Rowan Gibson writes an interesting piece on Blogging Innovation about what he terms “the Internet commodity trap”—the rampant free distribution of content, authorized and otherwise, that is causing a great deal of disturbance in business.
Gibson first brings up the problem of e-book copying.
I remember talking to Kevin Kelly, co-founder of Wired magazine, back in 1995 about the future of the Web. He told me he viewed the Internet as a "planetary-sized copying machine" and added that "trying to stop copying on the Net is impossible."
As an example, he cites the way it only took a week from the publication of one of his books in Chinese translation to that book showing up on illicit Chinese download sites. He covers some of the ways the publishing industry is trying to deal with this copying.
“One option is to sell eBooks direct to customers, cutting out middlemen like distributors and retailers, and building a community around the books and authors.” Though Gibson does not mention Baen here, this is essentially what Baen is doing—and doing well. Another option is adding social-networking or multimedia “extras”.
Next he covers the music and newspaper industries, the former being disrupted by low-paying streaming services as well as illicit downloads, and the latter facing a loss in ad revenues as more readers move on-line. He looks at some of the ways these businesses are trying to adapt, including paywalls and micropayments.
Gibson concludes that the content industry’s only hope of survival is for businesses to figure out how to innovate and reinvent themselves in a form that can profit in this new environment. It is good to see someone recognizing that. So far, it seems as if most content providers think their only hope is in clinging to the old models for as long as possible, and getting laws passed to let them do so.