Media want to be liquid
Leonardo Chiariglione, CEDEO.net

I am afraid some of my listeners will be inclined to give the word “liquid” an interpretation significantly different than the one that will be used in this paper. But it is a not a bad result, for a day dedicated to the study of “convergence”, to help convergence of vocabularies. Then it will be good to see how media liquidity is a necessary condition to achieve the “other” liquidity.

Up to many years ago – about 10 – the business of media responded to well-defined rules. Pushing content through the value chain was costly and the various value-chain players enjoyed multiple opportunities to exploit to their advantage the complexity of the physical layer of analogue technologies gave them to build protective fences around their business.

Today we see a large number of value chains – books, periodicals, music, radio, movies, television, etc. – whose built-up has taken decades if not centuries and there is the most varying assortment of value-chain players that render value chains extremely onerous to manage. Their great advantage, however, was one: once you had complied with the obligation to remunerate the said players you could access without further hassle the content available at the end of the chain.

I agree that I am making a somewhat complicated issue look easy because the devil, as they say in the land of Albion with some competence, is in the details. But in general the statement above is true because the value chains were deployed in areas that were sufficiently wide and homogeneous.

Then – 10 years ago – enter digital technologies. In fairness, at the beginning they did not make all that difference. DVD – a consumer electronics product the great commercial success of which must be acknowledged – is nothing else than an ingenuous use of a new technology to do things as they were done – with different media and technologies – one hundred years ago. Satellite pay TV is instead a slightly perverted use of the new technology to create a new type of fence. Perversion does not pay, though: the pay TV business is flooded with red and sustainability of black, assuming there is one, is open to debate.

Then, a couple of years later, came the end of the world. I mean the end of that world of content variously protected by fences along the value chain I mentioned before. The mass use of digital technologies, the possibility to transmit content in the form of bits on digital networks, using a broad range of distribution protocols, and finally the possibility to have inexpensive or programmable players has kicked off a revolution that has not subsided yet. I will only say two names as emblems of what I mean: MP3 e DivX and I am proud to mention them because they were enabled by two technologies issued from the MPEG group.

Naturally you will not find me ready to condone the looting of intellectual assets that some unscrupulous entrepreneurs have systematically carried out these last few years. But I would like to recall two verses from the singer-composer Fabrizio de André in which he rudely but effectively said

The "flower" we are talking about is the existence proof that there are ways to satisfy the fundamental human desire for “liquid” content, i.e. to be able to find what we want, enjoying it when and where we want and share it with whomever we want. Something, I mean, that the world of yore – the analogue one – has never been able to provide.

Given such extraordinary discovery one would expect that entrepreneurs would flock to find ways to conjugate what should be their motto, i.e. “make your client happy” with what should be their mission, i.e. “maximise your profits”. Unfortunately nothing is further from the truth.

Instead we are witnessing three obstinacies. The first is stubborn pursuit of punishment on the part of rights holders for those who have taken liberties with their content, but without any attempt to provide them with an equivalent legitimate version. The second is the stubborn pursuit of the mirage of total control of clients on the part of entrepreneurs – the exact antithesis of what the digital media revolution has shown people want. Lastly, there is the stubborn rejection of DRM (Digital Rights Management) on the part of consumers and civil rights organisations.

The European Commission, that loses no opportunity to remind the Lisbon Agenda 2010 and therefore should be on the forefront pushing for new directions of development, seems to have become instead the relay of the most reactionary vested interests. Behind the façade of "neutrality vis-à-vis standards" hides the defense of a specific business model. I am afraid it will not take long before we will all be sent back to the prehistory of media. I am looking forward to the day when we will look back nostalgically to the freedom enjoyed with analogue media. Let’s resign to a world where nothing will be left to both creators and consumers of media.

I know that in this first decade of the 3rd millennium the prevailing philosophy for entrepreneurs is to have a 95% share in a 1 billion € business and I am ready to concede that this is probably the right approach for those who operate in a market of washing machines and air compressors. But for those who want to operate in the market of media this philosophy will lead to a 95% share in a 1 million € market where there will be red for all those involved. I submit that it is more advisable to target a 5% share in a 1, 10, 100, 1000 billion € market where the contribution of media will stay at just 1 billion €, but will be the yeast that will enable the other 999. I surmise that this is the model that best represents the type of market that media consumers expect.

Are these pipe dreams? Is it possible to achieve total client satisfaction with a profitable business media market? Is it possible to inject in the media business the dynamism that we see unfolding every day with the Web 2.0 label where we do see the inventiveness of smart technologists conjugate with the foresight of clever entrepreneurs?

This is a difficult question and I do not think I will be able to work out a comprehensive answer in the few minutes left. But I can provide two elements for a brief answer. The first concerns the business. The smart entrepreneur has a business model that attracts clients and entices them to come back. The poor entrepreneur loses his time trying to build fences that keep them captive and alienate them.

The second element concerns technology. This must work in support of a strategy of attraction - not imprisonment - vis-à vis clients. Therefore the technology must provide maximum flexibility to manage the life cycle, possibly including protection, of content across the value chain, must be capable of supporting the creation of an infinite number of business models (the so-called Digital Media Business Models) and must allow all those liberties that everybody has traditionally taken with media (the so-called Traditional Rights and Usages).

This technology has a name: “Interoperable DRM” and a paternity: the Digital Media Project, the body that develops its specifications. A first version of these, still of a limited applicability (Portable Devices), has been approved 8 months ago, but the final version will be approved in less than 2 months the day before the opening of 2006 Winter Olympics at Turin. Unfortunately the approval itself will not be done at Turin because the 9th of February the city will be off-limits for those who have no business with snow, but at Castello di San Giuseppe near to Ivrea.

I invite you to look at the future of media with new eyes by going to http://www.dmpf.org/.