By Luciano Schlaen, General Director of Paginar.net Europe
This year started heavy with new chapters in the struggle between consumers and the cultural industry lobby for records, films and books downloads control. The first one was the digital blackout that stopped the anti-piracy law known as SOPA (Stop Online Piracy Act) and PIPA (Protect Intellectual Property Act) at the U.S.Congress and Senate respectively. A few weeks later Megaupload, the famous file sharing portal, was shut down along with the imprisonment of its founder, Kim "Dotcom" Schmitz - in New Zealand by the FBI. And this kind of things are likely to continue occurring during 2012.
But legal action will not solve the cultural industry problems.
First, because the cultural industry was never based on copyright. The true nature of the business model of the cine, music and literature was based on effective control of the copying and distribution of these copies. For years, producers, record companies and publishers held an monopolistic dominance on the technical media of reproduction and access to content. And the consumer had no choice but to buy the physical object (book, tape, disk) or go to theaters or concerts to see, hear or read.
Second, because it will be very difficult (if not impossible) to control the ability that people now have to share digital content with laws. The technology destroyed a business model based on the copy and distribution that sustained the cultural industry for decades. It became meaningless at the minute in which a content could by copied and distributed with a single click. And the culture industry is not yet adapted to this new scenario.
And thirdly because it is easier for many consumers to access illegal than legal content. In several places around the world are precisely those producers, record companies and publishers that choke the legal market limiting rights for commercial distribution of their content electronically to force consumers to go to the store. But for consumers it is easier to click than to go to the store. Of course it is also cheaper because the pirate copy is free. But mostly it's easier.
This new scenario involves rethinking the business model completely. If we accept that the traditional chain of adding value in this industry is production - copy - distribution - consumption we have to think of a business model that focuses on production and consumption. Copying and distribution doesn't add value any more. It's as simple as that.
The cultural industry always took care of production, so they know better than anyone how the machinery of creation of records, books and movies works. But there is no experience at the consumption instance. And the focus should be putted at this one not to be under Amazon or Apple wishes.
These are the keys to reinvent an industry that feels in check and still have not found the right answers to the crisis. Perhaps because they have not dared to accept this new reality and not asked the right questions. And it continue to battle on the legal front instead of doing it down in the market with good products and services that adds value for consumers. A value which they are willing to pay for.
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