I’ve been searching for a way to explain to my friends how and why the internet is disrupting so many business models. After listening to MacBreak Weekly this week(Episode 85), I have my answer: It’s like the Cotton Gin of Content.
The Cotton Gin changed the cotton industry in America forever. It allowed cotton producers to use much less manpower to produce the same amount of cotton. The end result was a huge increase in the amount of cotton produced and in the revenue stream generated by that cotton. It increased efficiency and lowered costs.
The Internet does the same thing, but it does it for content. The old business models surrounding content are dying. The primary example is the music industry, which can’t entirely keep up with the switchover to digital music. They can no longer control the content they produce. Even digital rights managements doesn’t allow them to maintain control. From the point of view of the Music Industry, the internet is a disruptive technology. This isn’t true, however. The Internet is, in actuality, a Revolutionary Innovation. It has changed the landscape of content entirely. People are no longer forced to use content in the ways that they were intended to be used.
The Content producing industries (like the Music Industry, the Publishing Industry, and the Movie Industry) are operating under a model where they control the content they produce. This will no longer work in a world where I can make an infinite number of perfect digital copies of any content I have, especially when the amount of effort I have to invest in making those copies is almost Nil. All of the content industries have had to deal with illegal copying, whether it was mix tapes or copying VHS tapes. But for the first time, I can make a copy that is exactly the same quality as the original and invest little to no energy in the process.
In order to survive the coming decade, the content producing industries need to change their business models. Some of them are starting to experiment with online distribution. Hulu.com is an excellent example of how the industry can embrace the new world. Unfortunately, NBC and their partners on Hulu are still holding on to the old idea of limiting access to that content. I’m convinced that people will be unwilling to watch most of their programming on a computer screen. If Hulu provided a way to move that data to existing set top boxes like TiVo or the Apple TV, they’d go a long way to providing a true alternative to Television.
I often hear “They just don’t get it” in regards to the major content industries. I disagree. I think they entirely get it, and it terrifies them. Their bottoms lines are falling away and they can’t see a way to use the Internet to bring their numbers back. I’m convinced they never will. The profit margins for content on the internet are much smaller than for traditional controlled media. The old models need to change to adapt to that, and that means losing a lot of money, especially at first. But it has to be done, or they’re in danger of losing everything. It’s better to make less money than to make no money at all.
In order to win this game, the content providers need to downsize their industry, cut costs, and give up the idea of controlling their content. Otherwise, they’re dead in the water, and none of us want that. Like the Cotton Gin, the internet provides a new way to do things. It’s change or die. Time to buck up boys.
and 
. Games like 
and 
. Those games are puzzles, thinking games. On my Wii I have a game called 
which is much more about skill then killing people because you’re rolling a freakin’ marble around a maze. Some games are actually educational like 
. Carmen Sandiego games have always forced kids to look up real world facts in order to figure out where they need to go next. 
or some other online system. Hell, get together at someone’s house and play games. Although I do say that games like Monopoly and Kill Doctor Lucky would be more fun, but that’s just me.
and found the regular price for the 
and 
out there as set top boxes for digital downloads. You also cannot discount the 
for it’s digital downloads. Again, digital downloads don’t provide the quality that you get from either a Blu-ray disc or a DVD. I can be satisfied with downloading a movie for renting if all I’m looking for is to watch the movie. But the experience is not the same as a disc. The disc can provide special features such as commentary tracks and music videos, etc. To me, having the physical media in my hand provides me with a sense of security. I don’t have to worry about my hard drive crashing and loosing my movie. I don’t have to worry about licensing deals or anything of that nature. I get the movie from the store or from Amazon or from where ever and I can see it, touch it, I know it’s there. I’m sorry, but physical media is going to stay around for a long time. Blu-ray is going to be the next generation of this technology. It’s going to take some time before it gets it’s market saturation but I can almost guarantee it will.