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Making money selling content that others are giving away
Karp A.  Communications of the ACM 46 (1): 21-22, 2003. Type: Article
Date Reviewed: Apr 3 2003

Alan Karp’s paper reveals the bitter truth about the content industry’s need to radically reexamine its industrial-age business models, in order to become profitable again.

Karp’s common-sense advice about the critical need for the industry to consider “added value” and “barriers to entry” stems from a recent barrage of flawed legislative proposals lobbied for primarily by the content industry (such as the proposed peer-to-peer privacy protection act press release from Howard Berman (R-CA), which can be viewed at http://www.house.gov/berman/pr062502.htm). His most telling statement, reflecting the current business model of the content industry, is this: “Those calling for revision of the copyright laws were never paid for content; they were paid for copying and distributing content.” The content industry is trying to compete using an outdated business model that relies on centralized control of communication and distribution in an age where peer-to-peer computing has completely decentralized these same channels.

Recent copyright controversies have created two polarized camps, consisting of content providers on one side (such as the music and movie industries), and technologists and consumer activists on the other. Although Karp’s advice rings true, he clearly describes the issues surrounding digital copyright and digital rights management (DRM) from the point of view of the technologist/consumer advocate camp, in direct opposition to the assertions of the content industry.

Karp’s references consist of works by two individuals who are leading advocates for the technology and consumer advocacy community. Bernardo Huberman, director of the Systems Research Center at the Hewlett Packard Laboratories, is the author of a widely publicized study disputing the content industry’s assertion that peer-to-peer downloading has created a system wrought with copyright pirates [1]. Pamela Samuelson, a law professor and legal scholar at the University of California at Berkeley, is described by Phyllis Plitch of the Wall Street Journal, as someone who “has been fighting what she sees as overzealous and innovation-stifling expansion of copyright laws in the high-tech arena” [2].

In Karp’s defense, the content industry, while pointing out visible correlations between plummeting sales of their prepackaged products and a rise in sales of recordable/rewritable CDs, has not demonstrated a convincing cause-and-effect relationship between the two. Furthermore, its efforts to legislate this complex problem using its money and influence has not made the public any more sympathetic to the recent hemorrhaging of revenue [3].

Despite the complexities of business and copyright law surrounding digital rights management, Karp’s elegant ideas reflect a common-sense approach to marketing in the digital age, something the content industry has avoided for some time.

Reviewer:  Jessica Emami Review #: CR127178 (0307-0706)
1) Vance, A. Study: music-swapping users are takers not givers, IDG News Service/San Francisco Bureau, Aug. 21, 2000.
2) Plitch, P. The legal theorist. The Wall Street Journal, May 13, 2002.
3) Cox, B. RIAA was right...the sky is falling. Internetnews.com, Nov. 4, 2002.
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