FIND IT'S OWN LEVEL
Three things I read today and yesterday got me thinking about the changing relationship between Attention and Content.
First was a New York Times article on the on-going tussle between Google and Book Publishers titled "Googling Literature: The Debate Goes Public", over whether Google has the right to scan books for easy search and retrieval of snippets via it's Google Print project.
The article starts with a bang:
"If there was any point of agreement between publishers, authors and Google in a debate Thursday night over the giant Web company's program to digitize the collections of major libraries and allow users to search them online, it seemed to be this: Information does not necessarily want to be free.
Rather, the parties agreed, information wants to be found.
But when it comes to how information will be found and who will share in the profits, the various sides remain far apart - not surprising, perhaps, since the issue has already landed in federal court."
The second was a good follow-up by IP Democracy, on the question of sharing the profits titled "Why not Adsense for Book Publishers", which concludes with:
"So, maybe to help get copyright owners onboard, Google will ultimately need to sweeten the pot by offering them a piece of its “Internet economy” search-ad revenues to help them deal financially and psychologically with the digital disruption facing their traditional business models and the potential risks it raises for their future revenue streams."
It brought to mind this piece in Bubblegeneration a couple of weeks ago that looked at this issue from an economist's perspective.
And the third was a great post by Joel Spolsky yesterday, titled "Price as Signals" on how the music industry wants to use variable pricing as a method to maintain control of their artists and marketing lock with consumers.
This is in the context of the upcoming renewal talks most of the music industry will be having next year with Apple for its iTunes online music store. The music publishers are signaling their intent to raise prices on the hits months ahead as a negotiating tactic (see my earlier post here).
It's a behind-the-scenes tussle as intense as between Google and the book industry.
In the first part of the post, Joel describes how and why the movie industry likes keeping prices high and uniform at a certain level, whether the movie is a blockbuster or a clunker:
"The answer is that pricing sends a signal. People have come to believe that “you get what you pay for.” If you lowered the price of a movie, people would immediately infer from the low price that it's a crappy movie and they wouldn't go see it.
If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway. The entertainment industry has to maintain a straight face and tell you that Gigli or Battlefield Earth are every bit as valuable as Wedding Crashers or Star Wars or nobody will go see them."
He follows up with how the music industry thinks about pricing from their perspective:
"Here's the dream world for the EMI Group, Sony/BMG, etc.: there are two prices for songs on iTunes, say, $2.49 and $0.99. All the new releases come out at $2.49. Some classic rock (Sweet Home Alabama) is at $2.49. Unwanted, old, crap, like, say, Brandy (You're A Fine Girl) -- the crap we only know because it was pushed on us in the 70s by paid-off disk jockeys -- would be deliberately priced at $0.99 to send a clear message that $0.99 = crap.
And now when a musician gets uppity, all the recording industry has to do is threaten to release their next single straight into the $0.99 category, which will kill it dead no matter how good it is. And suddenly the music industry has a lot more leverage over their artists in negotiations: the kind of leverage they are used to having. Their favorite kind of leverage. The “we won't promote your music if you don't let us put rootkits on your CDs* ” kind of leverage."
Joel's examples deal with movies and videos, but the issue of price signals also apply to the book industry, where hardcovers and paperbacks are calcified into certain price points and never shall they vary.
The current tug of war between Google and the book industry also involves this control issue.
The following struck me after reading the NYTimes article and Joel's post:
Despite having all the resources of the Internet, from Web 1.0 to 2.0 and beyond, and after over a decade of Internet commercialization, there really is no ONLINE mechanism where consumers can send pricing signals of their own back to publishers on individual pieces of content, be it music, movies, books or otherwise.
There's no eBay like marketplace where content can find it's own value as stocks do in the stock markets.
Sure, there are auctions on used books, music and videos and that tells you something, but it's not a front and central price signaling marketplace. And there are always the consumer reviews and rankings at Amazon that give you some sense of what a piece of content might be worth.
And now of course, we have tags, be they from Del.icio.us and others, that allow folks to publicly display their favorite and not-so-favorite lists of content for all to see.
But there's no online site that gives you a sense of what a piece of content is worth from a consumer point of view..
But there will be.
They may incorporate deeper implementations of Web 2.0 technologies like tags and RSS streams and the like, but at some point a marketplace will develop.
That would be the "Dream" scenario from a consumer perspective to counter the "dreams" of the music and content industries that Joel cites.
After all, Content ultimately seeks Attention, and Attention ultimately prices Content.
Bill Gross (via Goto/Overture) and Google of late have already shown us what happens to the previously "Upside down" world of Advertising and Direct Marketing, when Attention starts to be driven by market forces.
And yesterday, Attention took another step forward towards consumer-driven market forces.
Like Fred Wilson, I was encouraged when I saw entrepreneur Seth Goldstein announce his new company ROOT Markets on his blog bringing the financial genius of Lew Ranieri to bear on the challenge of creating a "Securitization" market for attention. The opportunity is to create a marketplace to re-allocate risks and "open up the Attention market" for consumers. As Fred puts it so well,
"It's a big idea with plenty of execution risks in front of them, but it's fascinating to watch these two guys bring the lessons of wall street in the late 70s to the online ad market in 2005."
So Attention is chugging down the road towards more friction-free marketplaces.
And that again leaves us with Content, which for the moment is being held back at the dam by the herculean " little Dutch Boy" efforts of the media industry, legal machinations and all.
Remember, contrary to the pronouncements of the media industry, this is NOT about "Free" and/or "Pirated" Content. This is about who gets to set the price for Content in the future.
In time, iTunes and/or someone else should be able to make variable pricing and price signaling work from a consumer point of view rather than the industry again commandeering this marketplace tool for their own purposes. Maybe it's via Google Base, or Yahoo!, someone else entirely that we've not yet heard about.
One should keep in mind what Umair at Bubblegeneration said a while ago about the value of "Attention":
"Because attention becomes scarce at the margin. Attention used to be like water for the media industry - cheap, plentiful, and available pretty much ubiquitously. Now, it's like oil - expensive, scarce, and subject to more and more severe shocks."
At some point we'll be able to paraphrase the above into the following realized "Dream" for Content:
"Because Content becomes ubiquitous at the margin. Content used to be like Oil for the media industry - expensive, scarce and subject to more and more shocks, available pretty much only at the places of their choice.
Now, it's like water - cheap, plentiful, and available pretty much ubiquitously, wherever, whenever and whatever the consumer desires."
How long do you think before we get to this reality, when Content, like Attention before it, finds it's own water level? A King, finally serving at the pleasure of it's subjects.
FOOTNOTES:
* The "rootkit" reference is of course to the recent debacle for Sony when it incorporated the practices of the spyware industry to "protect" their content on music CDs.
The company was forced to recall them after a week and a half of mainstream backlash, sparked by Mark Russinovitch, a blogger and a geek, became too much to bear.
Wired has a great rundown on that whole remarkable story here if you missed it.
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