Summing up the current state of the Entertainment Industry

Some good dialog out there now from smart people like Clay Shirky that’s moving the ball in terms of how to think about the entertainment industry.

Of course, I like it because it’s consistent with what I’ve been saying for what feels like a loooong ass time.

Here’s the best way I can sum up what’s happened/happening, and how to move forward.

1. People are predisposed to share things.

2. People are more predisposed to share information than other things (i.e. tangible stuff), because there’s no “cost” to sharing information, and there’s often a benefit (you feel happy when you educate someone, turn them on to something, etc.).

3. Music went from a tangible item (vinyl, cassette, CDs) that, when shared, represented a loss for the sharer (“Now I don’t have that CD, because I shared it with someone else.”), to, where it is now: an informational item (mp3 that, due to Moore’s law, etc., doesn’t even represent opportunity cost because you can zap it to people in a nano-second) that represents no loss when shared, but does represent gain (i.e. “When I forward someone an mp3, I’m really sharing information with them, and it doesn’t cost me anything, but I do gain something when the person I share with enjoys it, etc.”). Same deal for movies, books…entertainment.

4. You make money when you realize that music (and other “entertainment”) is information (and is thus not scarce, and represents no loss to the sharer when shared, but does represent gain), and that people will pay for convenience (speed, filtering), access, and (sometimes) other associated non-informational (i.e. scarce) goods that relate to these informational goods.

There ya go. Have at it.

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  1. Krzysztof Wiszniewski’s avatar

    Yes, that's why Google is best suited to make a lot of money from music – getting information to people is their forte.

    It works less well for the actual musicians, because they're saddled with very real costs of getting the “information” out there in the first place – if only in terms of hours spend writing, rehearsing and recording. No reduced costs for them, I'm afraid.

    The mechanism you describe is true for copies, but we should draw a very thick line between the work and the copy. Making copies is what duplicators do. Making works is what creators do. A situation that benefits the duplicator (such as this one) need not benefit the creator.

    Which, incidentally, is exactly what we're seeing at the moment.


  2. George Howard’s avatar

    Thanks for this fantastic comment.




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