Thursday, June 25, 2009

Digitisation Is All About The Money

Some 10 years ago an 18-year-old Shawn Fanning released his Napster file-sharing program on the internet and started to destabilise the business models that had supported media over the best part of the last century - a digital revolution that continues today. Fanning turned the computer into a media and entertainment player and created ‘free’. At its peak in February 2001, more than 60 million people worldwide used Napster and in that month downloaded 2.79 billion songs.Putting the cat back in the bag was going to be hard.

Speaking at the Cannes Lions International Advertising Festival, Steve Ballmer, CEO Microsoft, warned that all media companies should not plan for revenues to bounce back to pre-recession levels, that traditional media business would continue to see their share of the advertising revenue move to digital. He stated that newspaper publishers have failed to generate new revenues from the digital opportunity and predicted that within 10 years all traditional content will be digital and online. He claimed that the old approach of simply trying to replicate a print newspaper online is doomed to fail. He failed to say where the money was.

Earlier this year, US Congress made permanent a requirement that all research funded by the National Institutes of Health be openly accessible, and others are following. Academic and scientific publishing is being challenged by online, free and searchable open access. Newspapers face meltdown as they attempt a digital transition and find that their ad revenues have left the room without them. Music is moving from the album and track to live and the musicians are taking back control. Music prices are in ‘free’ fall.

The challenge we face is not digitisation, but the business model or models to support digital media, be it books, films, music, TV, games, podcasts, whatever. We now have to also ask whether we are focusing on the right part of the value chain, or merely trying to prop up the traditional one? Yesterday, all creators, artists, authors were ‘lost’ and needed a publisher or intermediary to shape them and present them to the channel. Publishers understood the packaging and production of the media and also had the relationships to maximise its exposure to the market and its distribution through trusted channels. The consumer, creator and the reseller, all required the intermediary. However , does that translate to the digital world? Will all today’s players make it to the Brave New World, or just as with previous major changes,will some become victims of the change in business models and value?

Who do you think has a place in the future; the author, the agent, the publisher, the wholesaler/distributor, the reseller, the library, or a different player? More importantly, where’s the money and who gets it?

1 comment:

ron said...

I am a writer and feel that the future must surely lay squarely with the writer in the case of books. No one exists without the writer.