Lack Of Food Copyright Helps Restaurant Innovation Thrive

from the yet-again dept

We've discussed over and over again how a lack of copyright protection in the fashion industry helps that industry thrive, because it helps disseminate fashion trends faster, helps better segment markets and (most importantly) gives designers more reasons to keep working on the next thing to stay ahead of the competition. It's a great example of a creative industry that is highly competitive and highly innovative without copyright. Other industries where we've seen similar things include the magic industry and stand up comedy. At times, we've also mentioned the restaurant business, but haven't looked at it in any great detail.

Reader Ephraim points us to a recent post at the Freakonomics blog that highlights how the restaurant business absolutely thrives creatively, despite a lack of copyright protection. The main example: the rise of Korean taco trucks in LA. As you may or may not know (and trust me, you're better off if you are familiar with this trend), a few years back, some enterprising folks set up a Korean taco truck in LA called Kogi. It quickly became a huge sensation, in part because the food is awesome and in part through smart marketing, including being one of the first food establishments to actively embrace Twitter.

But what happened next is quite interesting. Throughout LA (and now around the country) there's been an explosion of Korean taco trucks. And, it's not just limited to trucks. As the article notes, the large chain Baja Fresh is now offering Korean tacos as well. Believers in strong copyright have trouble explaining why this happens. According to them, without copyright as an "incentive to create" people won't innovate because they can't be rewarded, but that's not what's happening at all:

As readers of our past posts know, the conventional wisdom says that in a system like this no one should innovate. Copyright's raison d'etre is to promote creativity by protecting creators from pirates. But in the food world, pirates are everywhere. By this logic, we ought to be consigned to uninspired and traditional food choices. In short, the Korean taco should not exist.

But the real world does not follow this logic. In fact, we live in a golden age of cuisine. Thousands of new dishes are created every year in the nation's restaurants. The quality of American cuisine is very high. The so-called molecular gastronomy movement has innovated in myriad (and often bizarre) ways that have filtered down to more modest restaurants all over the world. Television shows such as Top Chef and Iron Chef challenge contestants to mix and match improbable combinations of ingredients with little warning or time. Our contemporary food culture, in short, not only offers creativity; it increasingly worships creativity--and many of us worship it right back.

So why isn't the "theory" matching up with reality? The author's come up with a few theories, but it seems to me that the biggest reason is the same one why the arguments that copyright is needed to get people paid is so wrong: they're not selling copyright. They're selling a product. And you can still sell your product whether or not someone can copy you. In fact, if someone can copy you, you have incentives to keep innovating and adding extra value that the buyer can only get from you -- such as prestige or ambiance or experience.

The authors also point out another reason (similar to the one we've noted about comedians), which is that there are social norms involved as well, focused on reputation. If you're seen as just copying the works of others, you are looked down upon, and reputation is quite important in these fields. And, of course, reputation and social norms function just fine without copyright.

The authors of the blog post conclude with a dead-on assessment:

The key point is that culinary creativity is flourishing, and it doesn't depend on copyright. Like fashion, food challenges our preconceptions about the economics of innovation--and perhaps should challenge our legal rules as well.

Pretty much everywhere we look, when we find industries or fields where copyright doesn't exist or isn't relied upon, we see the same thing: much higher levels of competition, more and faster innovation and an overall thriving industry. This is the kind of actual evidence that never seems to be discussed in debates over strengthening copyright laws, but should be. It also explains the supposedly "counterintuitive" research that has shown as there has been less respect for copyright in movies, music and books... the rate of production for each of those has increased as well (again, contrary to what copyright system defenders will tell you).

At what point can we put the "without copyright no one would create new content" statement into the mythbin of history?

Filed Under: copyright, fashion, food, innovation, restaurants

Is It Better To *Require* Or *Request* Something In Return For Free Content?

from the the-debate-goes-on dept

Over at Music Think Tank there's a blog post provocatively titled: Why Music Should Never Be Given Away For "Free", which brings up a point I've heard multiple times from various music industry marketers (many of whom I generally agree with). They say it is okay to give away music without a monetary transaction taking place, but instead you should demand something else in return. In this post, he suggests requiring an email address, a retweet or a Facebook share in order to get free music.

I definitely understand the general rationale for this line of thinking, but I'm afraid that people are going too far with it, and it's actually harming the value of free music in some cases. Obviously, it's great if you can get something (monetarily or not) in exchange for the music, but putting up a barrier can also be harmful. First of all, if it's truly a brand new fan who hasn't heard your work, they might not be willing to commit to you in that way. Especially when it comes to Tweeting or Facebooking an artist. If I don't know the artist, there's no way I'm mentioning them to all of the people who follow me on various social networks. On the flip side, when I do see friends who make those kinds of Tweets, they feel like spam. They're not at all convincing and they don't feel authentic. They feel forced. Honestly, when I see people post social networking messages in exchange for free tracks, it actually makes me less interested in the musical act, because I feel like they need to beg for attention, rather than letting the fans organically give them attention.

Finally, part of the reason the whole "free music" world exploded the way it did was because of the massive simplicity and lack of friction in music sharing, which made music discovery and promotion much more seamless and easy. Putting required friction back into the process seems like a mistake, and will likely just drive fans (or potential fans) either to other artists or back to the same file sharing systems that remove that friction. That doesn't help anyone.

So rather than requiring an explicit exchange, it always seems a hell of a lot more effective to offer the content for free, but ask for the exchange as a voluntary setup: "If you like these songs, tell your friends or sign up for our mailing list" or something like that. This way it's not forced. It's not inauthentic. It's not friction. It's about trusting the listeners, rather than trying to force them to act in a certain way.

Filed Under: business models, economics, email, fans, free, music, social media, transactions

Newspapers Doing Well With Membership Clubs Instead Of Paywalls

from the join-the-club dept

One of our biggest complaints with news publications that insist "a paywall is the answer" is the fact that they never seem to actually add any more value to their publication that makes it worth paying. They're so focused on getting people to "pay for content," they miss the fact that there's plenty of competing content, and the real focus should be on providing value that builds a community. Thankfully, not all newspapers are making that mistake. Bill Mitchell, at Poynter, has a post about a new study looking at newspaper business models that both highlights that straight paywalls need to be about more than just paying for content, but also which highlights the success some publications are having with membership clubs, which specifically provide additional value behind the content for those who are willing to subscribe:

Take, for example, the street-level bookshop at Politiken, the leading newspaper in Denmark. I stopped in there one drizzly Saturday morning last Fall after teaching in Poynter's Scandinavian Summer School. I picked up a couple of travel guides and an English language version of a popular Danish novel. But I paid my bill and left the shop oblivious to the range of products and services available to Politiken subscribers via its Politiken Plus loyalty program.

"We can say 70 percent of (our subscribers) use Politiken Plus during the year," the paper's sales and marketing director, Poul Skott, told the authors of the WAN report. "The more products we have the better ... the harder it is to say good-bye to the newspaper. It's going to hurt a bit, because you can only get a Plus card as a newspaper subscriber."

This Google translate page will give you a sense of what the program offers, including special offers on travel, restaurants and theater, and how the activities and deals of Politiken Plus are integrated into the newspaper.

This actually fits in well with some of the suggestions that people came up with back at the Techdirt Saves* Journalism event last month, highlighting how publications can focus on building up services for the community which keep them loyal to the publication and the community itself.

It sounds like the early results from such programs suggest they work well (or, at the very least, better than comparable newspapers that don't use them). Still, reading through the analysis, it still feels like most publications are looking at these programs as ways to "retain subscribers," not as a central reason to buy. That is, they're still focused on "selling the newspaper" with this is a bonus add-on, rather than trying to sell this bundle, which is made more valuable by getting the news as well.

Filed Under: membership clubs, newspapers, paywalls

The Lack Of A 'Golden Ticket' Business Model Doesn't Mean You Give Up And Go Home

from the how-do-these-people-keep-their-jobs? dept

This one is a bit surprising. Following the recent nutty statements from Prince, Kara Swisher has decided to take the contrarian position to explain why Prince might not be so crazy after all. Her reasoning is that she's spent several days down in LA talking to entertainment industry execs (her first mistake), and they seem to agree with Prince that the internet is a darned problem. Of course, to some extent, that's like asking the leading buggy whip makers their feelings on automobiles. Just because they haven't figured out a way to thrive doesn't mean that the automobile revolution is "over."

After spending several days here in Los Angeles this week, talking to execs, talent and others who toil in the entertainment industry--I can't say what I am hearing is that much different in terms of the continuing frustration with the lack of decent business models to replace the ones that have worked for so long and been so lucrative for the entertainment and media industry.

This is how disruptive business models work. The disrupted whine and complain about how the disruptors haven't shown them how to continue making the same monopoly rents they made in the past. But that, of course, ignores the nature of disruption. Disruption doesn't work by having someone come along and show the legacy players how to exactly replicate their old profits. It's the exact opposite of that. Disruption is when others figure out how to break down the barriers to do something more efficiently, and undercut the old business model. But that doesn't mean that there's anything wrong for the underlying benefit that people get.

More entertainment content -- movies, music, books -- are being made today than ever before. Anyone bitching and complaining about how the internet is "destroying" the industry isn't paying attention. What they should be focused on are all of the massive new opportunities created by this sudden glut of content, combined with massively more efficient (and often free) methods for content creation, distribution and promotion.

From music to movies to television, the biggest minds here still sound perplexed as to what will finally be the golden ticket to carry them through to the inevitable next era of digital distribution.

That single sentence basically describes the problem. These guys are sitting back and waiting for someone to hand them a golden ticket that replicates the old ways of doing things. That's not how it works. No one gave the buggy whip makers a golden ticket that let them keep their old lines of business going.

But the lack of a golden ticket most certainly does not mean there are no business models. Those who are embracing new business models are finding plenty of opportunity to do amazingly well (in fact, better than they did before). But, for the most part, it involves hard work and multiple streams of revenue. It's not the old "sit back and let the cash roll in" model that the industry is used to. But, some of us think that's a good thing.

"Why is the consumer always right?" said one exec to me this week in a typical statement. "You can't have a business if there is no business model."

It's a good thing the exec who said that did so anonymously, because otherwise his or her board of directors should be calling for him to be fired. The consumer is always right in a competitive marketplace because if you don't serve them, your competitors will. That there are still entertainment industry execs who don't get this is scary. And, saying there are "no business models" is so wrong that it again seems troubling that this exec still has a job in the industry. We spend a lot of time pointing to all sorts of working business models every day. They may not be the "golden ticket" that this exec wants where he gets to sit back and relax and see the cash flow in, but they can actually bring in a lot more money by leveraging a more efficient system, connecting better with fans, and giving them a real (scarce) reason to buy, rather than trying to bully them into paying through artificial scarcities.

From there, Swisher reverts back to Prince's statements:

If you remove the sillier parts of his quote that preceded it, such a statement is not unreasonable from an artist who wants to be paid for his creative efforts.

Thus, instead of mocking that sentiment, perhaps it is time for tech leaders to figure out a way to keep talent from being dragged into the future without so much kicking and screaming.

The role of the disruptor is not to make life easy for the disrupted. Swisher and these execs seem to be confusing the role of certain folks in the legacy industry with the overall entertainment industry itself. As noted, the entertainment industry is thriving. More movies, music and books are being created. More money is being spent. It's just that it's going to different players. There's no reason to "figure out a way to keep talent from being dragged into the future." The opportunities and wide open path are there. The problem isn't that tech leaders haven't made it easy for them. They have. It's that these guys are so myopically focused on the way they used to make money they don't realize that the new opportunities are already there and have been embraced widely by others.

Filed Under: business models, disruption, entertainment industry, prince

UK Hairdresser Fined For Playing Music Even Though He Tried To Be Legal

from the the-system-is-designed-to-trip-you-up dept

We've pointed out many times just how ridiculously complex various licensing collection agencies are in the music space, especially when multiple collection societies cover the same music. The whole system seems designed to make it nearly impossible for anyone to actually play music legally. Take, for example, this situation in the UK, pointed out by reader mike allen, involving a hairdresser who had paid for a license from PRS For Music just to be allowed to turn on a radio in his shop... only to discover that he failed to pay the other UK collection society, PPL (home of the infamous CEO who insists that "for free" is a bogus concept). So even though this guy thought he was legit, he still ended up with a fine for £1,569.

In his defense, he claimed that he'd never even heard of PPL, and since he had a PRS license, he assumed (quite reasonably) that he was in the clear. Now, I'm sure that defenders of the system will quickly step up and say that it was his responsibility to find out what music licensing groups you have to hand over a tithe to each year, but all this guy wants to do is turn on his radio. For most people, it's just common sense that you shouldn't have to pay a fee just to turn on a radio in your barber shop. And then, once you're informed that this totally nonsensical situation is, in fact, true, it seems quite reasonable to then assume that one license will let you turn on the radio. Finding out that you need two (or more) separate licenses just to turn on the radio (even though the radio already pays its fees and the music acts a promotion) just seems ridiculous for everyone who isn't a recording industry exec or a long term copyright lawyer.

Copyright is not supposed to work this way.

Filed Under: collection societies, copyright, fines, licenses, uk
Companies: ppl, prs

High Quality Fan Flick Leads To $8 Million Hybrid Fan/Investor Funded Pro Film

from the these-things-evolve dept

Four years ago, we wrote about the amazing quality of Star Wreck, a fan-created Star Trek spoof that was created on effectively no budget, for fun, but which had stunningly good special effects (especially for no budget). We pointed this out not to say the future of film was such fan labors of love, but to note that the claims that professional movies needed $200 million budgets to create amazing special effects was a myth. However, we've had a few Hollywood insiders use this particular story time and time again to falsely suggest that we claimed that Star Wreck represented the future of the movie business.

But, what's interesting is what's happened since Star Wreck. As we noted last year the filmmakers behind Star Wreck have been busy at work on their latest project, called Iron Sky, and they were experimenting with a sort of hybrid funding model that included a fair amount of fan support, whereby fans could buy "War Bonds" to crowdfund a portion of the movie.

Wired is now reporting that the film has raised 90% of its $8.5 million budget, and they're close enough that plans are moving forward to get the movie production underway. Again, this particular effort was a hybrid. Part of the money is fan funded and part of it involves traditional movie investors.

But what's most interesting to me is how this story progressed. It went from some fans messing around and creating a rather impressive film visually speaking, to a new $8.5 million production. $8.5M is still a small amount from a movie-making perspective, but it's not nothing. Plenty of excellent indie films have been made for a lot less. And, of course, you never know what happens next, after this film is made as well. And that was really the point. It was never that the model that created Star Wreck was the answer, but that the overall ecosystem is evolving, and its evolving to a world where the fans and the community really area a part of things, rather than looked at as evil people who just want stuff for free. Embracing your community leads to wonderful possibilities.

Filed Under: business models, fan funding, films, iron sky, star wreck