No one learned from the music industry, which was my worst fear about the whole debacle.
As the first industry to really feel the brunt of the shift to digital distribution, the amount of fear, floundering and failure that we all witnessed from the major labels, the aging executives, and the dying business model made a certain amount of sense. To the people who grew up digital (or the digital kids, or generation y, or ‘us’) a new approach seemed obvious, but we didn’t have the greatest tool necessary for success yet - we hadn’t seen anyone fail.
That said, we’ve seen the decline of the music industry to the point where major labels are more laughable than laudable, and no one seems to be learning. And so, for news, for film, for television and for industries like books and magazines that will be forced into competing in a world of digital distribution in the coming years, here is the short version.
5 Things You Should Have Learned From The Music Industry:
Physical packaging wasn’t your product, it was UX.
Without physical packaging, UX is the manifestation of your product. Apple is (somehow) still the only company that has figured this out when it comes to music - iTunes regularly sells albums to me, and my contemporaries, because it is less work than piracy. It costs infinitely more, the bitrate is not always as high, but buying an album from iTunes is a better experience than pirating one. It just works.
This is why so many companies lose to piracy - a pirated movie, or tv show, has a better UX than the legitimately purchased version. Which, for those of you watching at home, was the same case with CDs. When buying a CD was, cost notwithstanding, a shittier experience than downloading one, people stopped buying CDs.
You have to choose between keeping your rights, or keeping your customers.
I don’t mean this in an ‘information wants to be free’ manner, but instead as a reminder that there is always a trade-off. If you lock something up with DRM, you will lose customers. If you insist that Blu-Ray disc will only play in 65% of Blu-Ray players, you will lose customers. If you try to sell me the same content 5 times, so it will play on 5 devices, you will lose customers.
At the same time, you need to be willing to make the trade in the opposite direction - there are certain rights you should be willing to trade customers to protect, like artistic integrity in terms of the presentation of product, or the choice of venue for performance. Rights does not always mean legal matters.
You make more money from stuff your product sells, than from selling your product.
If you have to pick between selling CDs, or selling tshirts, concert tickets, stuffed animals, vinyl toys, a clothing line, or other branded goods, you would be an idiot to pick the CD, and only the CD. Often, there’s more money in selling things that people will want, if they love your initial creative product. Give away the movie to sell the toys. Give away the crappy, low quality, iphone screen version of your movie to get people in the theatre to see it in epic 3D. Give away your comic on the internet to sell the hardbound signed collection, and give away your book as a PDF so people will buy it from you to put on a shelf, or share.
If you can give away your content at no marginal cost, and then sell something that gains significant value for people who love the content, you should probably stick to that. Especially because the content is going to be available free, anyway.
A lawsuit wins you nothing, except a lawsuit. Maybe.
This ties into the rights point, but needs it’s own clear section - if you sue your customers, they will turn on you. Being treated like a criminal, en masse, encourages behaving like a criminal. Just ask any kid who gets accused of shoplifting one too many times.
Backstory is worth money.
Whether it’s a kickstarter funded documentary, or an open forum where you post pictures of the creative process, or notes, images, etc, backstory will always be valuable, because it leverages an existing connection with the content, and offers the chance to connect with it on a deeper level than is normally available. In addition to offering that deeper connection, it also confers a certain amount of legitimacy, or superfan status.
People will pay for status, but people will continuously and happily pay for the kind of status that displays itself through knowledge, rather than possessions.