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Now, <em>That's</em> Entertainment Technology

By: Chris DannenWed Dec 19, 2007 at 11:08 AM
When media and tech collide, the consumer wins. Prepare for a media world of unimaginable freedom and endless choices.

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With the proliferation of Web-based sharing of music, movies and TV shows, entertainment media are spiraling out of corporate control. Flustered by lackluster CD sales and fleeing artists, the Recording Industry Association of America was the first to signal its panic, suing a lone Kazaa user for almost a quarter of a million dollars. The trend the RIAA was reacting against: the proliferation of media created by, and popularized by, the users themselves. As Richard Watson, author of Future Files: A History of the Next 50 years, puts it, "If digital content costs almost zero to create and distribute then anyone can, and will, create and distribute it. In a sense, everyone in the future will be a media owner." If everyone's an owner, doesn't that mean we're all competitors (or even enemies) of the media companies? How will the showdown end?

A look into our own crystal ball reveals some interesting truths: Indeed, entertainment media are becoming democratized – but in most cases, everybody wins. Consumers get cheaper, more portable media, and the corporations producing it will see lower overhead, bigger runaway successes, and less risk. Here's a look at the technologies that are changing entertainment and where they are likely to (peacefully) take us.

Music

There's been plenty of buzz about Digital Rights Management (DRM) technology, but let's get it out in the open: DRM is an anachronism, and its demise is inevitable. The software, which prevents consumers from moving purchased music from computer to computer, has been the main locus of frustration among iPod and iTunes users. But with Steve Jobs' public letter decrying rights protection and now Amazon's DRM-free online music store , the heavyweights have made their positions on DRM known – and outed the record companies as the software's "bad guy" advocates. Since more teenagers are purchasing digital music every year, it's only a matter of time before companies like Apple and Amazon leverage their influence to make rights management a thing of the past.

While DRM is dying, the record labels' headaches have only just begun. Artists like Prince, Radiohead, and Nine Inch Nails have already broken ties with their labels and are now offering their own music directly to consumers, and in many cases they are distributing their product at no cost to consumers (or asking them to name their own price.) By raising capital with private companies and distributing music digitally, they circumvent the autocratic and profit-hogging record companies they once needed to produce and distribute tangible records.

So where are artists getting the capital? One high-profile source is Starbucks, which is touting a new label and a new flagship artist, Paul McCartney, who also recently left his label. The coffee giant has partnered with Apple to offer the Wi-Fi iTunes music store in all of its shops, along with free Internet service to boost the label's exposure. Now there's news that Madonna, Oasis and Jamiroquai are also breaking with their labels, turning to concert promotion companies and other corporate entities for funding. It seems that a growing number of musicians are leveraging their brands to establish "movie star" independence, with which they can avoid production contracts, share in profits, and maintain more creative control.

Producing music without a label is one endeavor, but selling it independently is riskier. More bands may try Radiohead's direct-to-consumer approach, selling downloadable music directly from their Websites, but that will quickly become the province of truly newsworthy artists with a cult following. However the trend develops, it's becoming clear that as physical CDs become an optional medium for buying music, where you buy them (if at all) is equally optional.

Buying music will always exist in some incarnation – Radiohead made $10 million in week of donation-based downloads – but trying music is becoming an increasingly popular way to find new sounds. Take Imeem.com, for example; the site allows users to stream audio of their favorite bands, and share it with friends. Notably, Imeem has recently reached agreements with both Sony/BMG and Warner Music to offer streams of new music from big-name artists on its site. While Imeem doesn't permit downloads, it allows users to figure out if they actually like a song before going somewhere else to buy it. The participation of Sony/BMG and Warner Music also suggests that the media tech boom doesn't have to leave the big companies behind; if they're prescient and flexible enough, they can get in on the action, too.

October 2007

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