Stop the war
Hollywood and Silicon Valley need to stop digging deeper trenches and figure out where they have mutual interests
IT’S THE NEW Hatfields and McCoys — the entrenched monopolists vs. the disruptive technologists. Up in the Hollywood Hills sit the content owners, the music and movie studios. It’s instructive that we used to call them the record and film companies. Today my 8-year-old, Naomi, wants to know what a record is (it’s what DJs use to scratch on hip-hop CDs, I tell her), and wants me to take her to the latest Star Wars “film” at the Metreon, where it is actually projected in digital video.
Down in Silicon Valley sit the computer companies, their moniker also giving way to the emerging peer world of pervasive devices. Joining the PC parade are cell phones, PDAs, MP3 players, and TV-in-a-box PVRs (personal video recorders). The Replay 4000 PVR is at the tipping point of the struggle, blending time-shifting and commercial-skipping with peer-to-peer network transport.
Hollywood on the Potomac and the courts appear to be lined up on the content owners’ side — as much the function of a well-oiled lobbying effort as anything. Motion Picture Association (MPA) Chairman and CEO Jack Valenti and his Recording Industry Association of America (RIAA) counterpart, Hillary Rosen, have made this a discussion about theft of intellectual property, and have effectively extended copyrights of once-public-domain properties such as Disney’s Grimm’s Fairy Tales into virtual perpetuity.
The Valley makes the argument that the Hills were similarly hostile to the analog VCR, only to eventually derive the bulk of revenues from the new device. Both camps point to Napster’s erosion of the music audience: Hollywood sees piracy as the cause, while Silicon Valley sees new fans shut off from an intuitive distribution model they’ve grown up with.
Hollywood has figured out how to cut down on piracy by making mind-numbingly stupid movies that aren’t worth copying let alone paying to see. But they get their investment back anyway by playing that material off on cable and eventually broadcasting where the price is bundled as part of the real service — a conduit for sports and news.
The music companies have a much harder problem. Where movies are a single-play product for all but the most rabid, music is the gift that keeps on giving. First, it was radio that seeded the audience, with 78s giving way to 45s as the prime distribution mechanism. The Beatles disrupted that business model by writing and producing their own material, turning the LP (stands for long-playing, Naomi) into a must-listen from beginning to end.
Album-oriented radio arrived along with audio cassettes, putting pressure on the record companies to ban the playing of complete records over the unprotected airwaves, and to retard the emergence of digital audio technology through just the sorts of digital rights management techniques now making their way through Washington.
Silicon Valley came to terms with piracy long ago when Bill Gates discovered it was the best way to hook a generation on Word, Excel, and finally, the Office suite. The Office competitive upgrade policy ratified the deal, essentially converting pirates into subscribers by giving the suite away for as little as $150 or for free, bundled with a new machine.
Since then, the browser, media player, videoconferencing, and e-mail clients have upheld the flip-flopped tradition of giving away the razor to sell the razor — the operating system. And that’s why the pressure is starting to build, as Microsoft and Intel need to satisfy the hunger for rich client services in the broadband age. With .Net’s booster rocket now falling away as the Office platform reaches orbit, it’s time to deliver the rich peer protocols to a hungry, and wealthy, Boomer audience.
Yup, the Boomers are back with a vengeance — vulnerable to the one thing there’s not enough of: time. Broadband adoption may be somewhat stunted by the Bermuda Triangle of the telco/cable duopoly, but check out which disruptive technologies are getting traction. TiVo/Replay — sure, we skip the commercials, but it’s more to save time than anything else. If I see a trailer (that’s another word for a movie ad, Naomi) I’ll rewind to see whether it’s worth the popcorn or not.
MP3s are great for exercising, but I’d rather pay real money to assemble exactly the songs I want in the order I want them for that special wedding gift or high school reunion dance. And I’d gladly pay a little more for a live performance if I could use my 802.11-enabled recorder to patch in to the concert audio board for an authorized dub of the performance.
I’ve only used Napster once — to download copies of two albums I produced with members of the Firesign Theatre back in the ’70s. They’re long out of print, and I’ve long since mothballed my turntable (that’s what we used to play records, Naomi.) It’s another market waiting to be mined — the thousands of hours of unreleased material from the rock, jazz, folk, and blues archives that line the walls of dens and attics.
Steve Jobs has it right with nice, shiny machines to assemble the soundtracks of our lives. Jobs sits astride both worlds. As head of Pixar, his server farms are rendering the next generation in animated films; as head of Apple, he’s fashioning the digital tools to bring multimedia to a mass audience, blurring the distinction between consumer and creator. And against all odds — the Windows monopoly, the commoditization of the mediocre — he’s surviving and even prospering. I’ve given Apple up for dead so many times I can’t count them. Even The Beatles sued him over the name of the company. But Jobs knows something and he’s sticking with it. He settled the lawsuit, after all.
All we are saying …
