Another Answer To Dealing With Piracy: Keep Creating Better Tools & Business Models

from the they-keep-on-coming dept

We've already discussed, a few times, how the tech/startup industry has repeatedly given the entertainment industry the "solution" to piracy, in the form of new tools, services and business models, which are helping many "compete with free" by offering something better... all without regulation. Unfortunately, the entertainment industry still seems to think that the only solution is to pass laws that try to do the impossible: stopping piracy. This is the wrong approach. They're not at all focused on revenue maximization, they're so obsessed with the idea that infringement represents a "loss," that they're missing out on the fact that they're missing tons of opportunities to make more money.

Dante Cullari, the founder and CEO of Beat-Play (and a musician himself), has a post up on Music Think Tank, noting both the impossibility of stopping file sharing, and wondering why the industry doesn't embrace new solutions (like his, of course) that allow them to compete. He further notes that the solutions the industry are suggesting clearly show a lack of understanding of how people use the internet. Putting up a paywall? Good luck with that:
To me it seems pointless to even bring up the prospect of a subscription service, or even a pay-as-you-go model as a viable solution for a future sustainable industry model. This is because the internet, now the basis of content consumption, is like a huge river of information. A paywall is like a little pebble being thrown into it. The water in the river has no trouble getting around the pebble. Paywalls will never solve the piracy problem, and damming up the whole river, as we’ve seen with SOPA, will not be easy, and most likely will never happen.

Really though, I don’t think that the actual problem that the rights holders have with piracy is the copying, but rather it is the loss of revenue brought about by the copying that motivates the rights holders into action. They want to be rightly compensated for their work. Who wouldn’t? The problem is that the business model - the mechanism that they’ve chosen to help them receive compensation, is not only a little dated, but it has been proven ineffective in this new environment that is very different from the one we saw even 15 years ago.

The rights holders need a new mechanism for compensation. It’s that simple. Why they’re trying to preserve the one they have, I really don’t know. But the sooner they accept the fact that it is broken and it’s time to get a new one, the happier they will be.
Of course, plenty of us have been arguing for over a decade that it's better to recognize the reality of the market, and then use that to your own advantage. Perhaps early on there weren't enough tools and services to make such new business models a reality, but these days it's impossible to argue that such alternative revenue sources no longer exist.

Beat-Play's model is based on using music from artists within brand-driven games (for example a Facebook skiing game, paid for by a ski apparel company, using a band's music), which lets fans hear free music, while also allowing companies to better track who their audience is. This really is an example of the "ads as content, content as ads" model we've discussed for years. I have no idea if Beat-Play will work. Execution matters quite a lot, of course, as does the willingness of those in the music industry to recognize that this is a viable path forward, but conceptually the idea makes some sense. It doesn't try to force consumers into a model they don't like. It doesn't try to be annoying or interruptive. It just tries to set up a system that lets fans do what they want, while also giving content creators a good way to get paid as well. That seems like a solution that's a lot more reasonable... and a lot more likely to lead to more revenue... than something like SOPA.

Filed Under: business models, file sharing, startups
Companies: beat play

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    Dog On a Teflon Floor (profile), 9 Feb 2012 @ 7:38am


    Hmm. The internet kind of sounds like radio with a worldwide audience huh? How much more promotion do you need?

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