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David Pogue’s email today continued his discussion of e-books and his struggle between copy protection vs unfettetered access to creative works. The story line is very poignant for him due to the unauthorized release of some of his work. In his email he cited a well reasoned post about copy protection on Future Lab, a strategy web site, and I decided to chime in.

Here is the original post and my reply

 

Doug said:

As a Marketing and Strategy Blog it is remarkable that you have missed the entire value chain analysis pertinent to this issue.        The core value creation activity of an artist is in the interface between original art and the patron. (Not Waren Buffet, that’s a silly argument, but the average consumer) For plays, this is the theater, for movies it is the cinema, for music is is the concert. Electronic distribution of these performances has distracted artists, and created a proliferation of not very good artists, because of the profits derived from distribution extension. But anyone who has studied the strategic forces of the creative industry has seen this issue for at least a decade, if not more. Profits from creativity will gravitate back to creative origination (ie in the hands of the artist, not the distributor or the industrial overhead of distribution) And because there will be much competition for an unleashed pool of profits – which are today locked up in massively mismanaged production and distribution companies – some very creative results will be invented by artists to build their pool of profits. I’m not sure what the final result will be, no one does, but I suspect that this will lead to a shake out of poor quality artists in favor of the truly remarkable. In a more technical formulation: Quality will increase dramatically as effort concentrates around value creation from creativity, and moves away from away from attempting to gain profits from distribution. Books, however poses a greater challenge, because there is no natural venue for artist to patron interaction. (Even Samual Clemins/Mark Twain had to go on European lecture tour to rebuild the fortune he lost from a failed linotype investment. Note that he didn’t try and get more imprints out to the market) And I think it is safe to say, as per Pogue, that derivative income is not the answer. Unlike Mr. Pogue who is very witty and entertaining, most authors are, well, not Mark Twain or David Pogue. And I don’t see the T-Shirt strategy working either. At the end of the day I think that the profit nexus for an author is, as it has been since Guttenburg, author to reader. The technological trick is going to be to find a way to manage the primacy of that connection (think the fence around the concert, or the walls of the theater) and, put down the rocks you web 2.0 people, that will probably mean long term copy protection, perhaps made palatable by a very low copy price of say $2-$5 per copy. The defense I put forward for this different strategy for print vs performance is that print has not been subjected to the distribution extension that has dominated performance in the post War period. Sadly print marketing has been a failure while performance marketing has been a wild success. The ratio of millionaire musicians/actors vs authors tells that tale of that sad story. In short, authors will reap gains from distribution development, while performers already have gotten all there is to get from that part of the value chain. There are further arguments about the quality of electronic technology for performance (good) vs print (horrible) but that is for another post.

Stefan Kolle of Future Lab also wrote a very nice reply to my comment.