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Monday, 19 April 2010

Copyright: It is as Much about Distribution as Contents

Mark McCormack was an American lawyer who created a eponymous sports agency empire, starting with his representation of the legedary golfer, Arnold Palmer, in the 1960s. But he was probably better known to the public for his best-selling book, What They Don't Teach You at Harvard Busines School. I did not go to Harvard Business School, but I have for some time felt that there is an analog to McCormack's book in the copyright world, something like--"What They Didn't Teach Me in the 1970s about Copyright."

What I mean is that, when I studied copyright law, I had only a bare inkling that copyright is as much about distribution as it is about creation. "Idea/expression; originality; authorship" and the like are fascinating issues, and I have enjoyed dealing with them over the years. Still, while Gutenberg and his printing press were always there out in front, it took me a long time to appreciate how detached these considerations of content frequently are in the absence of an appreciation of the means by which they are distributed to the public. At the risk of overstatement, "contents and distribution" are equal parts of a copyright ecosystem.

I thought about this (I really did) when recently reading an article in the February 22 issue of Bloomberg Business Week by Cliff Edwards and Adam Satariano captioned "Electronic Arts under Assault." The caption under the title says it all:
"The leading maker of computer games is struggling as people turn to cheaper online alternatives."
The article describes how EA has struggled with reinventing its business model from selling its physical disc product (so-called "shinkwrapped product") at $60 or so a piece to competing in the online world, where game products are much less expensive.

The response has been a combination of, inter alia, selling lower-priced online games, making some of their traditional products available for free online (earning revenue from selling virtual goods to the game players), developing multiplayer online games, and reworking the classic Sims game for use on social networking sites. All of this, against a backdrop where even the disc product world has seen migration to the second-hand market, estimated to be one-third of all such sales.

The sentence, though, that really grabbed my attention in the article is the following:
"The company has come up with lower-priced games, but users have continued to flock to cheaper or free alternatives from upstart rivals."
If this be true, then it suggests a certain fungibility in the contents of the games that may have been masked in the physical disc world, perhaps with an overlay of the consumer draw of the company's brand to its physical products, but less of a draw to the company's online offferings. Maybe, as well, there is a difference in the user experience, such that the contents created for the physical world don't necessarily translate well in this respect to the online environment.

Whatever the precise set of factors that accounts for these developments, it raises the question of how to understand the relationship between contents and distribution. The traditional book industry provides only a partial answer. There, the rise of the mass market paperback industry did not necessarily cannabilize or materially displace the hardback product, although to some extent the paperback industry did enable certain kinds of book contents to be distributed to the public that were not being sold in the hardback space (what will happen in the era of the e-book is a separate story.)

To the contrary, as described in the article, the game business seems to be witnessing a migration to the online space, where the content requirements may be qualitatively different. Maybe that is not such a surprise. After all, content and distribution are tied together in a way that I only dimly appreciated in my younger days.

What they don't teach you at Harvard Business School here
What they don't teach you at Law School here
What they do teach cats here and here

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