CONCENTRATING THE MIND: Thoughts About Distribution

How did you watch the Obama Inauguration?

I had intended to find a place with a large screen, preferably full of Americans, and share the audacity of hope. After all it’s been a long time since a politician inspired that emotion. In the end I watched it from my desk. First I went to CNN. Next to the scrolling Facebook list telling me what its members were thinking and doing was a blank space where the screen should be. By 3.30PM EST CNN had served 21.3 million streams and I wasn’t one of them.

I jumped over to the BBC. They have one of the world’s most expensive web sites, more of a web city, fuelled from the billions of pounds in annual license fees. Unlike its commercial competitors I’m not begrudging the budget because the Beeb invests in R&D and the News site is the online equivalent of the World Service on radio, a beacon of factual information. But on this day they weren’t serving a video feed of an iconic moment in history, but a text feed. Hello? This is how you don’t spend my license fee? I don’t care that you might be afraid of server meltdown or – worse – protecting your TV platform. You’re not spending my money in ways I want!

So I switched to TV. I went to Zattoo, a Swiss based web site that runs a plethora of European TV channels in real time, opened the link and watched BBC1 on my laptop. It was everything I wanted, bar the company of enthusiastic Americans.

They say that content is king. Rubbish. Distribution is king. Take “Yesterday” and any other Beatles song. “Yesterday” is the most covered popular song of the last 40 years with hundreds, probably thousands, of cover versions. It’s a goldmine. No other song they wrote or recorded comes close in popularity. Carefully guarded and held back by The Beatles their songs are all equal, nothing more than potential commercial value, unequal only to the songwriters. (I doubt George rated “Savoy Truffle”, listing the contents of a chocolate box, as highly as “Something”, a hymn to his future wife – and that’s creative value, not monetary value.) But distribute them and “Yesterday” is way more valuable than any other song you want to name.

Another common metaphor is ‘music like water’, meaning it’s liquid, flowing everywhere. But how does it flow from A to B without pipes? It’s distribution that’s becoming like water. When it encounters a rock or obstruction it flows around it. CNN isn’t working? I’ll go to the BBC. They don’t have the format I want? I’ll go to Zattoo. If that hadn’t worked I would have been really old-fashioned and turned on the TV. The major content owners – music labels, film and TV studios, book publishers – wish that a dam can be built to control distribution, just as an electricity company controls dammed water, but building a dam bigger than the Internet is an impossible task. Not because a system designed to withstand nuclear attack can’t be contained, but because content is both adept at acquiring multiple start points and delivered to an end-user platform that is rapidly becoming a matter of choice.

Ask anyone with an iPhone how often they use it for Internet access. The answer, in my scientific study of questioning everyone I see carrying one, is all the time. Access has become a matter of whim, not location. When it’s your plumber pulling his iPhone out to check costs at the local hardware store you know as well it’s become a mass-market item. In its wake the phone and PDA manufacturers are introducing their own versions, giving away mobile music and offering mobile TV packages if you will not bite the Apple but buy theirs instead. The iPhone is just a fancy iPod so using it for music and video is obvious. What hasn’t been obvious is the recent growth in using other brand mobile phones as a music player – not because Sony and Nokia are spending millions trying to convince us that’s how they should be used, but because perception is changing. Radio on Nokia phones is one the brand’s most used apps. Pandora and Shazam hold the same position in iPhone apps. Music and film acquisition will follow – both legal and illegal.

You think getting music, films and TV via bit-torrent is a computer-only activity? Try googling “bit-torrent” and “mobile”. It’s also moving to TV. The guys running TV-based VOD services like Lovefilm and Joost are talking about it as an essential technology to distribute films and TV shows because it’s a very efficient way to distribute high-bandwidth content. How long before someone’s using bit-torrent on a TV VOD platform for uses the copyright holders haven’t sanctioned or even thought of?

But forget the Internet on TV, how about TV on the Internet? More than 6 million copies of the BBC’s iPlayer downloaded in a year so that people can watch TV on their laptops. Plus copycat players from the other channels. Add in a few million streams an hour from YouTube, Vimeo and all the other video sites. Factor in the growth of TV-on-mobile over the next few years…. We’re filling up the Internet with our penchant, our desire – our right! – to have TV available at whim, when we want it, on a screen that’s 3 inches in our hand, 15 inches on our lap, or 60 inches in the living room. Bit-torrent looks essential to the guys who make all this work. Recently some bright spark trying to protect his copyrights proposed that bit-torrent would soon be shut down. Dream on.

Where bit-torrent is weak is in the customer experience. Until Vuze bought Azureus there was no content interface in the app itself – unlike Limewire et al – and what they have is hardly a Wikipedia of content offering. You have to find and go to an appropriate Web site. Then you need the seeders, peers and leechers, without whom bit-torrent doesn’t work. Not a problem if you want Lady Ga-Ga or The Killers, but it could be months before the two guys with “The High Numbers at The Marquee Club 1964” are online at the same time as you. With distributed p2p networks the available content is as wide as the network – just browse through the music made public on another user’s drive and when you see something you want, get it.

With more music more often, this is important. Getting music has become a spontaneous activity, whether it’s from seeing something on a person’s hard drive, clicking a link on a bit-torrent Web site, responding to an ad from an e-music retailer, or even heard on the radio. Music is of such quantity and volume that if we don’t acquire that new discovery now it will be forgotten in the next tsunami wave of blogs, promotional emails, radio and last.fm playlists, Dime A Dozen search results, and tantalising hard drives offering more music without which we’re that much emotionally poorer. I have 16 CDs and a gigabyte of music I bought in the last year that I’ve yet to listen to, not to mention unheard concert recordings, some of which the artist actively gave away. It hasn’t slowed the river of new music flowing into my life. Apparently I’m a small fry compared to Generation i; they consume by the gigabyte, scanning it and dumping it so the next drive full can be consumed. And the record labels want to control these acquisition habits?

This is one reason music business activists are campaigning for some form of blanket license, what those no-taxation-without-representation Americans named a “music tax”, to get money from all this activity. Not just for all those unpaid copies of the 7 - 8 million official music releases in circulation but also the estimated 25 million unofficial music tracks being passed around. Saying that this is a complicated task is a massive understatement.

First of all, there is the huge majority of people online who either aren’t interested in music or whose buying habits are casual. In the olden days, the average UK shopper bought 5 CDs a year. How many are doing the same online? Can we assume that 80% or more of British Internet users don’t care about music, or buy at most 5 albums a year from iTunes? What will they say about a compulsory music license fee, being charged a second time for music they’ve already paid for? Either a system has to be created which targets only those people enjoying free music and to which they will sign up, or the license fee has to be so low that the majority will either not object or do no more than grumble. How could you make it palatable? What if it isn’t sold as a music fee but a fee to support culture?

The government on the Isle of Man is planning to do just this: charge £1 a month at ISP level for every online subscriber on the island. But where the music companies are leading, other media giants are sure to follow. German consultancy ipoque observed in 2007, from reading 1 million ISP user logs in seven countries, that 80% of illegal p2p traffic was films. It’s naïve to think film studios won’t demand a piece of the action, followed by TV companies, book publishers and anyone whose copyrighted materials are being passed around the Internet. Before you know it, that £1 will be £5 or £10. Good luck selling that as a culture fee, especially when so much film and TV consumption still happens on TV. Isn’t that why I’m paying £40 a month for a pay-TV subscription?

(At least the cable and satellite media companies selling bundled packages of pay-TV and Internet access (Sky, Virgin, etc.) are well positioned to incorporate a license fee into their billing structures.)

There’s also the perception that music purchasers will be supporting so-called pirates. If I buy my music and films, why am I subsidising Captain Jack Sparrow?

Critics say it won’t happen. Most ISPs don’t want it to happen. Government is prevaricating about legislating for it, except France, a country where the State invades so much of one’s life it’s not that surprising; I suppose it’s coincidental that the music label that sells 40% of all new popular music is owned by a French water company. In any case the EU Government has already signalled they think that in present form it’s illegal. But government must be concerned. If the principle of copyright is so widely ignored, what are the implications for patents and other intellectual property? This is an important question. There are now compact, portable machines that can make exact replicas of physical products. The US Army is considering whether to put them in the back of Humvees. When a part breaks while the car is in the field, a soldier just replicates a new part and replaces it. Imagine that in the hands of a few hundred thousand entrepreneurs with a disregard for intellectual property rights.

Tracking media files as they flow through the Internet is easy. The infrastructure is already in place. A British company called Detica has their boxes installed within every ISP, tracking files and emails, searching for terrorist activity. They can identify files down to packet level, so mp3s and mpegs pose no problem. The challenge is making sense of all the poor and non-existent metadata. How many different tracks are washing around labelled Track1, Track 3, or nothing at all? All that multiplicity of missing metadata will need to be separated and identified before rights holders can be accurately compensated.

That’s simple compared to deciding how the revenue is paid out. There are at least eight stakeholder groups involved: ISPs, mobile operators, music publishers, music labels, rights societies, songwriters, performers, and managers, each with a view of what their income should be. In the words of music consultant Ted Cohen, there are eight people at the table and they all want two-thirds. Dee Hock had the same problem in the Fifties when he created Visa, knowing that all the banks necessary to make the system viable would squabble for years over their commissions. His solution was to set up two companies, one an administration group that could take the necessary time to negotiate the financial outcome and the second to get on with the business. In the meantime, the money was held in an escrow account.

Historically, the monetising of music business disruptions – the creation of commercial radio, for example – have been settled with blanket licensing. But with so many challenges to solve this time, the odds on it becoming reality are not good. There may not be one solution. Samuel Johnston, speaking of a condemned man who wrote his autobiography in the two weeks before his execution, quipped that knowledge of one’s impending death “concentrates the mind wonderfully”. Concentration is what’s required, because if current technology doesn’t already offer enough problems, consider the distribution formats that are coming.

For instance, there’s mesh-WiFi, a citywide integrated wireless network. Emergency services have been using such systems for years and like the Internet, connections work their way around failures to ensure a 100% service. San Francisco has been considering making their current emergency mesh available to the public – after all, they paid for it. Citywide, always on, music and films downloading and streaming to me on desktop, laptop, mobile phone, wi-fi music player, Internet equipped car radio, all of them from different service providers...how do you make sense of that?

Or Bluetooth, the tech of choice for cash-strapped high schoolers. Bluetooth 3.0 will be released this year, reportedly transferring files at speeds between 100 and 480 Mb per second. It’s backwards compatible, allowing old devices to connect with new ones. At those speeds the full lossless FLAC format (which is 400 – 600 Mb an album) becomes a viable commercial format. It also means films traded in a few seconds. It means mass iPod exchanges in under a minute. It means slotting one of the new multi-gigabyte SD cards into my mobile phone and selling the music and films on it to become king of the school playground. It gives unintended meaning to the marketing phrase “Nokia Comes With Music”. What must give nightmares to the media industries is that this isn’t across a network but device to device, visible only to those involved.

Distribution is king and its empire keeps growing. Understanding how to make intellectual property and copyrights prosper within it is an urgency that requires cooperation, decisions and looking forward. To borrow a phrase from the new President, it requires audacity.