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My Aussie friends have an interesting saying that seems part compliment and part benediction: "Good on you." They pronounce it with an accent on the second word so that the phrase becomes a single word in the mouth, more like "goo-don you." At any rate, good on you.

Last week's smackdown of the PIPA and SOPA legislation designed to build a back door to controlling the Internet was both instructive and fun to watch. It showed the power of social media and of regular people coming together to let their voices be heard. As The New York Times reported, it was something of a coming-out party for the technology community both the new corporations and us users. It was amusing to see the Tweets and posts from heretofore sponsors of the legislation that said, just kidding, never mind or I was against it before I was for it ... and the like.

Last week was also a clear power shift from the paradigm of entrenched corporate interests to the commonwealth. How long it lasts is anyone's guess. It didn't hurt that the bad guys in all this were seen as the big media corporations in film and music especially.

Legislation vs. Engineering

I love music and movies and most forms of entertainment, and as a rational economic actor, I want those who produce these things to make a decent profit -- why else would they work so hard? But it says a lot that the industry's preferred method for solving a serious problem like piracy was legislation and not some more typical response like engineering.

If this were the biological world, pirates would be equivalent to invading microorganisms like bacteria and viruses. An organism's typical answer to such an invasion is to mount an immune response. That means building elaborate safeguards like antibodies and strategies to thwart the invaders. The media corporations thought they had a better idea, which was to get someone else to fix the problem for them. They enlisted congress in a vain effort to make Internet companies handle the problem, and you know what happened.

The media companies have always had a business model problem, and last week simply accentuated it. Forever they've been selling a scarce commodity as a product that was nonetheless consumed as a service. They sold recorded media and tickets to shows, and the public accepted it as a more or less fair bargain. This partly explains the record industry's eagerness to bring suits against individuals calibrated in units stolen.

Artists put up with the status quo because it was the only game in town, even though the corporations ran their businesses more like plantations than as entities with any modicum of respect for artists. So in a real sense, the corporations have always been the bad guys.

In those times, packaging was sufficient for media companies to protect their assets, but it is no longer. Strategies beyond packaging have to be built and implemented. What are the solutions? Not my job. You figure it out. Just leave the Internet alone.

What Next?

In 1960, when Frank Sinatra finally completed his studio recording contracts, he started a record company, Reprise Records, owned by Warner Brothers today. If you doubt my labeling of the corporations as bad guys, look up the meaning of "reprise" and you will know everything you need. According to Wikipedia, which was not doing business in English last Wednesday:

Reprise (pronounced rih-PREEZ) was formed in 1960 by Frank Sinatra in order to allow more artistic freedom for his own recordings. Hence, he garnered the nickname "The Chairman of the Board." ... "One of the label's founding principles under Sinatra's leadership was that each artist would have full creative freedom, and at some point complete ownership of their work, including publishing rights.

Publishing rights were a big deal because they were tightly held by the record labels, so Reprise's approach caused an earthquake in the industry. So from the IP ownership perspective, last week's action by some of the biggest names on the Internet was something that several generations could identify with.

But the greater impact is what will inevitably come next. First, the Internet community, aided and abetted by the social media community, has proven that the public can have great impact not only on brands but also on the nation's public life. In doing this, we may have reawakened some civic impulses that have been dormant for several decades as we have narrowly focused on technology as something that only makes life faster and cheaper.

Last week, we rediscovered the commons, a place where people from all walks of life, not just the young, hip and technologically savvy, can meet, empathize and support each other. Everyone in the CRM and social media communities should take pride in this accomplishment because this is where everything started. But we ought not rest on our laurels, because the next challenge is just around the corner.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at denis.pombriant@beagleresearch.com.

