are a hell of a lot more (substitute) drugs out there that I can choose from. Lastly, it's is almost impossible to contain the market of drugs since it literally spans the world in more delivery methods than can ever be affordably monitored.

    Techdirt is one of my drugs of choice (happily). So are the Economist (of London), St. Petersburg Times (Russia), BBC World Service, a raft of internet radio stations playing music most people don't know even exists (India, Central Asia, etc.), and yes, more than a few publishers of books who along with the authors are more than happy to let me download their books in the format of my choice (Baen Books, highly recommended) because they know I'll buy the hardbacks and paperbacks too. They trust me. Some dealers have a clue. [Evil thoughts about Apple here.] I think this analogy, while it will certainly be unpopular among the media elite (to say the least, not that I have any respect for them either), holds up quite well.

    One final thought. Gangs like to fight turf wars for dealing rights in certain areas. We see that in the media world as well. I think that will spread of digitisation to other sectors as well. [Apologies for the ramble but this just hit me (pun intended) while I was reading this article.]

     

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  11.  
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    ethorad, Aug 18th, 2009 @ 4:29am

    Copyright Wars?

    Surely a better name would be the Clone Wars?

    Unless someone has already copyrighted that ..

     

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  12.  
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    Dark Helmet (profile), Aug 18th, 2009 @ 6:17am

    Re: Almost right.

    Brian, that was one of the most thoughtful, provacative comments I think I've ever read here. I'm not a polymath guy, I'm more of a history/sociology guy, so I have only one thing I'd like to inject into your thinking.

    "If I don't like what's on TV, cable, whatever, I'll play some music, read a book, go online and find someone else's good, with or without the constraints of my prior dealer, applying anymore."

    One of the steps we have seen and are continuing to see is the consolidation of media in this country and, to a lesser extent, the world. There is something like 7 companies tht own EVERY movie/print/music/TV/cable/ISP/publisher in the United States. They are taking your option of firing your dealer away, at least if you want any kind of entertaiment or information media.

     

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  13.  
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    John Fenderson (profile), Aug 18th, 2009 @ 9:36am

    Re: Re:

    "what they are ENTITLED to is protection from someone else making a profit off their ideas, patents, and copyrights."

    Err, not really. That's not an entitlement, that's a business deal between them and society which allows them a limited monopoly in exchange for giving their ideas, patents and copyrights to the public domain after a finite period of time.

     

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