The record industry and the desert

by Jason Preston on July 14, 2008

I was talking with my dad yesterday about the music industry, and how it is trying to fight the fundamental economics of the internet (easy reproduction and distribution) rather than adapt to it.

Here’s another way of looking at it. If you live in a desert and sell water, you’re going to do a pretty good business. People need water, and they can’t get it anywhere else (except one or two other water salespeople), so you’re set.

Then one day a lake magically appears and a river flows through town, and the water is pure, drinkable, and plentiful. Suddenly you don’t have much of a business anymore. Who’s going to pay you for water when they can get plenty from the river or the lake?

The record industry is trying to poison or destroy the other sources of water, despite the fact those sources are clearly good for society, because they make the record industry’s service irrelevant.

I’m worried that newspapers are going to fall into the same trap. When a tectonic shift in technology and culture comes along—something like the internet—it’s going to destroy a lot of business models by making things that used to be hard into things that are relatively easy.

And the solution is not to try to fight the realities of the internet. No business will be able to simply “make the internet not apply” to their product (this is what things like DRM are trying to do). The solution is to look for new business models, ones that don’t rely on the “scarcity,” if you’ll forgive the economic term, of things that are now in everyone’s hands.

This is an opportunity for newspapers. It’s time to re-invest, spend more than you make, explore new possibilities, increase your staff—any newspaper with fewer than 6 or 7 developers/web tech people is shooting themselves in the foot—and reinvent what it means to be a newspaper.