Sunday, January 26, 2003

Techvision wrap up

Chicago GSB's 1st annual technology conference went really well. It was a fun and educational experience, and I got to meet many interesting, smart people. Very nice :)

I was most involved with the DRM panel, and here are some of the things I learned:

1) Programming matters. Gary Curtis, for FullAudio said that their server stats showed an initial flurry of downloading when a new subscriber signed up, which then petered out after a few weeks. It turns out that having to know what content you want is a drawback of P2P networks. This certainly matches my experience filesharing -- I initially download lots of stuff, but then run out of inspiration.

2) Programming really matters. Gary also said that, although their service has over 300,000 songs, 80% of their volume comes from the 50 songs on their playlist. That's an amazing number.

Both of these points suggest to me that there is a lot of value in programming, whether it be from a web-radio DJ or a slashdot-style moderation system. Right now, I rely on my brother for music suggestions.

3) Content companies and the technology companies that support them want DRM to be "invasive and pervasive", and want to leave actual rights up to the content owners. Caroline Sheu from Adobe, and Jim Kreyenhagen from RealNetworks, both said that they take no stance on what users should or should not be allowed to do with media, they want to provide a flexible platform and let the content owners and customers work out what makes sense.

4) Content companies seriously overrate their products. Caroline asserted that content companies "won't supply their content" unless they knew it would be protected, but, as Tim O'Reilly mentioned in a recent speech, the fact is that most writers never get read, most songs never get heard, and most movies never get seen. The supply of content far outstrips the amount people can absorb, and in a competitive market this will drive the price down to 0.

I asked the panel why they thought people would pay for DRM content given there is so much non-DRM content available, and they said that sites like GarageBand.com and mp3.com, which supported unknown artists, had failed so the labels were the only source of valuable content. What they did not understand was that Napster killed GarageBand.com and mp3.com more than it hurt the labels.

If someone has to pick between downloading an mp3 of a known song from a known band, and an mp3 from some unknown band, they'll pick the known band every time. But if you start to lock the known band's music up with DRM technology, well, the unknown guy's starting to look a little better. And if there's a reliable system to help you find good free music, so much the better. The point is that for any of this alternative channel to work, free music has to start looking different from closed music -- and that means DRM.

I think that as labels make some progress towards implementing DRM technology, they'll start to see the content equivalent of open source software start to become more popular. Ultimately, they'll be relegated to a small, uninteresting corner of the content market.

BTW -- Special thanks to the moderator, Randall Picker (U Chicago Law Prof.). He did a great job leading the panel in his own inimitable style.

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