“It is our illusions that create the world.”
— Didier Cauwelaert
I want to put a new twist on the whole DRM
issue related to the music and movie industries. For the sake of simplicity,
I’m going to use the term “mm-industry” to refer to both
of these industries. In this column, I’m going to maintain that much of what
the mm-industry is worried about is an illusion, and I’ll
propose that Steve Jobs and every Apple employee knows it.
In order to put the mm-industry’s illusion into perspective, no pun intended,
I need to tell you a story about skiing. Surprisingly, skiing applies in several ways
here and clarifies the illusion.
A Ski Illusion
I have been skiing for a long time. I learned to ski at Steamboat
Springs Ski Resort in Colorado in December 1986 and have skied
every season since, so I can say that I know something about the
sport.
So here’s the illusion. Each time I ride the lift, I see a different set of skiers.
Occasionally, I’ll see someone I saw on the last ride because
they took the same route. By and large, however, the people
I see are constantly changing, and the overall view doesn’t
change very much throughout the day.
The illusion, however, is that any one person is out there
all day. That’s just not true. Some people arrive early and
quit early. Some arrive late and ski until the lifts close.
At any given time, some are in the lodge having hot cocoa.
And so what appears to be an endless succession of people who ski all
day is really just a slice in time. No single paying skier, except for a very
few fanatics, skis from opening to close.
But it appears that way because those of us up on the lift chairs
always see people on the slopes below no matter when we look.
Stop and think about that for a second.
It’s an interesting illusion, and I think it’s applicable to the
mm-industry.
The Music Industry’s Grand Illusion
Executives in the music and movie business who
bother themselves with observing the millions of customers out
here are like the skier on the lift chair. The Internet,
what they read, and the reports provided to them aggregate to the
point where the behavior of millions as a group (like the crowds I see
on the slopes) is ascribed to each and every customer (the one
person I see for a fleeting moment each day.)
It’s an easy mistake to make.
The result of the mistaken illusion is that entertainment
executives believe that every person in the group of customers has the
time and inclination to engage in behavior attributed to
the group as a whole. It would be like me hoping that
a pretty blonde skier will decide to catch lunch at the
same restaurant on the mountain, at the same time as I do.
Both are unrealistic fantasies.
All of Apple’s employees understand this illusion. It’s precisely
because every Apple employee works so hard. I don’t mean to say
that there’s anything special about Apple employees — they’re
just like the rest of us. And that’s the point. Everyone is working
hard these days.
When you look around and diagnose your own lifestyle and that
of your friends, you’ll find that most people remain fairly
busy during the day, often work late, bring work home, and
have significant obligations in the evening. There is
precious little time to engage in extended periods of
behavior that is ascribed to the music customer as a group.
For example, and this is hardly a complete list: working on that novel,
picking up kids from day care, grocery shopping, soccer practice,
after school events, tennis club, eating out, karate practice, church
services or choir practice, homework, company softball league, PTA
meetings, mowing the lawn, paying bills, making dinner, reading, playing
with the kids, getting them ready for bed — which takes hours —
and collapsing into the living room couch to catch the last
45 minutes of Lost.
However, the illusion of the music executives is that they’ve
been told about kids who spend all evening downloading music to
their PCs from P2P sites. They’ve been told that CD sales
are down. It’s all true. There are probably a lot
kids at any one time who are stealing music, just like, at any
one time, there are lots of skiers on the mountain.
So let me restate the illusion so that there are no misunderstandings.
Just because one sees thousands of skiers all day long on the slopes doesn’t
mean that any one person is doing a lot of skiing. Just because mm-industry
executives see the results of millions of songs
being pirated doesn’t mean that any one person is doing much of it.
Building a Better Business Model
Apple’s employees
know that life is too short to mess around with a clumsy, awkward
cell phone. Hence the iPhone. Life is also too short to spend an entire evening in
front of a computer. (Unless one is a writer!) And Apple employees know
that their customers, just like them, are engaged in a myriad number of things
all through the day. That’s the whole point of what Apple does:
make life simpler and better so that the rest of us can be more creative instead
of frustrated. Few adults have the time to engage in the (illusion of) piracy that
the mm-industry believes they do. If they did, sales of music
CDs in the stores wouldn’t be down 10%, they would be plummeting
towards zero. If they did, Wal-Mart wouldn’t be making mega-bucks selling movies
on DVDs.
We’ve been down this road before. We know that P2P file sharing
software is often loaded with malware that will destroy a PC.
We know that taking the time to set up a home computer to steal
music and hoard vast libraries of music is an endeavor engaged
in by only a small percentage of nut cases. Apple has already shown that most people
are willing to pay an honest price for a good download experience
and a good quality song. However, the mm-industry doesn’t want to acknowledge
that fact.
I strongly suspect that Mr. Jobs understands this illusion as well,
and that’s why he feels that DRM is an idea whose time has come and gone.
On the other hand, the illusion I’ve described makes it all too
easy for mm-industry executives to believe that we all concern ourselves about stealing
content all the time when, frankly, we don’t.
They worry that anything less than 100% ironclad
protection of songs is going to reduce their revenues. That’s
anathema because revenues must always go up so that Peter can be robbed
to pay Paul. Revenues must go up or they lose their high-paying jobs.
Their illusion makes it all too easy to shift the blame to someone
else.
I read recently that from
the time a new song shows up on the Apple iTunes store until it appears
on a P2P server, with its DRM stripped, like a 1976 Cadillac
up on blocks, is about 180 seconds. Has that kept Apple
from selling 2 billion songs? It has not. Will that keep Apple
from growing as more and more customers come to appreciate
the benefit of an iPod and the iTunes Store? Not likely.
Overcoming Fear
Back to skiing.
In skiing, there is a certain fear that beginners experience. That’s due to
the physics of the skis. If a beginner leans up the hill in a
turn, defensively, the downhill edge of the ski loses its grip on
the snow and they fall. The skier must lean down hill, in a
particular way, in order to have the downhill edge of the ski
bite into the snow and provide stability. That’s a scary thing
to do at first.
By resisting the fall through fear, the skier falls. It can take
years for skiers to overcome this fear and learn to move their
bodies in the correct way.
The mm-industry has the beginner’s fear that all of their
customers have the time to think about robbing them.
Quite to the contrary, those customers are thinking about lots of other
things. They’re thinking about loved ones in Afghanistan and
Iraq. They’re thinking about keeping their kids safe. They’re
thinking about how to care for aging parents. They’re thinking
about a nasty boss or a friend in need at work. They’re
thinking about how they’re going to pay for health insurance if
they get laid off.
While most customers desperately seek the peace and quiet
to enjoy purchased content, it’s true, many young people
are grabbing free content. Despite that, industry research has shown that as
young people grow older, they give up a lot of things:
video games, music piracy, one-upmanship, binge drinking and all those
indiscretions of youth. It’s a lesson that must be learned
each generation. Adults eventually learn that increased income affords
a practical tradeoff, when free time is short, to engage in simple
pleasures. They’re willing to pay for those pleasures, assuming
that they have a good experience.
To this end, Apple has made our life better. Everyone who works at Apple,
working late into the evening, knows that they’re trying to make
life better for their customers.
Looking at music in particular as I close, what are the RIAA and
the music labels trying to achieve? Customer loyalty? A great
experience? In fact, they drag people into court, have hissy fits
when kids do the things they naturally do, and act as if
they are the most important part of their customers’
lives. Here’s the deal. They’re not.
Regrettably, the music industry
is in the deepest grip of illusion and fear. As a result,
they’ll never earn the trust and respect that Apple has.
Consider this. There are lots and lots of companies and products
scratching and clawing for our attention. The day may come when
a desktop computer won’t just play music, it will create music,
music to our liking, heuristically learned
from each person’s own tastes. The entire music industry
could go the way of the typewriter, slide rule, drugstore soda fountain,
drive-in movie theater and doctor house call.
If music isn’t the best part of our lives from companies we
love to do business with, we’ll turn towards all those other things that will
emerge this century to amuse us.
That is, when we have the spare time.
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
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