Ross Pruden’s Favorites Of The Week: Hand Me The Keys (Or I’ll Take Them)

from the favorites-of-the-week dept

This week, Techdirt had a good crop of articles about enablers and gatekeepers. First up is the amazing story of 72-year-old music legend Lester Chambers and how his newest chapter is currently being written on Kickstarter. As you may recall, Lester Chambers got screwed by the music industry:

Now 72, Lester is being given a second chance by a new (the original?) group of enablers — his fans. Chambers’ music was popular before I was even born, but Alexis Ohanian has thrown down the gauntlet to prove this kind of thing is possible. After hearing Lester’s story, I was moved to pony up $35. Honestly, I don’t even know Chambers’ music, but that’s not really the point; this is mainly about showing all artists (and skeptics) once more that we, the people, are the enablers and that the old gatekeepers don’t hold all the keys anymore.

So we skip now from the once somewhat famous to the now insanely famous, Psy, who has made over $8 million despite (or perhaps because of?) copyright infringement. As Gangnam Style has swept the world, I’ve been wondering if anyone would focus on how much of its success was attributed to its intentionally lax copyright licensing. Psy has happily let others copy his work without explicit permission… which means lots of “copycat” videos have appeared. Granted, some of these videos would be considered fair use because they’re parodies, but I’m sure Psy is all too happy to see these videos carry his Gangnam meme as far as possible for as long as possible.

And why would Psy want others to appropriate his meme if it means rife copyright infringement? Because he knows that when his fans copy him, it just adds enormous value to everything else he does. As Glyn summarizes it:

This is yet another great example of how artists can give away copies of their music and videos to build their reputations and then earn significant sums by selling associated scarcities — in this case, appearances in TV commercials. Now, not every musician may want to take that route, but there are plenty of other ways of exploiting global successes like Gangnam Style — none of which requires copyright to be enforced.

While we’re talking about musicians, we shouldn’t forget the short article about Mike Doughty offering unique, personalized songs for a few C notes. Doughty’s approach really exemplifies the powers of the CwF + RtB approach; what he’s offering is impossible to pirate because he’s selling something only he can create, and he only gets paid for work completed. Who, you ask, would bother paying $543 for a personalized song? If you’re a “True Fan” of Doughty’s work, $543 starts to sound like a real bargain.

I loved the post about Techdirt’s eBook results, People Will Pay To Support Creators, Even When Free Is An Option. Its infographic really proves how fans will still pay even when they don’t have to, which is a middle finger to anyone who thinks “giving it away” is insane nonsense. As we all know, offering up digital content has zero operating costs, so it costs nothing to let others have it for free. However, if you frame it just the right way and market it to the right people, fans will gladly buy it. I know this is true from personal experience: when the Approaching Infinity eBook was offered for “$0+”, what struck me was how the default option was pre-set at $5. If I really wanted to pay nothing for it, I could have purposefully selected $0… but that’d make me feel somewhat petty. Which I think was the point. Is it a coincidence that $5 is the most commonly paid price? I think not.

As a side note, the Approaching Infinity eBook is available for free on the Techdirt web site as a series of posts, but I own a copy of the book because I prefer to read it in that format. When I heard the eBook was available for free, I actually went to the site to download it for free… (N.B. technically, this wouldn’t be considered a lost sale since I’d already paid for the book once) but then bought it anyway as a small way of saying thank you to Techdirt!

One of my favorite pieces this week was Belgian Newspapers Agree To Drop Lawsuit Over Google News After Google Promises To Show Them How To Make Money Online. I have to confess to having a vicious streak when it comes to seeing European newspapers disrupted. Really, no pity is in my heart for outdated newspapers refusing to acknowledge legitimate new revenue sources in the changing market, so I have to suppress mischievous glee when I read how “Belgian newspapers sued Google for sending them traffic…” and then “Google removed those newspapers from its index, leading the newspapers to freak out and demand to be put back in.” Notwithstanding this article’s hilarious headline, maybe Google should update its business model to offer continuing ed courses to teach legacy businesses how to make money in the new age.

Another favorite was the article about the nature of disruptive innovation. It’s a fave because of its incredibly useful chart showing how many products and services have been rendered obsolete by smartphones:

What struck me is the 8mm camera being replaced by a smartphone’s camera. I was reminded of this when a filmmaker friend neglected to dig out his swanky $2000 Canon 7D for his daughter’s birthday party because his smartphone shooting 1080p was “good enough”, a refrain we often hear about new products or services competing with legacy value propositions.

But making an 8mm camera obsolete only scratches the surface: there’s a fantastic 8mm iPhone app with lots of cool filters akin to Instagram that simulate many different kinds of lenses and types of film. You can also edit all that footage on your phone (no need for an expensive flatbed editing bay). There’s a hell of a lot you can do with smartphone video now, and every month some new cool features emerge that make it even easier to shoot killer home videos.

My father once told me, “All doctors are basically working themselves out of a job.” In that simple statement, he was stating the paradox of intrinsic obsolescence. You provide a product or a service to meet a need, but provide too much of it, then you meet the need so much that you’re out of a job (e.g., Instapaper, which has hit a plateau in its customer base). If doctors did cure all diseases, there’d be no need for doctors anymore. So their stated goal — eliminate all disease — is in fact not in their own best interests. Obviously, this isn’t ever a pressing issue because the rate at which doctors eliminate diseases is slow enough not to matter to them.

The rest of the world should be so lucky. Many businesses today are being rendered obsolete so swiftly that they barely have time to adapt. While it’s very sad for those businesses which employed hundreds or thousands, the end result is indisputably better for the rest of the world:

Disruptive innovation, by its nature, destroys entire industries or segments of industries by making them obsolete. If you simply measure the economic impact on the fact that those industries are no longer present, or that those products are no longer being sold for hundreds of dollars, you could argue that there’s a negative impact on the economy. But, if you flip it around and look at (a) how much better our lives are, in that we have access to all that at the touch of our finger tips in a single smartphone, and (b) that as compared to buying all those other devices, individuals actually get to keep more money to themselves (though, not necessarily in their now obsolete wallets) to be spent in more productive ways, it seems like it’s actually a really good thing.

Put another way, don’t be sad for the people put out of a job making and selling telephones, cameras, thermometers, dictionaries, alarm clocks, et al. — be happy all those gadgets are now on one device that fits in your pocket because all those people are out of work. Yes, they’re out of work, that’s terrible, etc. but they’re out of a job because they were making products nobody wanted anymore. Do we really want people still producing expensive and unnecessary crap? Nobody rushes to bail out those put out of work compiling the Encyclopedia Britannica, right?

And finally, a great post about The Old Enablers Becoming New Gatekeepers. Mike’s distinction between the enabler and gatekeeper is a vital one: all middlemen are enablers, and creators will always need enablers. However, most of the enablers we’ve ever known have been gatekeepers because the costs to create and distribute content have historically been so large that individual creators couldn’t afford to do a middleman’s job on their own and the middleman had to prioritize creators according to which creators were better financial investments. For the ones that got left behind, those middlemen weren’t enablers, but gatekeepers. Yet, with the rise of the internet, the costs of creation and distribution have dropped to zero which has also nerfed the power of the old gatekeepers along with it. So now we see these zero-cost enablers like Twitter and Instagram and Facebook and Kickstarter and Etsy helping empower users by promoting their brand and distributing their wares.

The new trend we see is that these enablers are starting to lock down their offerings in an attempt to make more money in the short term:

It seems like some of the big “clashes” we’ve been seeing in the tech/web world lately are along those lines. Lots of people have talked about Instagram and Twitter fighting with each other, which is just the latest in a series of “fights” among hot web companies blocking each other. Considering that many of these companies grew up on a web 2.0 ethos of openness and sharing — and we’re now watching them get more locked down, proprietary and limiting — it seems obvious that some of these companies are moving along the spectrum from enabler to gatekeeper.

Here’s the insight that really made this whole article worthwhile:

We shouldn’t necessarily fear the new gatekeepers, mainly because a gatekeeper business model, while lucrative in the short-term, is unsustainable in the long term. Companies, which move along that chain chasing the easy money, need to learn that they do so at their own peril. Becoming a gatekeeper merely opens up massive opportunity for a new enabler to disrupt you. That’s a lesson that too many companies learn way too late.

So it goes. Gatekeepers lock down the industry. Enablers show up, destroy the industry, and refashion it. Then, over time, the old enablers become the new gatekeepers… until newer enablers show up and the cycle begins anew. One would expect this kind of deep “ethos overhaul” to only happen in older companies like Kodak or Coke where a newer generation of management is unfettered by the previous generation’s conceptions of how the company should be run, but it seems even relatively young companies like Twitter and Instagram aren’t immune to shifting their focus toward short term profits at the expense of long-term pain.

The only long-term sustainable solution is to remember at all times that the value your company provides isn’t in weeding out creators whose work isn’t worthy of making you money, but in helping all creators make their dreams come true. Get too snobby and someone else will be only too happy to take your customers. Maybe all of them.