Ownership is based on the concept of scarcity – with music, TV and movies available whenever you want, have our media become devalued?

This article is an exclusive excerpt from the author’s book, Over the top: how the internet is (slowly but surely) changing the television industry.

When [music, TV and movies] are available whenever you want them, the idea of consumer ownership seems pointless

One of the most significant changes happening today, something that affects every industry, not just television, is the shifting value of ownership. The idea of ownership is based on the concept of scarcity: if a certain good or service is scarce, it’s of value to own it. But if it’s plentiful, then ownership is of less value. Different cultures place different values on ownership. If you remember your American history, the Native Americans were often confused by the European notion of land ownership, land being open and plentiful on the Great Plains.



So too with music, TV, and movies these days: when they are available whenever and wherever you want them, the idea of consumer ownership seems pointless. This wasn’t always the case however, and a quick look back can help us understand how we got to where we are today.

In 2007, the music industry was still reeling. The conventional wisdom of the day said that two things killed the music business. The first was piracy, in the form of Napster, Limelight, and other services that people used to download entire libraries of music that they could play on their computers and MP3 players. The second was the death of the album, which allegedly came at the hands of Apple.

The belief was that because iTunes let listeners cherry pick the songs they wanted to buy, people stopped buying albums, and because iTunes had a virtual lock on online music, Apple ignored the music industry’s pleas to raise prices on downloads, which would have allowed them to recoup some portion of their shrinking profits.

Many people believed that it wasn’t a question if these twin viruses would infect other industries, but when.

The conventional wisdom of the day also held that people wanted to own media. Owning movies was a habit that VHS and Betamax players helped start back in the 1970s, and people had been buying music for even longer. There was no reason to think that they would not continue to do so. Rental options existed, but their business models were based on the notion of limited supply which served to encourage sales rather than cannibalize them.

It was precisely because of this belief that the notion of digital lockers like UltraViolet took off. The idea was that the digital locker would prevent piracy, as people would not have physical access to all those digital files they owned, and that it would prevent any one company (i.e., Apple) from owning the digital marketplace and fixing prices. (It was widely held that consumers stuck with iPods because their considerable iTunes libraries did not work on other players. A digital locker with files that worked on any device, current or future, would ensure that did not happen again.)

It was a great idea in 2008, but then the market changed in a way that no one had predicted.

Sometime in the period between 2008 and 2012, consumers, or at least a significant number of them, started to accept the notion being promulgated by companies like Netflix and Spotify that they didn’t really need to own music or movies; they were happy to lease them for a monthly subscription fee in exchange for unlimited access to a close-to-unlimited library.

Part of that decision had to do with the superior user experience of the subscription services. Unencumbered by fears of piracy and the need to keep track of individual libraries, they could keep their interfaces free from multiple log-ins and other protect-the-content features that digital lockers and similar services were forced to add.

But mostly it seemed to be a part of a gradual awakening by consumers to the fact that there was no longer a reason to own any sort of media. Storing everything in the cloud eliminated the notion of scarcity. It meant that everything would now be available to everyone. And you could watch or listen to it immediately for one low monthly fee.

We’d never had that before. Media was always scarce. Libraries only had so many copies of a given book. Owning media was the only way to ensure consistent access. But now there was a better way. One that gave you access to the entire spectrum of available content.

That’s how we got here. To a world where consumers would rather pay Netflix $9/month to be able to watch any show they want rather than pay the studio $35 for the right to own a boxed set of Season 2 of a particular series in perpetuity.



The future of media is in that change, in the triumph of convenience over quality, in the idea that there will always be a way to access any type of content at any time on any device. Those are the principles our future systems—and future business models—need to be based on. Consumers may not be aware that they’ve made this decision for us, but they have, and trying to buck that decision makes as much sense as trying to turn back time.

Alan Wolk is a consultant on the business and future of TV, and a senior analyst at TDG. Follow him on Twitter @awolk.

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