Better than free

In this post on his blog, Kevin Kelly dis­cusses how the Inter­net is a mas­sive copy­ing machine. This is a major rea­son that dig­i­tal rights man­age­ment (DRM) does not pro­tect busi­ness mod­els very well.

The music and movie indus­tries have focused on pro­tect­ing con­tent and man­ag­ing copy­ing, instead of build­ing and offer­ing value that is dif­fi­cult or hard to copy. U2’s man­ager recently attacked ISPs, search engines and other com­pa­nies for aid­ing and abet­ting music and video file shar­ing on the Inter­net. (CBC).

Kelly, on the other hand, pro­poses a net­work econ­omy where shar­ing and abun­dance are key suc­cess fac­tors that every con­tent pub­lisher must sat­isfy. He also iden­ti­fies 8 key suc­cess fac­tors that spur cus­tomers to buy instead of copy.

It’s dif­fi­cult to copy rep­u­ta­tion and trust, but it’s rather easy to offer or mea­sure these attrib­utes. Just look at eBay.

Rep­u­ta­tion and trust are rel­e­vant in edu­ca­tion. Jason Schultz pub­lished links to sev­eral YouTube videos of stu­dents demon­strat­ing how to cheat in school. BoingBoing’s Cory Doc­torow dis­cussed his own expe­ri­ences with cheat­ing when he linked to Schultz’s post.

Schools offer inter­pre­ta­tion, which is another form of value that is dif­fi­cult to copy. Grad­ing, eval­u­a­tion, advis­ing are good exam­ples of con­tent that is very dif­fi­cult to copy. These also have ele­ments of per­son­al­iza­tion, which help increase their value.

Patron­age is another fac­tor. Some users want to pay for con­tent, even if it can be down­loaded free of charge.  Phys­i­cal forms that can­not be down­loaded through the Inter­net can also make con­tent more valu­able – cover art and book­lets are exam­ples in the music industry.

Con­ve­nience is also an impor­tant value gen­er­a­tor. Imme­di­ate access to con­tent may be more impor­tant to some users than even­tu­ally find­ing free access through peer-to-peer net­works or file shar­ing. Meta­data, XML and web ser­vices are some of the tools that small and inde­pen­dent pub­lish­ers use to sell their content.

Blogs are also part of the value sys­tem that is cre­ated as mul­ti­ple value chains link together from end to end. Boing­Bo­ing is a good exam­ple – that blog has sev­eral edi­tors who pro­mote their solo media projects through the web site. I dis­cov­ered Kelly’s arti­cle on a Boing­Bo­ing post, as a mat­ter of fact.

Tagged as: business_model, copyright, data, DRM, eBay, Internet, key-success-factors, ksf, MP3, music, reputation, trust, value-chain, XML