Thursday, November 23, 2006

Sharing the Digital Pie

I read an interesting article in today that a friend had forwarded me. It relates to the low royalty payment that its author feels is indicative of the market’s approach to sharing reward in the digital world. They describe the cost chain and waste that exists in the physical world and ask the question why the obvious cost reductions in the digital world are not being shared with the originator, the creator, the person without whom the chain would not exist.
It raises several interesting points. It acknowledges that some of the original costs remain, while others transform or even disappear. It concludes that although the general cost of doing business, at least when it comes to electronic media, is decreasing the royalties being paid to authors remain the same or similar. It recognizes that e-books do not comprise a sufficient share of the market to be factored into overhead distribution but agues for a significant increase in digital royalty.
The market is now starting to take those bold steps in the Brave New World and there are a number of issues to be addressed such, pricing, formats, availability of digital content, channel etc. However the issue of rights contracts and digital royalties is one where common sense should prevail. Just as publishers need to recognise that the existing channel will still generate the majority of sales and must be supported and enabled into the digital chain there is a need to also recognise that authors need to equitably share the efficiency gains that are achieved through digitisation.

People only exist in the value chain if they are perceived to add value and in a world where long tail economics is reality and self publishing is becoming easier, we need to recognise some of the lessons that can learnt from the music sector and its relationships with its artists. Also artists need to be realistic and recognise the value publishers and retailers will continue to deliver in the digital world.

If artists hold back on digital rights and publishers don’t equitably share the potential increased margin they potentially hold back the creation of the market which after all can’t be built in a vacuum.

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