Last night I ran into this clip of Jeff Jarvis:

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And it was kind of an eye opener to me. He actually somewhat said some of the same things that I have said before (which could mean that I have a point) but his words just kind of made the whole problem crystal clear to me.

The businesses that are currently struggling are the ones that are desperately trying to keep their media of distribution. Again – distribution is the key word here, because that is the one thing  the internet can do better than any distribution network or channel have been able to before – it gives every single person the ability to chose exactly what he wants, when he wants it and in what form.

As I have previously mentioned Record companies are struggling because they still see themselves as “record distributors” – they have been, and still are, focused on the media of distributing the music. But the actual product that they are selling is not records. It is music, and if people want that as an MP3 or on their cell phone, that shouldn’t really matter. But if you focus all effort on maintaining music on cds because that is what used to make you money, then you will fail miserably.

Newspapers are struggling because they still see themselves as “papers” – they have been, and still are, focused on the media of distributing the news. But the actual product that they are selling is not paper. It is journalism, and if people want that in an RSS feed or on their cell phone, that shouldn’t really matter. But if you focus all effort on maintaining news on paper because that is what used to make you money, then you will fail miserably.

Advertising agencies are struggling because they still see themselves as “advertisers” – they have been, and still are, focused on the media they reach consumers by. But the actual product that they are selling is not advertising. It is telling companies how to best reach their customers, and if people want to be reached on blogs or on twitter, that shouldn’t really matter. But if you focus all effort on maintaining talking to your customers through advertising because that is what used to make you money, then you will fail miserably.

The list is long but you catch the drift.

In fact every single thing the major records labels have done the past 10 years have been focused on one thing: Preserving their CD-sales. Digital Rights Management, changes of copyright law, spreading fake mp3s online, lawsuits against people who download, shutting down sites … everything is aimed at bringing the CD back.
Of course the real problem is that nobody wants CDs anymore. Not because you can get music for free online, but because downloading an mp3 is more convenient!
And when you realise that convenience is the number one reason people download their music instead of buying it on a cd, then it is very clear why all the things the record labels do in order to maintain their CD-sales are failing.
Digital Rights Management are designed to make it impossible to copy music off a cd, or in case of a legally purchased mp3, make it impossible to copy your mp3 to other devices. In other words DRM is by design an inconvenience.
The changes to copyright law the record labels have lobbied through Congresses and Parliaments all over the world is meant to do exactly the same: Outlaw distribution of music on anything else than a disc.
But none of the things the record labels do, are facing the actual problem at hand: If you listen to your music on your laptop at home and on your iPod when you are out, then it makes very little sense to travel to a store in order to buy your music on a piece of plastic.
It all comes down to very basic business knowledge: It is very hard to sell people stuff if you have a lesser product than the competition.
Record labels have ample opportunity to offer music fans a product that is far superior to what pirates can offer on peer2peer. They just have to forget about making money on distributing CDs (I wrote about that here some time ago)

Anyways … that whole rant came from a little experience I had recently. I wanted to show a friend a video of the inmates of a correctional facility in the Philippines dancing to Soulja Boy. And what do I see?

“This video was muted and deleted after getting 7M+ due to copyright issues with WMG. It can’t be put up unless i swap the audio. Sorry guys … i’ll add a link to another site later to view the original video and audio” See the edited version here:

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This made me absolutely furious. (And it is not because I am a big Soulja Boy fan).
Let me break down for you why this is both outrageous, stupid and disrespectful!

• First of all it is outrageous because Soulja Boy started on youtube. He was an online phenomenon before Warner Music ever heard of him.
  Check out video of how Soulja Boy started here (it is excerpt from a presentation presented at the Library of Congress by Michael Wesch – the entire presentation can be seen here)
• Secondly it is stupid not using the channel that already loves your artist. 7 million people watched these inmates dancing to the song without any marketingdollars being spent. Furthermore (as the original poster of the youtube clip also write) the clip won’t go away because you get it removed from youtube, it just moves somewhere else. But you just pissed off the community that created your artist for you.
• Thirdly is it disrespectful towards the online communtiy. He had a huge fanbase and hype that was in part created by this very video of the inmates dancing – before they even signed him! So in reality WMG got all the hype, fans and viral marketing they could ever dream of for free. Created by people on youtube. And then after you sign him, you go back to that community and say “hey, you can’t use that music – we own that!”.

Record labels! You need to wake up very soon. Before the artists realise that they dont need you either.

Once again the powerful people of the entertainment industry have shown their complete lack of understanding their customers, their market and the problems they are facing.

It never seize to amaze me to what lengths these people will go to defend and obsolete business model. Music and film distribution on a disk is so – well – last century.

Making it illegal to use a region free dvd player and uploading content to YouTube is just another bound-to-fail attempt of maintaining the disk (cd and dvd) as the only way of buying, watching and keeping music and video.

Again, as I have mentioned in an earlier post, the reason why people like their music and films on their computer, iPod or phone is not because they want to break the law, avoid paying for it or going around regional coding. It is because it is easier, more convenient and a better solution for most peoples needs.

Outlawing your entire customer base seems like a bad idea.

He also see the solution to stopping “piracy” as providing a better product rather than suing people, companies and everything else in sight. As he puts it:

What Sumner is missing with his comments is the fact that pirates can be beaten—it happens all the time—but not primarily by means of legal threats and lawsuits.

Read his article here

So what should they do?
In short: They should begin rewarding those that DO buy the music instead of focusing on punishing those that DON’T buy the music.

Allow me to offer a couple of examples that I am convinced will help.

Forget about DRM and copy protection.
First off – these things do not work anyways. By now it should be evident that all forms of copy protection fails.

Secondly it does restrict the usage of the music for the users that actually went and bought it. So you in essence end up punishing the ones that bought your product. And that is a bad strategy.

I have personally experienced purchasing an album legally, and ending up having to download an illegal copy of it in order to listen to it – because DRM restrictions made it impossible to listen to my legal version. That is a bad user experience and do not offer me a reason to buy an album. On the contrary. When getting an album is better, more convenient and offers me more options if I get it illegally, why should i go through all the hassle just to be allowed to pay for it?

Forget old ways of distribution and embrace the new ones
Since Napster made the sharing of music files a common thing to do, the recording industry have been trying to stop file sharing. But after ten years of hunting pirates, coming up with copy protection and new laws and restrictions on use of creative work, file sharing have never been bigger than now.

It is no longer just music files that are being shared. People will now without hesitation download DVD-rips and games weighing in at four, five – even 7 gigabytes. Unthinkable in 1998 but here we are. Almost everything is available.

And this is in my belief the number one reason why the recording industry (and film industry as well) have failed. They do not understand what is going on. I am convinced that file sharing is so popular because it is convenient. It is available. It is easy.
Yes I know that many people will argue that it is because it is free and you can steal movies without paying. I will admit that “free” always make a good selling point, but I honestly do not think that is the main reason why people download.
A fact supporting this is, that even if music is given away like Radiohead did, the amount of downloads through torrents was the same as for an ordinary album. Meaning that convenience and not price is what decide where to get stuff.

When you want a song and you look at the options:

1. Go to a record store and get a piece of plastic (a cd) that you only use once when you import it into your playlist.
2. Go to an online music store and buy a file that is DRM protected so you can’t use it where you want to.
3. Download it online in 5 minutes and have a file that works on all platforms and in all music players.

Then I don’t find it particularly odd that people often choose the latter.

And this is the problem down to the bone. The people selling music still see all online music as a flawed, bad for business competition to their cd sales. But a cd is not the holy grail. A cd is merely a media for transporting music. Just like a cassette tape is. And just like we moved on from cassette tapes we have now moved on to the next media for distribution of music. The internet.

Carrot instead of whip
Of course people making music should be paid for their work. No discussion.

So instead of trying to get people to buy CD’s that they don’t want, the industry should start looking at ways of making it worth you money to actually buy songs online.

Rewarding people that buy your product is a much better strategy than trying to punish all those that don’t buy it.

Imagine if you bought an album on iTunes for example. Pay 8$ for it and get the whole album with no DRM or restrictions. But what you also get is access to an area where you (because you bought the album and therefore we like you and want to pamper you) can get extra stuff related to the album you paid for.

There is virtually no limit to what could be put in that area but just to give a few examples:

Added value stuff:

• View all music videos from that album (or artist).
• Some behind the scenes footage from a concert.
• An exclusive interview with the artist that only people that bought the album can see.
• Artist related shows (like MTV cribs, the making of the video, the life/career of the artist)
• Membership of the fan club and access to fan gear (at a reduced price perhaps)
• Discount on earlier albums from this artist.

VIP type stuff:

• Access to artist blog, vlog or diary
• Buy tickets to artist concerts before they are on sale to the public
• See new music videos before everyone else
• Purchase the next album from this artist before it is released to the public
• Get free remixes, instrumentals and other special versions of songs from the album.

Community type stuff:

• Chat or forum where you can talk with other people that also bought the album
• Access to artist related competitions (who knows the most about this artist)
• Get ringtones, wallpapers, screensavers, buddy icons

As i said before the possibilites are endless, but if I got access to just half of the items listed above, then I would feel that the 8$ i spent on an album was really a good investment. I would return on a regular basis to check new developments on “my” artists, and I wouldn’t want to give my password to people on a torrent, so everyone interested in these services would buy the album.

That is a thing that DRM will never accomplish