Transcript Abundance in Supply & Diversification of Demand

Abundance in Supply
&
Diversification of Demand
By Marc Gauvin
Copyright Madrid 2004
Supply/demand in the Digital Space
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The supply unit is the content hour
Available content hours are increasing
rapidly
But per capita hours for consumption
are constant
Ratio content hours/ hours to consume
is increasing
i.e. Abundance is going up!
Content Abundance/Diversity Pump
Users
More
Decisions
More
Options
More
Fragmentation
Niches
Markets
Abundance
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Markets tend to fragment into
smaller niches
Niche markets multiply
Any niche size no matter how
small is supported
Result is both increased quantity
and increased diversity of content
End users must be active no
longer passive consumers
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The sum of niche markets
becomes greater than any
single market
Capacity for content hours is
increasing but per capita
access time is still constant
Strategic Advantage ?
In analogue media
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there is quality of service
but resource control (production,
storage and distribution)
dominates
In digital media
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Media is cheap and abundant
Distribution cost is trivial
Client duplicates i.e creates the
copy on the client’s device
Everyone can produce
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Diversity of niches and demand
produces:
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Decreased predictability
Decreased period of predictability
Decreased control from the production side
Some predictability from identifying demand but
no way to create demand!
Advertising value decreases as a function of
decreased predictability.
Conventional economic precepts get very
stressed in deed!
Ubiquitous Value?
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In the conventional analogue economy
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Value = scarcity
Hence it is not ubiquitous
Availability of conventional money is
correspondingly made scarce
But Money is the supreme value of the
analogue economy because to a few, it
makes value feel ubiquitous!
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But in the digital space value is
ubiquitous without money
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Like a light, when it is on it is
everywhere
It multiplies itself
But correspondingly, analogue
money per digital value becomes
even scarcer!
So where do prices in analogue
money go?
Down the rabbit hole!
Two Economic Spaces at
Odds With Each Other
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The analogue space
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Limited points of supply
Centralized distribution
Control through supply
Barter is cumbersome
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E.g. Time shifting exchanges of analogue
objects i.e. perishables, generally is not viable
So, conventional money plays central
role
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The digital space
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Unlimited points of supply so no control
there.
Decentralized distribution no control here
either
Barter is optimal
 Time shifting exchanges is trivial
But analogue money still is the only
game in town!
What Can DRM Do?
Control the end user
Or
Manage rights
DRM
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DRM provides the ability to control the use of
content and the Work contained in it
Techniques include:
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Rights expression languages
Key management
Encryption
Watermarking
Pattern Recognition (Music Notation Codec?)
Etc.
DRM
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So DRM permits the full range of control
from Author through to end user
Each player in the chain having control over
how his contribution is used and applied
Any provider of technology in the chain is a
player
From end to end
DRM
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So we are all in this together
What is the big picture?
What do we need to understand to
know where each of us are going?
So we can know where we can go
together
No one is going anywhere alone!
DRM to Control the End User?
 Why control the end user anyway?
 To protect big markets?
 But then prices race down the
rabbit hole!
 E.g.. RealNetworks offers iPod
services and half price!
 Big markets are dangerous places
and heighten the need for security
 Hackers love to break big business models
 In reality talent is everywhere we can always
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entertain and educate ourselves for free and
legally thanks to DRM!
And that is Value
In big insecure markets Users naturally hold
on to their hard earned scarce cash!
So with the rabbit hole and all this fun were
having it looks like hard times for big
business models
But DRM to Manage Rights?
 Great idea for better defining niche
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markets
Many less significant markets kills the
thrill for hackers
Security needs are naturally relaxed
Diversity is safe many eggs and many
baskets easy to define with DRM
Talent shines everywhere
 Diversity makes every digital search an
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adventure
Digital object for digital object trading makes
sense
When it is ‘one to all’ and ‘all to one’, no
matter how big “one” is ‘all to one’ is always
BIGGER!
And time shifting exchanges is trivial.
No need for conventional money in the digital
space unless you want to buy real tomatoes!
Analogue and Digital Value
Exchange
Digital Space
A
Analogue Space
how do we go from here
B
To Here
Digital Space
A
B
Analogue Space
Analogue Money?
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We have already been down the rabbit
hole!
So what can we do?
We can trade digital: “all to one” is
always bigger than “one” no matter how
big “one” is.
But can we time shift the analogue side
of digital analogue trading?
Yes we can!
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Every piece of analogue money used to
be a limited edition of a work of art on a
support, with the option of extending
the edition of that work as needed to
facilitate time shifting the trade of other
goods.
Every piece of digital content is a an
edition of a work!
DRM makes the edition limited and
extendable!
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So Banks safeguard limited editions of
works
So too, every DRM is a Bank of limited
edition of works!
Now the Big question
DO WE WANT JUST ONE
DRM FOR ALL DIGITAL
WORKS?
OR ONE STANDARD
SPECIFICATION FOR MANY
INTEROPERABLE DRMs
Diversity vs. Monolithic Control
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Either a new age is enabled where each
node (individual) becomes the cause of the
whole network.
Like a knitted sweater where every knit
represents the health of the whole fabric
Concentration in maintaining each knit
becoming the mainstay of the new paradigm.
OR
THE END