Analysis

 Last update: 2003/09/08

Things did not work out as expected because the players displayed hybris in at least four major areas: legislative framework, business models, human nature and technology.

1. Legislative framework

Everything related to media requires special care. Any new technology has effects on humans, but new media technologies have an incomparably bigger impact than, say, using electronic computers to make payrolls or control a machine tool. Media go to the root of what it means to be a sentient, reasoning and communicating being - and this is something that is of concern to citizens and Public Authorities.

Historically new media technologies have always created a tension between the old way of accessing and consuming content and the possibilities created by the new technologies, and each age had its own share of new problems. The difference with today, however, is that in the past things moved more slowly, the effect of new technologies took time to be felt, and humans had the time to catch up and adapt to the new situation. This is no longer true with digital technologies: in a matter of months, an unknown phenomenon can sweep the world. Humans are not (yet) equipped to deal with changes of such an intensity.

Little was done to get ready for the time Digital Media would be deployed. What was done had more the purpose of creating fences against a fearful unknown than preparing for the opportunities of the future. A posteriori one can see that the threats materialised in unexpected ways. Nothing has been done to create the rules for the new digital media space. Every day we see a new event of a never-ending warfare waged in tribunals where rules are set that should have been agreed upon long time ago after mature deliberation, and in very different environments.

For as long as there will be no clear rules, every player is bound to suffer more disillusions.

2. Business models

Any intermediation business must be based on sound business models in which the middleman is remunerated because his role is justified and appreciated by those he serves. This is a truism but too many players have neglected it, as can be seen from trying to answer the following questions:

• How can people think that several multiprogram offers could exist on a given market, even a large and homogeneous one like the USA, with the cost basis of today's satellite pay TV?
• How can terrestrial broadcasters think of keeping a sustainable business by going digital on the digitised terrestrial network, when production costs increase, revenues are constant, the type of offer is the same as before and there are other less expensive delivery channels?
• How can telcos think that the business of carrying content over a network upgraded at high costs can be sustained when satellite pay TV does not, while not even requiring a "physical" network?
• How can investors think that the paradigm of today's web of freely-available content would carry over unchanged to digital media, thereby requiring high-capacity long-distance links to move huge masses of media content from any point on the globe to any other point on the globe?
• How can people think of building a sustainable business of digital media delivery over the Internet as long as there are few paying customers valuable content can be released to ?

The freedom to succeed or fail with new business ideas is a fundamental right of humans and business decisions should stay in the hands of individual players. But we are all in trouble if too many business decisions turn out to be poorly conceived, especially if all of them are.

3. Human nature

In the end there are things that work because humans like them and there are others that do not because, no matter how much you push them, humans are unmoved. For a long time the media intermediation business was based on the fact that media were scarce and people endured scarcity because they understood that the system could not provide abundance. Then, already in analogue times, scarcity progressively gave way to abundance. Today, with Digital Media, scarcity no longer makes sense and is not understood by end users.

Today, walled gardens and monopolies are two main means of inducing scarcity of digital media so as to perpetuate old business models. The former is not going to work, because people have the comparison of the freedom to access a vast amount of written knowledge on the web. The second entails high dangers for democracy and could ultimately lead to mass rejection.

We can learn about human nature by studying how end users have traditionally dealt with media using devices based on open specifications that anybody could build and that users could buy in the shops. Indeed, successful instances of digital media today - DVD, MP3 - are all based on this paradigm. This does not mean that this will be the only valid model perpetually, but iit is certainly hybris to try to force people to adopt hostile paradigms and then complain that things do not work as expected.

4. All technologies must be there

If it is true that technologies do not a business make, it is also true that in the Digital Media space a business without technologies is hard to conceive. Even though the main reasons for the lack of success so far of the Digital Media Revolution lie outside of the technology space, the role of technology in delivering the promises is crucial. In many cases the new forms of intermediation that can be established thanks to Digital Media Technologies require that all technology components must be in place. Market does not forgive those who neglect a key technology or try to make up for it with a proprietary one and indeed it is complete hybris to go ahead with the deployment of a new service when a major technology component is missing.

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There are more areas for which an analysis can be made, but the four areas considered should already trigger enough discussions.

Ultimately the purpose of the Digital Media manifesto is to come up with proposed corrective actions.

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