Stop Thinking That Tech & Content Are Fighting Each Other

from the forward-thinking dept

The following is a guest post from Martin Thornkvist, who both runs a Swedish indie record label, and works for Media Evolution -- an organization designed to help its various members learn about and embrace new media innovation opportunities. This is cross-posted from his blog at Media Evolution, and raises a really good point. Too often people talk about technology and content as if the two are at war with each other, rather than recognizing how it's a complementary relationship.

The first quarter 2011 Apple made a profit of $26.74 billion $6 billion. An impressive 17% of that is from their latest product, the iPad. Having followed Apple's reports for some years it struck me just how unimportant content distribution is for them. In economic terms at least. 

The iTunes store counts for only 5% of Apple's overall profit. In light of that fact, I have a hard time understanding why they are upsetting content providers by increasing the areas where they take a cut of the revenue.

It's obvious that Apple, and other tech companies, are using content to sell hardware. And damn, they are good at making us buy new products each and every year.

Hook and bait

It's obvious that the main objective of dealing with content for Apple, and tech companies in general, is to boost hardware sales. These days you can't hear a mobile executive talk without mentioning the importance of building an ecosystem for content to sell handsets.

The fisherman needs both a hook and bait to catch a fish. The fish is too smart to go for a hook without bait, like customers with tech products. And the bait without a hook is a fiesta for the fish rather than the fisherman, kind of like being a fish in a bay of pirates.

When looking at the media landscape we can see that everybody wants to be the hook. The hooks are owning the customer and the ecosystem in which they interact. That means they can control price, pace of releases and the right to set the rules of the game. 

The media industries were used to being the hooks. That changed many years ago. Now, it's just about creating those alternative hooks of income streams yourself.

To many the question of being a hook or a bait is emotional. Everybody sees their work as the center of the media landscape and wants the rest to obey to their wills.

Stop making life hard for each other

Even though content distribution represents a small percentage of Apple's overall profit, they are making life hard for content producers by changing the rules of the game. Most recently they announced that for publishing companies to sell their subscriptions inside applications, they will take a 30% cut. It's still uncertain whether that counts for music apps like Spotify as well.

The content side is making it equally hard for tech companies that want to develop new media platforms. Music labels, film studios and book publishers can arguably be said to make it a nightmare to license their products. This is instead of acknowledging developers and engineers to be their best buddies to create new ways of providing content to customers, and eventually help them make money they badly need.

Interdependent relationship

We need to understand that technology is nothing without content and content would be nothing without technology. Technology and content for sure has an interdependent relationship.

For a long time the content producers had the upper hand. Right now the technology providers act like they have it. But in the long run they both need to cooperate to keep prospering.

Filed Under: complements, content, strategy, tech
Companies: apple

Is It Too Much To Expect Judges In Tech Related Cases To Understand Tech?

from the just-saying... dept

Eric Goldman highlights yet another case where basic technology illiteracy leads a judge to make very questionable statements. In this particular case, a judge declared that because a specific phrase ("spoiled brats") was not found in the metatags of a website, someone who searched on that phrase "would likely not encounter" the page in question. Yes, the actual terms did appear on the page itself -- just not in the metatags. As Goldman notes:

What??? Putting aside the fact that the metatags were ignored by many of the search engines even at the relevant time (back in the late 1990s), this is a backwards way of assessing site visibility for the search term "Spoiled Brats." So what if the term Spoiled Brats wasn't in the metatags if the term was on the page?

Once again, this raises questions about how those who are technically illiterate on specific subjects are able to make rulings where a basic understanding of how the tech works could make a pretty big difference on how a judgment comes out.

Filed Under: judges, metatags, tech

Tech Companies Worried About Unions

from the recession-time... dept

It never fails. As the economy collapses, someone thinks that the answer is greater unionization. It happened back in 2000 when the tech bubble collapsed, and it's happening again today, in part due to recently proposed legislation that would make it easier to unionize. Apparently, the tech industry is especially worried about this -- and they should be. I'm very much a student of the economics of unions (I do have a degree in labor relations, after all, which included more classes than I'd care to remember on both labor history and labor economics) and while I recognize the tremendous value that collective bargaining provided a century ago to workers who were helpless to fight back against abusive management, that's not the situation we're in today. Unionizing the tech industry would be a disaster for the economy and innovation.

Collective bargaining is one thing, but unions tend to be more focused on protectionism, rather than just getting workers together to bargain a deal. And much of our innovative environment is encouraged by a dynamic workforce with increased job mobility, allowing for a cross-pollination of ideas, as opposed to a stagnant and limited workforce. Unionization takes away the necessary flexibility of both workers and employers, greatly slowing down the pace of innovation. It could make sense in a static, totally mature environment, but it's difficult to think of many of those. These days, almost every industry needs to be innovating, and you don't do that with a unionized structure. Just the very nature of building a structure that encourages an antagonistic relationship between "workers" and "management" misses the point, these days. A friend mentioned the other day that workers today are more likely to be shareholders than union members, so perhaps they'll recognize this and not go down a bad path that leads to fewer jobs, less innovation and more economic toil. Unions are the last thing that the tech industry needs right now.

Filed Under: economy, innovation, tech, unions