Paul Krugman in the June 6 NYT: "...The predictions of ’90s technology gurus are coming true more slowly than enthusiasts expected — but the future they envisioned is still on the march.
In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”
For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because “enough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.”
Indeed, it turns out that the Dead were business pioneers. Rolling Stone recently published an article titled “Rock’s New Economy: Making Money When CDs Don’t Sell.” Downloads are steadily undermining record sales — but today’s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through “publishing, touring, merchandising and licensing.”
What other creative activities will become mainly ways to promote side businesses? How about writing books?
According to a report in The Times, the buzz at this year’s BookExpo America was all about electronic books. Now, e-books have been the coming, but somehow not yet arrived, thing for a very long time. (There’s an old Brazilian joke: “Brazil is the country of the future — and always will be.” E-books have been like that.) But we may finally have reached the point at which e-books are about to become a widely used alternative to paper and ink.
That’s certainly my impression after a couple of months’ experience with the device feeding the buzz, the Amazon Kindle. Basically, the Kindle’s lightness and reflective display mean that it offers a reading experience almost comparable to that of reading a traditional book. This leaves the user free to appreciate the convenience factor: the Kindle can store the text of many books, and when you order a new book, it’s literally in your hands within a couple of minutes.
It’s a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books.
How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won’t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.
Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me...
Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we’ll have to find business and economic models that take this reality into account.
It won’t all happen immediately. But in the long run, we are all the Grateful Dead."
I got my Mom a Kindle for Mother's Day, and due to miscommunication with my Dad (he bought her one as well) he ended up with one, too. As a nerd early adopter I'm used to being won over by new technology, but my parents are usually a little slower to bite. However, in this case, they've raved about their Kindles since the first day they arrived. Maybe Krugman's right, we are at another inflection point.
Stanford Center for Internet and Society
In the heart of the Silicon Valley, legal doctrine is emerging that will determine the course of civil rights and technological innovation for decades to come. The Center for Internet and Society (CIS), housed at Stanford Law School and a part of the Law, Science and Technology Program, is at the apex of this evolving area of law.
We are all the Grateful Dead
by Colin Rule, posted on June 9, 2008 - 5:26pm
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As a once-devoted Deadhead not so long ago in high school, I would have cheered Esther Dyson's use of the Grateful Dead (GD) taper's section as a model for the spread of digitized intellectual property. But after some pondering and some reading, I now question the sustainability of the (exact) GD model. In his autobiography, "Searching for the Sound," life-long GD bassist Phil Lesh describes an indirect link between 'free' concert taping and the death of GD frontman Jerry Garcia. Without looking up the reference again, I'll describe the gist of his reasoning.
Since their adoption of the moniker, "The Grateful Dead", the polyphonic psychedelic traveling troupe chose to give their live material to concert-goers. If I remember correctly, Garcia once even mentioned that the music he plays at a live performance is no longer HIS property after he plays it. Thus, the birth of taping. But as a consequence of this attitude, the GD could not make much revenue directly from live recordings (though high-fidelity archive releases have since become the backbone of GD merchandising). And unlike most of their contemporaries, the GD rarely made significant revenue on studio recordings. Consequently, they had to support themselves by other means.
Essentially, the GD created a corporation supported not by CD sales or merchandising (until much later in their history and especially after Garcia's death), but by touring touring touring. In the 1980's they gained such a massive following they had to start playing stadiums which meant an even bigger touring staff. But their reliance on ticket sales meant they couldn't stop touring without laying off employees from Grateful Dead Productions, the parent company for all Dead-related publishing and management. Unwilling to threaten the livelihood of their 'family' of workers, the GD kept on touring as Garcia's health continued to suffer from drug addiction. According to Lesh, brief touring breaks taken in the mid-80s didn't allow enough time for Garcia to properly rehabilitate and his addiction continued until it killed him in '95.
Admittedly, the GD would have been a very different organism without taping. The vast majority of Deadheads would argue that would have been a change for the worse. Also, it would have doubtfully made a difference in the self-destructive tendencies of an American band. Additionally, economists could likely deconstruct and heavily criticize the GD model, pointing out where they could have made a buck. But that misses the point of the organic growth of the subculture and commerce surrounding the GD. And considering Rule cites paid speaking engagements as a potential alternate source of income for authors, the problems of reliance on performances and touring are not to be ignored. Without diminishing the greatness of the Grateful Dead or the immense potential of free digital intellectual property, we must be cautious about the IP models we invoke as examples of the future of free(er) IP. Truly, NOTHING comes for free and if we are to build a sustainable social institution of shared intellectual property we must be committed to high sensitivity to the externalities of developing such a structure, no matter how indirect or complex its effects may be.
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