Digital Myth: The Myth of the Business Model

One size does not fit all.

D: The content industry needs to update its business models; that’s the way to fix piracy online.

S: How should those business models be updated?

D: Look at Spotify: that works great for music – free, has all music, convenient – who needs piracy?

S: And why do you think other entertainment industries don’t use that model?

D: Because they are conservative and risk-averse!

S: Really? Can you think of more reasons?

D: They make too much money from the existing systems.

S: I see. And what do they stand to make from the business model you suggest?

D: Much more; it would stop piracy!

S: And the entertainment industry suits don’t get that?

D: Yes, something like that.

S: So they’re just lazy and stupid?

D: Well, maybe more like stuck in an existing structure.

S: I see. Can you think of any other reasons?

D: Not really.

S: Then I must ask you if all content is the same.

D: What do you mean?

S: Well, you talked about music. Is it the same as movies, television, games, books, news and so on?

D: Not really, but what are you getting at?

S: The established business models are different for different types of content, don’t you agree?

D: Well, I suppose. Radio is free, books are sold in print.

S: Good point! Now, how do you watch movies?

D: What do you mean ‘watch’? I go to the cinema sometimes, or watch them on my computer.

S: I see. Do you watch videos online?

D: All the time.

S: Would you watch those videos in the cinema?

D: Ha ha, that’s just stupid.

S: They work better on a small screen?

D: Of course, they’re just a few minutes long. Even stringed together, it would be painful in a cinema.

S: I see. Do you listen to music?

D: Yes. Who doesn’t?

S: What do you listen to?

D: All kinds really. Right now Skrillex, for the most part.

S: I see. How many times have you played Where Are Ü Now?

D: Dozens! Or more. Hundreds. This month.

S: I see. What’s your favourite movie?

D: The Matrix! The more you watch it, the more it rocks!

S: Really? Would you watch it a hundred times in a month?

D: Nah, that may be a bit too much.

S: What about the online videos, would you watch the same one a hundred times?

D: Like, it’s funny the first time, then it’s fun to show it to a friend. But not a hundred times.

S: I see. By the way, what is your favourite book?

D: Why all these questions? What’s your favourite book?

S: If I had to pick one, it would be Plato’s Republic, but it’s hard to choose. Now tell me yours.

D: OK, The Alchemist by Paulo Coelho.

S: I should read that.

D: You could learn something important about life.

S: Sounds great. How many times have you read it?

D: Twice. Two-and-a-half times, actually.

S: Would you read it a hundred times in a month?

D: Come on, now you’re just being stupid.

S: True. So you agree with me that we enjoy different kinds of culture and entertainment in different ways?

D: Obviously. Did I say anything else?

S: You didn’t. How much does a song cost?

D: It’s free. With ads. An album is maybe ten euros, but you can easily pay a monthly subscription for that money and get much more.

S: Yes, but how much does a song cost to make?

D: I don’t know. Who cares? Never really thought about that.

S: Make a guess.

D: No idea. Some more than others. You need a songwriter, a band, singer, instruments, somebody to record it, a studio. Maybe a producer. Some more people to help out, get coffee and stuff. That’s probably it.

S: OK. So how much is that?

D: No idea. Maybe a thousand euros?

S: How much does a book cost?

D: Five to ten euros?

S: Yes, but to make.

D: Oh. Well the print is not too much, but you probably mean the writing.

S: Correct.

D: Well, perhaps it takes a writer one year, but maybe not full time. Four months? Perhaps the writer can get by on two thousand five hundred euros per month? OK, so let’s say ten thousand euros.

S: OK. How much does a movie cost?

D: Well I can get a DVD … Ha! You mean to make?

S: Yes.

D: Lots. There’re hundreds of people involved. There’re trailers, cameras, lights, editing, special effects, movie stars, directors and lots of people getting coffee. Big movies can be really expensive. Maybe a million euros or more.

S: I see. So different kinds of content demand different kinds of investment?

D: Of course.

S: And you said we enjoy different kinds of culture and entertainment differently?

D: Only a minute ago, yes.

S: And the traditional business models are different?

D: Anyone knows that!

S: And the delivery format shapes the content?

D: You mean online videos versus the silver screen?

S: That’s right.

P: OK, but what is your point?

S: Do you still think the same digital business model could work for all different kinds of entertainment and culture.

D: I guess not. They would have to be different and specific to the type of content at hand.

S: Good point. So what do you recommend those suits in the entertainment industry should do?

D: I don’t know.

Digital Myths is a series of posts published from the book 21 Digital Myths, Reality Distortion Antidote where Netopia editor Per Strömbäck takes a closer look at some of the concepts that have shaped the way we think, talk and make decisions about digital technology and the internet.