Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Monday, September 12, 2005

Plasticity, aka The Countdown to Hypercivilization

John Naughton's nice piece about the relative lameness of the ROKR can be summed up in one word: plasticity. Let me explain why plasticity is so important.

Let's think about what's really happening in media. It's not about the digital home (Sorry Economist), etc. All of this stuff is FUD - it will make you totally miss the point.

What's really about to kick off is a huge battle for the next media dominant design. How will Media 2.0 products/services be produced, marketed, distributed, delivered?

Let's start with Naughton's point that plasticity threatens most incumbents' existing models. For example, does Apple wanna sell phones or iPods? Do the MNOs wanna sell music or ringtones? Etc, etc...

Now, let me be honest with you. I've found it almost impossible convince media players about the importance of plasticity, despite almost five solid years of evidence. Everyone's still thinking in terms of locking stuff up with Total DRM, which is just around the corner, thanks mostly to Intel.

Did these guys, like, never hear about i-mode? The point is coordinate the growth of all the players in an ecosystem. The problem with the coming Wintel lockdown world is that it replicates exactly the same industry economics we've got today.

Why is that replication a bad thing? Because those economics lead always and everywhere to things like evil record labels, cheesy movie studios - publishers. It's inevitable that these models emerge in a world of distribution/retail scarcity.

Think about what's happening in the games space. It's blowing itself apart, because publishers are naturally risk-averse: their profit function is optimized by publishing Madden 5,000,000,000 times in a row.

Why? There's basically one reason: Wal-Mart shelf space is too valuable to take any kind of a risk on. No kidding. It's the same across almost all media markets - we've all seen the fallout. Pretty amazing, huh?

So the point is that round 2 of the good ole replication wars are about to begin - except that this time, the prize won't be the music industry - it will be control of the next media ecosystem.

On one side, we'll have a handful of disruptive innovators pushing lightweight, flexible, (and hopefully open) standards like RSS, bittorrent, etc; and a bunch of hungry, relatively resource poor Asian outfits eager to leverage openness to push their hardware standards to global dominance. Their goal will be all the good stuff we've been talking about - plasticity, openness, transparency, peer production, etc.

On the other, we'll have Apple, Wintel, Hollywood, record labels, publishers, Yahoo, Ask/IAC, etc. Their goal is, well, you know - to grab a little bit of the new stuff, the bits that are mildly profitable - but mostly, to not get disrupted. The important thing to note is that the strategic intents of these players used to be in conflict, but now they've converged: to have media industry economics change as little as possible.

Here's a canonical example for you: CNN's Katrina page, full with a brand new 'Citizen Journalist' section. Is CNN seriously enabling peer production here? Of course not - in fact, this entire section is just a glorified email link!!

I emphasized 'as little as possible' that because I think it bears some thinking about. If industry economics don't change, it means that despite a major technological shift, old structures stay the same. Now, assuming these technological shifts make production, distribution, etc, more efficient, like they usually do, what this really means is that huge amounts of value get destroyed.

Of course, this is what consumers know intuitively. It's why [email protected] gets so upset about having to use branded printer ink every other day lately. Cory understands that in the very near future, big media producers will be able to leverage their scale to do very nasty things. Like making sure your hardware goes kaput if you do things they think are suspicious.

So round 2 of the replication wars are gonna be pretty nasty - much nastier than round 1, where the most that ever happened was a few people got sued by the RI/MPAA. That's seriously small beans compared to your monitors locking up for a week everytime you try to play a ripped avi - the average cost of this kind of tactic is staggering.

There are two unknown variables in this equation: Google/Amazon/www incumbents who haven't revealed their hands, and from that angle, the only really game-changing moves I can see happening is the GoogleNet.

The other unknown is device makers, like handset guys. We know Motorola's angle, but what Nokia (etc)? I think they have a golden opportunity here, but the evidence that they can handle strategy decay is thin. Think about the N-Gage: Nokia had a (once in a lifetime) chance to totally disrupt game industry economics: to blow them apart. Instead, they chose the same old tired model, and we know what happened to the N-Gage.

Beyond that, it's almost astoundingly predictable how this is all gonna unfold.

If you wanna get a bit theoretical with me, this is really a battle between two worldviews. One is the old techno hippe vision of decentralized communities and markets doing cool stuff; the other is a centralized, corporatized world where (as Baudrillard said):

"...Advertising has taken over "the moral responsibility for all of society and replace[d] a puritan morality with a hedonistic morality of pure satisfaction, like a new state of nature at the heart of hypercivilization.

...the system of needs is the product of the system of production.... Needs are produced as a force of consumption."

-- umair // 11:18 AM // 1 comments


OK, now if you would only group your posts into categories I could really learn something!

As it is, it takes a lot for me to find your related posts.

Oh well, thanks for sharing!
// Anonymous Anonymous // 10:46 PM
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