January 05, 2004

Napsterization of Rubber Compared to the Napsterization of Knowledge and IP

From TechCentralStation: Is Los Angeles the Next Manaus? by John Pinkerton.

Manus, Brazil was where the first big rubber-rush took place, where huge wealth was generated, until Henry Wickham, a British plantation owner figured out how to grow rubber in Ceylon and Malaya, which were under British rule in the 1870's. In the meantime, a grand opera house was built in Manus at the time when the rubber boom there was ending. Is the entertainment industry, and the newly built Disney Concert Hall in LA similar?

I don't think the comparison is quite so similar. Rubber is a physical product and when a physical commodity is used up, it is gone. Information products, which knowledge and digital entertainment are, have different properties. When an information product is distributed, it is not gone. It can be copied and distributed again, remixed, reused, repackaged. It grows in value the more people use it or experience it. It can be attached to a physical media product, or not, and that product can change over time, and is often inconsequential to the digital media itself. He does give the example of the potential napsterization of pharmaceuticals which is much more aptly compared to the rubber industry disruption, because people cannot consume medical treatment over the internet, but rather in person, and when a pill is used, it's gone.

But there is something Pinkerton doesn't address regarding the napsterization of intellectual properties: that these may become a loss leader, because of the properties of digital media, and instead real, live, in person entertainment may gain cachet to become that which people then pay money for enjoying. In other words, I download all the mixes from my favorite musician for free, but I pay $150 to see the concert. And maybe I go twice because of the richness of the live experience. Or, I am given the free download of the movie, but I go to the movieplex to see it play "live" on the big screen with all the other people there, and maybe have some other sort of live experience bundling movies or other entertainment. If creators realize the potential for giving away the commodified loss leader to gain business through that which cannot be commodified, then they simply may have to accept these changes, where one another aspect becomes rarer and more sought after, and the way to generate the sought after experience is via the loss-leader give-away.

Posted by Mary Hodder at January 5, 2004 01:28 PM | TrackBack