Wednesday, April 08, 2009

Google's Eric Schmidt -- You Can't Control Content Over the Internet

Google's CEO, Eric Schmidt, addressed a downtrodden crowd of print media folks yesterday in San Diego at the Newspaper Association of America's annual conference.  I have written frequently about how print media has been pummeled by news -- even their news -- freely available on the Internet.  Schmidt's prescription to the ailing industry?  Innovate!  No real specifics.  Just Do It!

Some of his statements were very profound, however, and with wide-reaching application to all content and the Internet.  In particular, there is no controlling the truth that information wants to be free (as in available without controls) on the Internet.  There is no holding it back.  In his words:

"One of the fundamental problems with the Internet is that it doesn't respect traditional scarcity structures.  It's very hard to hold information back.  The trick is to worry less about controlling the content, and more about making a profit from it."

Read that last statement.  That is profound.  That not only applies to print media.  It applies equally to video over the Internet.  As much as cable companies and others cling on to existing business models and the old notion of "linear TV/TV channels" (and hope to extend that notion via IPTV in the brave new world), ultimately that will not be possible (I have blogged about this frequently in the past few days).  Just ask the music labels.  Don't sue and punish "violators" of the status quo.  Evolve!  Establish new business models.  It ain't easy.  But, it is cold hard reality.

Steve Jobs Impersonates George Bush -- "Read My Lips" -- With Similar Results

When Apple's Steve Jobs announced iTunes years back with much hoopla, he touted what he called the obvious need for simplicity -- simplicity in the service itself, and simplicity in pricing.  "All songs 99 cents!" he cried.  And, he chastised other digital music stores and services for missing this fundamental point. 

Well, that was then, and this is now.  In a "Read My Lips" moment, iTunes' simplicity-in-pricing has been overtaken by the cold hard reality of negotiating licensing deals with the labels.  As of yesterday, iTunes a-bit-more-quietly -- sheepishly? -- introduces 3-tier pricing.  Some songs will sell for $1.29 (most of the new and popular "stuff"); some will sell at $.99; and the forgotten will sell at bargain bin $.69.

Confused?  Or, is this the new simplicity?