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Profit in performance, not copyright

Newspapers by Susan Lesch

Newspapers, by Susan Lesch, via Wikimedia Commons

Newpapers, as we all know, are in trouble. Their margins eroded by the Internet, incapable of putting forward a business model that can support their transformation onto the web, the current economic recession has thrown the problems of print media into sharp relief, as it has with so many other industries. In any economic downturn, it’s the businesses whose core is rotten that go first, regardless of their size or cultural importance. So we have seen circulation figures drop off significantly and a number of historical titles go bust in the last year.

Clay Shirky has written extremely eloquently about this, and his summary is essential for anyone looking for a comprehensive snapshot of the present historical inflection point we’re in.

The music industry, of course, seems the obvious parallel. Its own struggle to rescue its profits in an era that simply disregards copyright law have been well-documented in the media, and its trajectory has been very similar to the print media’s. Proposed approaches have included DRM, walled garden, subscriptions and legal action against consumers who downloaded and shared music illegally. Like newspapers, nothing worked. iTunes controls an almost-monopolistic share of the market, yet the vast majority of downloads continue to be illegal, via torrents.

Musicians, however, have re-imagined their own business strategies for the most part, frequently without any support from the major labels which continue to be paralyzed by history’s inevitable facts. Any number of significant acts have said publicly that most of their revenues are now derived from three key activities, and no longer from selling their music itself:

  • Concert performances
  • Merchandise
  • Licensing of music to commercials and movies.

This parallels a general shift in society towards an experience economy where we prefer to spend our money on intense, short but memorable experiences instead of objects. Taking a broad view across the economy, there is an overall shift away from manufacturing towards services.

Musicians are simply capitalizing on these trends. Examples include David Byrne and Thom Yorke of Radiohead, who gave a very insightful interview to Wired Magazine in late 2007 where they spell out the new music industry economics of performance and licensing. The cognitive dissonance we are experiencing currently around the “music industry” is caused by the high noise level of its traditional delivery vehicle, the record labels. These are likely going to disappear in the next few years, at least in the way we know them today.

It’s harder for newspapers, of course. ‘Performing’ a newspaper makes no sense at the surface. As Shirky points out, the key contribution of newspapers to society is their journalism; their mass production financed by advertising is accidental in a way.

Danny Sullivan, publisher of Searchengineland.com, pointed out recently on Twitter that “Newspapers aren’t aged news. They’re TiVoed news. It’s a convenience we pay for. But they don’t position themselves that way.” This is interesting in that it suggests there may be a parallel to ‘performance’ for newspapers: the convenience of not having to read on a screen. Quite possibly a red herring, but it shifts and re-frames the debate ever so slightly, from the sheer terror of experiencing a revolution (see Shirky) to “here’s something we can do.” Sullivan’s (possibly inconsequential) comment doesn’t, of course, offer any suggestions as to how newspapers, with a vastly reduced print circulation – purchased by those who want the convenience of reading distilled news and analysis on paper – could afford to pay for high-quality journalists to cover global events.

But it’s notable that there’s at least one very old-style publication whose circulation has grown steadily throughout the current recession: The Economist. Its specialty? It’s a “Reader’s Digest” for serious news, in a way. The convenience of taking a dense, comprehensive, informative and small magazine with you, whether you’re taking transit to work or going on a business trip, cannot be over-estimated. The Economist is the TiVo of global politics and business journalism.

On the scale of economic transition between copyright and performance, cinema ultimately suffers the most. Given the steady, documented decline of ‘performing’ movies in cinemas – which simply fail to be a good experience, never mind how they try to make themselves attractive to consumers – it’s hard to imagine what will become of film as a medium. Which is a pity, because film is still seen as perhaps the ultimate Gesamtkunstwerk, the crowning cultural achievement of our current age (it used to be opera, before movies).

Today, it is simply infinitely more convenient to download films illegally and watch them in the comfort of one’s home, using equipment that’s either cheap and fantastic, or good enough – and our brains fill in the rest. The majority of people will not be swayed to purchase and own movies, not even by the increasingly high resolution offerings (blue-ray and HD), especially since many people only watch them once. And renting movies online, like buying music from iTunes, is simply more expensive and less convenient than downloading them from torrents. Filmmakers, I suppose, can’t exactly ‘perform’ their works in other ways.

Is it the beginning of the death of cinema? Time will tell. The good news is that the means of production – and this is similar across all media – have become so cheap that independent production and distribution is no longer a burden.

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