The Original Sin Of Newspapers: Not Innovating

It's Not Just The Entertainment Industry Facing An Economic Upheaval

from the hello,-energy... dept

Mon, Aug 17th 2009 9:37pm — Mike Masnick

People often ask why we focus on the entertainment industry so much around here, and one of the points I've tried to make is that what's happening in the entertainment industry is nothing but a precursor to what's going to happen in almost every industry out there, as new technologies come about that change the fundamental economics that their old business models relied on. Healthcare? Packaged goods? Food? Financial services? All may be facing similar issues before you know it, and having a clear understanding of what went right and wrong in the entertainment industry will hopefully help those industries avoid making the same mistakes (they can make new ones instead!).

Another industry where this is already starting to happen is energy. In a discussion on HP's datacenter efforts, there's a quick discussion of how the energy industry is facing the same "dematerialization" threat as the music business:

But ultimately, the goal is making the world lighter, also called "dematerialization." Information technology can help replace energy-intensive and carbon-heavy methods--with basic materials, business processes or entire business models. Think of how the digital transformation has completely redefined the production and distribution of music.

Extend that model more broadly: By 2012, all of the servers in the world will use as much power as was used by all of Mexico in 2007. Breakthroughs in photonics allow us to use light instead of copper wire to transmit data. Not only can we reduce the use of natural resources, we can dramatically reduce energy consumption, taking another step forward from the work we've done at Wynyard.

While it may not seem to impact people as directly, I'd argue that what eventually happens in those other industries will have an impact far greater than anything that happens in the entertainment industry -- so we might as well look deep into what's happening to understand it now, before we create a much bigger mess in other industries.

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Filed Under: business models, economics, energy

10 Comments

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Tom, 18 Aug 2009 @ 4:12am

Toasters
i don't know how sci-fi, or is it syfy now, but i have always though that it would apply to all businesses.
Take the Toaster. Probably already there is a group online devoted to producing the best toaster. As open source. So we can all, when the self-replicating printer becomes a bit more existant, produce the best toaster ourselves. Cutting out the Toaster manufacturer.
And this applies to pretty well everything?
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Anonymous Coward, 18 Aug 2009 @ 4:24am

"we might as well look deep into what's happening to understand it now, before we create a much bigger mess in other industries. "

Why? Better business models Mike. If you have no qualms about hanging the noose around the music and movie industries, why suddenly the soft spot for energy?

Either you like your "better business models" thing or you don't.
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..., 18 Aug 2009 @ 5:12am

"dematerialization" threat
What, I can d/l energy now ?
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Anonymous Coward, 18 Aug 2009 @ 5:14am

Re: "dematerialization" threat
yeah, just run a cord and plug it into your neighbor's house - free power!
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Tom, 18 Aug 2009 @ 5:27am

Re:
i think he does like 'better business models'. perhaps he meant 'they' not 'we' make a mess of other industries.
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Nick Coghlan, 18 Aug 2009 @ 5:42am

Re:
The mess in the entertainment industry wasn't inevitable - it came about because the major players chose to try to prevent progress rather than change their business models as the rules of the game changed due to the proliferation of well-nigh flawless copying technology.

The energy market is facing different-but-potentially-related problems as technology aims to both reduce the demand for power and create new cost-effective sources of it.

Many existing energy companies have seen this coming and are working to position themselves to take advantage of it (e.g. most of the big oil companies have long since rebranded themselves as "energy" companies rather than "oil" companies - BP Solar is one of the major suppliers of commercial solar cells on the planet). Others will be caught short and suffer the consequences (e.g. the electricity distributor that wanted to charge people *extra* if they didn't use as much power due to private solar installations).

That's all that Mike is saying here: companies in other industries should look at what is happening in the entertainment industry (and other industries like newspaper distribution) and ask themselves:
1. What current or in development technologies could be as disruptive to my current business as the internet has been to those industries?
2. What strategy do I have in place to deal with the possible consequences of those disruptions? Am I just sticking my head in the sand and hoping it doesn't happen? Am I lobbying legislators in an attempt to make the foreseen disruption illegal before it actually happens? Or am I considering adjustments to my business model that will allow me to cope with the disruption and maintain (or improve) my position within the industry?
3. Is the likely disruption so severe that it will mean the end of my industry as I know it? If my business is going to go the way of the buggy whip manufacturers, then what is my plan for getting out of this industry and into something else before the imminent collapse of the sector is just as obvious to everyone else as it is to me?
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Anonymous Coward, 18 Aug 2009 @ 5:54am

Re: Re:
Yup: "when you customers figure out how to take when you sell for free, how will you stay in business".
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Tom, 18 Aug 2009 @ 5:59am

free power
well free-ish power once you get a working windmill, water wheel, thermal, brew your own methane etc.., then yes it does become free after the initial costs. so yes the energy busines should watch out. i would rather not pay them a penny.
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Anonymous Coward, 18 Aug 2009 @ 6:22am

Re: free power
Careful there, you're talking about criminal interferance with a bussiness model.
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Steven (profile), 18 Aug 2009 @ 7:25am

Re: free power
I strongly suspect that the future of technology will push things to a more individual level, but not quite like that. I expect, within my lifetime (I'm early 30's), to see personal home power generators that take homes off the grid and are a source of practically free power. In my mind they are some form of fusion or fission reaction buried in the back yard like a septic tank that need some maintenance every 100 years or so.

But thats just part of the story. I would also expect nearly all small items a person needs to be 'printable' at home for the small costs of raw materials ("Honey, were out of carbon again"). Also for large scale production costs to plummet.

"open source" already has extensions into circuit boards, processors, small electronic devices, even things like UAV's. I expect this to extend to all aspects of design at some point.
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