when platforms leak

…When you make something digital and connect it to the web, it becomes available everywhere, it becomes available immediately. That is the essence of the abundance that the web represents. Instant. Everywhere. An extreme nonrival good.

This was not the way business was done in the past: for analog goods, territorial rights and licences were normal and natural; exclusive rights were less common, but nevertheless could be found, acquired, exercised.

As we’ve moved from the physical world to the digital world, incumbents in many industries have sought to preserve the historical structures and ways of doing business. Which, in effect, were attempts to create and exploit artificial scarcities.  When it comes to digital assets, there are four primary ways to try and create artificial scarcity:

1. Sell the rights to digital things on a territorial basis, and then sue those who seek to overcome those territorial barriers. The Karen Murphy case is just the example of the day…. the Bosman ruling in football was a similar case in point; every attempt to enforce gardening leave may also be seen as an attempt to restrict the freedom of the individual.

2. Encrypt the assets regionally, as done with DVDs and some classes of video games. [As I’ve stated so many times before, region coding on a DVD is the best example I know of a technological invention adding zero value to the customer or her experience].

3. Slice releases of digital assets not just over geographies but over time as well, drip-feed the releases into the world, again to protect a historical business model. I reviewed a Hugh Macleod book a couple of days ago, and a UK reader pointed out that the book will not be available here for a few months.  Hugh, the author, saw the comment and confessed that the publishing world seemed to insist on working that way.

4. “Lock” the assets to a particular device, provider, connection type. If you want to watch Premiership football, you must buy from Sky Sports. Or for that matter iTunes and iPod. That kind of thing. Walled gardens.

All these have been attempted. All these have failed, and will continue to fail. You cannot make something that is essentially abundant artificially scarce.

via Why Platforms Leak: The Impact of Artificial Scarcity – confused of calcutta.

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