THE BROADBAND PARADOX

This is a good idea:
The impractical method for stimulating broadband adoption is to make music free on the Internet. As Thierer notes, Napster and its cognates have been among the main reasons people buy broadband connectivity. Instead of using the law to choke file swapping, perhaps we should encourage the telecom industry to buy off the music studios. Total recorded music sales in the US come to a grand total of about $15 billion per year, while
telecom spending is over 20 times higher. Thus in the abstract, it might be a wise investment for the phone companies to buy out the studios. This is of course wildly impractical for business and legal reasons, but it would quickly stimulate demand for broadband. (It would also demonstrate that the content tail should not be wagging the telecom dog, as it too often does in political, legal, and business discussions.)

From http://www.dtc.umn.edu/~odlyzko/misc/thierer-broadband-paradox

This is a somewhat naive and highly academic solution that would require a lot more coordination than is likely possible, but it brings up an important point about the relative scales of the music and telecom industries. It also underscores a core problem with the internet (and, I believe, some part of the internet crash) – that good digital content is simply not available online. There are two reasons for this: the lack of a good DRM system and the lack of public acceptance of paying for bits with no physical manifestation of the content.

What’s interesting is that there is an important psychic tug of war going on between what people think they are buying and what companies want to sell. With a CD, the record company wants to sell a temporary copy. They effectively do so by changing the format every 20-40 years (72, LP, 8 track, cassette, CD). On the other hand, consumers want something permanent or at least the sense that it’s permanent. I think that this gap will plague the development of digital media vending mechanisms until the consumer has the sense that the copy they are getting is accessible indefinitely and that they will be able to move it to another medium. Record companies have a tough time with this idea.

I also suspect that going forward, music may share some characteristics with long distance telephone service: as it gets cheaper we spend more on it by consuming a disproportionately larger amount. My telecom bill is higher than it’s ever been despite the steady decline in prices because I never think about the cost of a long distance call anymore.

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