|
Industry analysts as the new mantra for
the digital economy are chanting 'Content, commerce and community', with content
being 'the' driver for the all new empowered consumer in the 'click-deep' economy.
However, in an age in which content is being rapidly stripped away from its
medium, copied and distributed for free over the Internet, intellectual property
is becoming 'the' hot issue within the media industry. For the creative enterprise
in which intellectual property is their core asset (film, television, music,
magazines, newspapers and books), this poses a significant threat, causing business
models to be radically contorted in order to sustain their existence. After
all, how do you catch and prosecute a publisher on planet-e?
The music industry at present is the 'canary down the digital coal-mine'. We
have seen legal disputes between the Recording Industry Association of America
(RIAA) against Diamond Rio (over its MP3 player), Napster (for its service which
allows the swapping of MP3 files without ever visiting a web site) and more
recently, MP3.com (for its 'Beam-It' service). Such disputes are a sign of things
to come for other enterprises that rely upon intellectual property. Music has
been at the forefront of these disputes for two key reasons: the file size of
a song, meaning easy distribution and the cultural appeal of music to the demographic
of the Internet user. However, with technological progression similar legal
disputes will soon be impacting upon the film industry amongst others, in which
pirated films will be able to be downloaded in a matter of minutes rather than
hours.
Encryption and/or watermarking of the information, facilitating tracking of
illegal copies is thought to be a way forward, however this does not overcome
the issue that content is now 'free'. As a result, creative enterprises are
now slowly realising that 'intellectual assets and property will depreciate
while intellectual processes and services will appreciate' (Wired, July 1995).
Within the music industry, we have seen the emergence of three models for the
future. The first is by offering a quality service, for which the consumer pays
for the intellectual property (e.g. icrunch.com). The second, is to use the
Internet to promote off-line intellectual property, by giving away 'tasters'
such as individual songs (David Bowie, Madonna and Public Enemy) or chapters
from books (Seth Godin's 'Permission Marketing'). The third model raises it
arms and allows consumers to market the product themselves. An example of this
growing trend has been with the rock group 'The Grateful Dead', which have allowed
recordings to be freely distributed on-line, resulting in increased sales of
ancillary services such as concert attendance and merchandise.
However, the ability to patent communication
techniques on the Internet has emerged as a more legitimate way to protect intellectual
property and possibly more threatening to a truly competitive landscape. For
example, amazon.com has recently been granted ownership of the one-click technique,
where one Web site links to a purchase transition on another site - the so-called
'Internet based customer referral system'. Many players use this technique,
therefore the danger is that amazon and others 'on the ball', will put a stranglehold
on e-commerce earning additional revenue by suing their competitors. Amazon.com
has already sued competitor barnesandnoble.com over another of its Web patents.
The word of advice from these lessons is to examine how you 'value' intellectual
property within the business and your patents. In the digital economy, patent
portfolios can be both an offensive and defensive tactic and intellectual property
and its protection needs to be closely examined.
matt@folkdevil.com
© Matt Hardisty, 2000, 2001. All Rights Reserved,