A friend just sent over this post on how the newly elected Chairman of the Entertainment Retailers Association,  said that illegal P2P filesharing is the greatest challenge facing entertainment retailers and urged members to lobby Government for a crackdown on a problem he said “is bleeding our industry dry”.

Speaking at the association’s annual general meeting, Quirk said, “Too often the debate over illegal filesharing is portrayed as an ideological battle, but for us this is a commercial matter. Illegal filesharing is damaging our businesses, both physical and digital, on a daily basis, and the Government needs to tackle it swiftly and decisively in order to protect jobs, businesses and investment.

“First the filesharers targeted the music business and the Government did nothing. Now the filesharers have come again for TV and movies. Unless action is taken the filesharers will come for computer games, books, in fact anything which can be digitised and what will be at stake will be not just the entertainment industry but huge swathes of the UK economy. We need action now.”

Read more of this insanity here at Mi2N

Well now…

I was visiting with my Dad last weekend and thought of an interesting parallel between digital music and encyclopedias.

When I was a kid, my father had a summer job going door to door selling Comptons Encyclopedias.  He would carry a couple of these huge books under his arms and try and get the husband or wife to buy the complete Comptons collection for the kids.  This was big business and my dad made a healthy living during the summer.

Well, over the years the encyclopedia book business began to dry up.  To start it all off, Comptons put their entire encyclopedia library on a CD-ROM and sold it via a new company they formed, called Comptons New Media.  They put the CD-ROM in a chipboard box and sold it at Comp-USA,  Software Etc and other retailers for $200-$300.  It became big business for a while in the early 1990’s, and Comptons New Media flourished and was eventually purchased by the Tribune Co for a lot of dough.

It didn’t take long before some hackers cracked the CD-ROM and then pirated versions of the whole enchilada began making their way into stores and online outlets.  By now, of course, the multi-volume Comptons Encyclopedia Book business had gone the way of the dinosaur, and countless pavement pounding salespeople were no longer going door to door selling encyclopedias – and the entire book business basically went away.  Gone in a matter of a few years.  I think they still sell some to schools somewhere.

The same thing soon happened to Comptons New Media as digital competitors emerged, from Microsoft “Encarta” and others, and soon price competition and the internet gave way to this information moving online for free.

Now we have something called “Wikipedia”.

The information contained in the encyclopedias is still being researched and published and edited by now, tens of thousands of people who put it online in a living, dynamic format.  By and large, no one is getting directly paid to do this work, yet no-one can dispute the fact that society in general is benefiting from Wikipedia and other community-based information resources.  You might even notice that there is a lot more information being produced and updated and cross referenced than ever before.  This is all without the infrastructure of the past (ie Comptons) being in-place anymore, and almost no money changing hands.

Just like Comptons, the record industry digitized all of its assets and put the entire thing out there for the public to enjoy.  And just like Comptons the record industry in now suffering from price erosion, shifting formats and piracy.  They can try and hang in there and bash the problem away with legislation, or they could seriously consider other methods of delivery and renumeration, or they could sell off their remaining assets and shut down.  No matter what, the game they have played is over, caput.  Time to face the music and change.

There are no guarantees in business that things will remain the same.  Indeed, the only real constant is change and businesses that try and hold onto the past will be crushed by their own weight and failure to adapt, or in some cases, to just shut down.  Nothing is forever except change.  People should stop complaining about it and start working on creating a future that benefits us all.

Do I know exactly what that future is going to be?  Of course not.  I wish I could say with certainty but I can’t – for now.  But I think it will look a lot more like wikipedia than comptons encyclopedia sets.

We Welcome Your Comments


2 replies
  1. Toby Elwin says:

    Change or die is what all industries face. File sharing has destroyed the distribution model for many.

    I find it funny there is a music industry at all. A music INDUSTRY really only existed for 20 years: mid-50s to mid 70s and from the mid 70s the industry, was and remains, the equivalent of the walking dead. Combine payola and terrible product and outside of a few blips (Thriller or Nirvana) it has been dead.

    Digitization of music saved the music industry and now they want to contain and control it. Digitization allowed the industry to repackage and resell the same product they released on LPs, cassettes, and 8-tracks, now on CDs – how many times do we replace our music catalog until we say, “enough”!

    Since the birth of recorded music, the industry is revived each and every time by an artist or genre out of their control. This century .3% of new music accounts for >50% of annual sales, not too much artist development in that model. There is no music industry, it is a distribution industry made up of followers trying to create business model. The music only made them money when the industry acted as the gatekeepers and when they controlled distribution.

    The greatest result of this shake up is that no longer will an artist have a gatekeeper to the fan. The web has destroyed distribution costs and the artist does not need to rely on a record deal pipe dream as the only way to get studio time, packaging, marketing (radio and press), and retail distribution.

    The music industry has been on life support since lawyers and accountants started moving up the executive ranks their role is compliance, not business strategy.

    Your analogy to the encyclopedia is an accurate evolution for that product and the publishing industry is trying to understand their model, just as the movie studios are.

    Artists, go direct! Sorry Mr. Quirk, if you can’t understand your market, you should not be in business, it’s called competition.

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