Digitalization of media

The future of music is digital, that is hardly news to anyone. There are still some in the industry that do not get it, but the hard fact is that CD is at the end of its lifespan. Of course it will live on just like LP is still available for collectors, but with this I mean that the main format of distributing music is going to be digital. The reports have been telling this for years. This does not mean that musicians are out of work – how can they be when there is more music consumed today than any other time in history. The ecosystem is changing, however, and the old business models or value networks do not work anymore. A perfect example of new way of thinking the business is Spotify. For artists the revenues need to come more and more from other sources than selling music – which has not been a huge source of income in the past years anyway to but a few.

Movies and television are next on line to become online. DVD is predicted to have two years time to be the main format of distributing movies. At the same time streaming services are booming and linear television is in trouble. People want more choice and those that can provide it are the winners. Piratism is blamed often by video and music industries for stealing from the content producers’ pockets. It is a valid claim, but as long as there are not as easy legal alternative channels of getting the content, it is very hard to fight piratism. By nature, most people are law-obeying and will quickly adopt new ways of buying and consuming media if it is easy to use and secure enough. We come again to the ecosystems – collaboration between producers, distributors and consumers, partners and competitors alike leads to long term success. Apple iTunes -ecosystem is an example of a different kind of ecosystem, one with a dominant player with total control over it. It has worked well for Apple and made a big difference in the market – and consumer habits. In my opinion it is not a lasting model, however. Already Apple is getting a lot of pressure from all sides and more open ecosystems are gaining supporters.

Books are the third form of media that is buzzing right now about digitalization. Amazon’s Kindle electronic book reader was the first to finally be accepted as almost equal to a real book. The reading and browsing experience is not as good as with a regular book, but the possibility of online purchases and having 1500 books with you makes it very appealing. Amazon is not the only one in the electronic book reader market, however, the likes of Sony and Barnes & Noble among others are already in the market and for example Apple is rumored to have something coming. At the same time Google has a huge project called Google books library to scan the books of of the world aiming in making them searchable. In October 2009 they had 10 million books scanned. The opportunity window of making the sales and distribution channels work are the same that music- and video-industries had. If done right, piratism will remain a marginal problem, but if not, the book industry will join the same boat. The digital ecosystem once again is needed.

As a conclusion, the fact is that digital content can not be controlled with the same laws and manners physical media is. That has been tried and the experiences are not good. In addition, the way people are consuming content is changing. Jyri Engeström made a great presentation in Mindtrek about Snack Size Sociality that hit the point. Digital ecosystems are replacing rigid value chains in the digital age and fighting bits and pixels with guns and bayonets is not going to work.

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