A Gerd Leonhard slide illustrating the above:

So, if the above p2p law is true, what does this say about ‘business models’?

I think the following meditation by Neil Perkin, turning towards a service model that adds value to the original artistic content, points in the right direction.

“If old media was about ‘blockbusters’, then new media is about ‘snowballs’.

In the Blockbuster world, says Ian (and Umair), there’s a point where investing more in quality delivers diminishing returns and marketing delivers the audience:

“If you are making Pirates of the Carribean 12, do you spend $2M extra dollars on that actress or on getting Johnny Depp’s face on the cups at Burger King? Burger King, of course, you’re not trying to make the best movie in the world, you’re just trying to get people to go to theatre A instead of theatre B this week”

In the Snowball world however the opposite is the case – there’s a point at which you get diminishing returns from spending more on marketing, especially when attention is the scarcity, but quality is “hyper-efficient”. If something is good enough, people will see it.

The relevance of all this to making money from content is right there in that balance between ubiquity and scarcity. Quality and relevance have never been more important – as Ian says: “Our jobs are still the same…making stuff people love”. Making content ubiqitous – making it easy to find, scalable, portable – enables it to be spreadable (as opposed to ‘viral’) and act as cultural material for people’s own conversations. The sweet spot is where content meets context.

Ubiquity gives you the platform from which you can create a new kind scarcity, and creating scarcity is important because when something is scarce it has value. Ian talks about the ‘digital packaging’ of music. Scott Karp talks about how media owners need to be experimenting with new ways of packaging content:

“An individual content item on the web, without a package, has marginal value approaching zero – and attempting to charge for an individual item of content is unlikely to change that. What you CAN charge for is the package.”

This is not about applying print subscription models to digital content. It’s likely not putting up pay-walls around existing content either (at least not without adding other value of some kind). Its a new kind of scarcity. The kind that adds value, rather than subtracting it. The kind that is more enabling than it is restricting. What I’m talking about is turning content into a service. About how you apply producer expertise in new ways. About making content useful as well as entertaining. If it is of sufficient value, people will pay for it.

As Gareth has pointed out before, culture is what we all compete with for people’s time. Which is partly why, I suspect, a lot of focus is going on trying to crack THE model, or THE idea that will change the world. But to quote Clay Shirky “Culture is a huge thing to be worried about…there’s only one thing that you can posit as almost universal: Start small and experiment from there…you can affect culture in a small way”. What Mark calls ‘lighting lots of fires’. One thing’s for sure though – it ain’t nothing without the platform.”