Content Providers

In 1996 Bill Gates published a hard to find paper called “Content is King,” coining a powerful phrase and concept that both endeared content providers to Microsoft (presumably its initial intention) and also, I would argue, dropped the content providers defenses (intentionally or not), opening up the IT industries' ensuing disruption of their sector.

I have enjoyed some raging debates on this topic. There are strong arguments that “infrastructure” or “consumer” is king, and not “content” My own position is that it is like saying “supply is king” when looking at the economic law of supply and demand that arose in the eighteenth century. They are different facets on a complete system that define each other by coexistence. Remove one, and the other becomes meaningless.

That said, rights law, as it has emerged under the auspices of WIPO in the recent decades, definitely gives content providers the ability to curtail distributions of content in purely legal ways, arguably a “king's choice” By comparison, the consumer is provided options - generally, a limited Hobson's choice of options - that is carefully controlled by the content rights holder and somewhere in the middle the infrastructure is purely the enabler. At least this is the case for “legal” content distribution.

What happened, as the Internet opened up, was that it became easy to provide consumers with access to pirate content. Piracy had traditionally been tied to costly manufacturing of fixations. Be they illegal paper-printed bibles, or cassettes, or DVDs, the pirate had to take some significant capital risk in preparing stock to then sell to market. To some extent this limited piracy in the pre-digital age.

That all changed when digital piracy made it possible to easily and freely redistribute perfect copies of content, in direct reaction to the individual consumer's demand for that material.

At first the exploding Internet and World Wide Web were perceived to be bringing about a vast demand for content into a market that the content providers had monopolized for decades (if not centuries). This anticipation of vast demand for a hitherto limited supply brought about the underpinnings of the dot-com bubble. What emerged, in reality, was that the supply of competing options to feed that demand was also unlimited. As this sunk in, the dot-com bubble burst.

Even in terms of nonpirate content production small “independent” producers (“Indies”) could reach the Internet market with the same cost as “Majors” (here we are talking about TV, music, or film, although the same will apply to most content sectors). This massive change in supply left the consumers with an almost infinite option, and so competition made it extremely difficult to maintain price.

As I discussed earlier in Chapter 2, Section 2.3.8, by the mid-2000s content providers were learning that the key to unlocking the portentous value of these vast audiences was not in trying to protect the fixations of the items of content using DRM or conditional access specifically but in offering well-curated and easy-to-use discovery. While the web itself was an amazingly versatile tool for searching for content, filtering out all the fake links, dead URLs, or simply badly indexed content from the content the user wanted was painstaking.

This content discovery has been very much a two way street: not only has it worked for consumers, but also critically, content providers themselves have “discovered their audiences” amid the vast noise of the Internet.

This change in culture has been key to the success that is now making the online content provider market the multibillion dollar industry it has become in just a little over a decade.

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