20090208

Industry Rant : "The Information Economy"

Lots of people think they know lots of things. In my experience they know half as much as they'd expect, and expect they know about twice as much as you'd guess of them during a conversation. Well, I'm not one to judge but I've had this conversation with too many people who don't know what they're talking about when it comes to media. Essentially they the argument is that the models of digital downloads will replace retail and in many cases, the need for retail and manufacturing altogether.

Here's why that's not going to happen for at least a decade, if at all.

First, people aren't taking into account quality. Anyone who knows anything about data knows that the highest file sizes in media come from two places: sound and moving image. With audio, compression can save you a good amount of space at the expense of quality, but hi-quality audio gets pretty massive. And in first place of course is video. Moving pictures, even at a compressed rate, become absolutely astronomical very quickly. Codecs (compression/decompression algorithms) aren't going to save you that much space when you're talking about delivery of quality assets- 1080p HD video with 5.1 or 7.1 surround is what people want to fucking watch, alright? Hell, they expect it. And when you talk about digital media downloads, of films and such, you're not only talking about taxing storage solutions, but you're also talking about dealing with the [unnecessary] bandwidth caps of most American ISPs.

Second, people are forgetting ownership. If you buy a film digitally, it's sitting on a hard drive. If you buy a film in stores, it's palpable. It's on your shelf. It's unique in that it is your copy of something. It's a tangible purchase. Whether or not you think this is a good thing, you can't ignore the fact that having a tangible collection will always be more reliable, accessible, and collectible than digital media. Or, in some cases, some studios are bright enough to include a lower-res copy of the film for ipods/itunes on the disc(s) as well.

Third, Look at Apple TV. This is essentially the same thing you're talking about. So far it's been a dud in the Apple lineup. This comes back to quality. Why buy a movie if it's going to be 640X480 resolution? And still push 300-600 megs a film! Storage is getting cheaper, but that doesn't make these look any better when you full-screen the thing. Sure, they'll play on an ipod but nobody crowds around the ipod to take in a good flick.

People expect some kind of information revolution to whisk away the need for stores and hard copies of things on disc, but they don't realize that what they're talking about would be another product to replace a computer or DVR that essentially does the same thing in one concentrated place. (Another box on the shelf that does stuff? Good luck, Marketing.) I just need something that plays movies, man. Console movie downloads, iTunes movie downloads and rentals, instant viewing on Netflix- these things are a step in the direction for the so-called 'information economy' taking over media distribution. But completely replaceing cold, hard hi-quality media is pretty far away for those three reasons above and more.

To be fair, the people I talk to about this don't work in, on, or with this media. They're actors, journalists, writers. They'be never had to allot hard disk space for HD renders or spend hours tweaking compression for download and then cringing at the inevitable picture/sound degradation. They also don't realize that for the last 10 years, DVD sales have been 46% or more of the revenue stream for the major studios. For a good reason. Reliable, good picture quality, disc-based, attractive replacement for VHS, simple to use.

I could be proven wrong. Someone could blow Apple's h.264 codec out of the water and combine it with a solid-state storage solution with a low-cost fixed-rate fiber optic delivery system and a sleek, fast UI that puts every movie ever at people's fingertips. But if the quality isn't top-notch it won't go anywhere and lots of investors will lose lots of money on phantomware.

I was just writing a post to those people and those who agree with them blindly, saying, basically, it's like flying cars. Don't hold your breath.

A self-indulgent post? Maybe. But media is in the half of what I think I know that I do actually know. I think.

7 comments:

Üdo Ümami said...
This comment has been removed by the author.
Üdo Ümami said...

yes. yes. these vintage digital keepsakes...agreed. in the end it's all much like books, eh? the book- another ancient ass object- which is still yet to be replaced... despite the availability of online readership. hell we build cappuccino-perking-stuffed-animal-selling- shrines to them... books. hey, kindle my azz the books aint goin no where fast and neither is the retail blue ray nor it's 42-year-old- cougar-sister-in-law... the dvd. <3 Üdo

Jackhalfaprayer said...

Very apt piece by the ONN:

http://www.theonion.com/content/video/sony_releases_new_stupid_piece_of

Books are a fantastic analogy. But some people liken the situation to newspapers or print magazines- which do look like they're on the way out. I think that's misguided.

lbillings said...

This is a juicy fruit to squeeze, and not much space in the "comment" glass to put it in, but I'll give it a try. For what it's worth, I'll preface by saying I'm one of those starry-eyed journalists. I'll also preface by saying that the seemingly wondrous Utopian vision of near-ubiquitous computing, fabrication, and information access may in fact be a cheaper and easier world to create and live in than a world in which people continue to value ownership over access.

The information economy is already here, so its strange to argue that it's not going to happen. You can already download all manner of products via their 1's and 0's through increasingly-fat pipes (the Internet is, after all, an ever-growing, pulsating series of tubes). You can do this not only from the comfort of your own home but from practically anywhere on Earth (barring the polar regions due to the current dearth of communications satellites in polar orbit). It is entirely reasonable to assume this trend of accessibility will grow along with our increasing technological capabilities (i.e., data storage and transmission), unless of course some cataclysm occurs and all our high technologies simply collapse like a house made not of cards, but transistors and integrated circuits...

Even when we aren't talking data and instead discussing more tangible things like jeans or tables or yachts, brick-and-mortar stores can't make money anymore; they're closing in droves. Online-only retailers are feasting on their corpses.

What I do agree with, is that a more "advanced" information economy, where actual objects like jeans, tables, and yachts are "shipped" via digital blueprints to be "manufactured" locally, is some ways off, certainly more than a decade. But unlike cold fusion or a cure for cancer or peace in the Middle East or other things that are always "twenty years away," I believe this will actually occur in a reasonable, near-future time frame.

The reason is that I think the current information economy and the current collapse of our traditional styles of ownership (look at the housing market, for instance) will catalyze new social trends where people will prefer immediate access and convenience over ownership.

Ownership used to mean exactly this -- access and convenience -- but that seems less and less the case today for many material things, whether they are plasma-screen HD TVs or a shelf full of books. There will always of course be the need for other material things, like food, shelter, etc., but as the saying goes, "the things you own end up owning you." In other words, there is a price to be paid beyond currency for having to buy and own tangible physical copies of things, a price paid in time and a price paid in space, an "opportunity cost," and I feel that smaller and smaller sections of the general populace will be compelled to pay that price in coming years. This, along with technological innovation, is what will drive the push toward a greater "information economy."

For what it's worth, I'd rather not speculate as to whether this is "better" than the previous status quo; I don't necessarily think it is. The value of tangible real physical objects over 1's and 0's is that they endure. The clay cuneiform tablets from ancient Sumeria still exist today to tell us about this long-dead culture. I am not so certain any of our electron-based ephemera will be around to tell much to our ancestors 300 years from now, let alone 3,000.

I should also say that these ideas are not my own. Here's a link to a decently short essay by Kevin Kelly about this:

http://www.kk.org/thetechnium/archives/2009/01/better_than_own.php

And here is a relevant excerpt from a recent screed by Bruce Sterling, to "play us out:"

"You need to re-think your relationship to material possessions in terms of things that occupy your time. The things that are physically closest to you. Time and space.

"In earlier, less technically advanced eras, this approach would have been far-fetched. Material goods were inherently difficult to produce, find, and ship. They were rare and precious. They were closely associated with social prestige. Without important material signifiers such as wedding china, family silver, portraits, a coach-house, a trousseau and so forth, you were advertising your lack of substance to your neighbors. If you failed to surround yourself with a thick material barrier, you were inviting social abuse and possible police suspicion. So it made pragmatic sense to cling to heirlooms, renew all major purchases promptly, and visibly keep up with the Joneses.

"That era is dying. It's not only dying, but the assumptions behind that form of material culture are very dangerous. These objects can no longer protect you from want, from humiliation – in fact they are causes of humiliation, as anyone with a McMansion crammed with Chinese-made goods and an unsellable SUV has now learned at great cost.

"Furthermore, many of these objects can damage you personally. The hours you waste stumbling over your piled debris, picking, washing, storing, re-storing, those are hours and spaces that you will never get back in a mortal lifetime. Basically, you have to curate these goods: heat them, cool them, protect them from humidity and vermin. Every moment you devote to them is lost to your children, your friends, your society, yourself.

"It's not bad to own fine things that you like. What you need are things that you GENUINELY like. Things that you cherish, that enhance your existence in the world. The rest is dross."

Full essay here: http://www.viridiandesign.org/

Jackhalfaprayer said...

Starry-eyed indeed. I'll take this step-by-step, journalist.

1) "value ownership over access." This statement is meaningless in the face of what I'd written previously. The only "value" that is relevant to this discussion has to do with "economy," which seems to be the half of the catchphrase 'information economy" you insist on ignoring. Value I discuss the income- where the flow of money comes from in the market and for what services. Besides, doesn't everyone have access to ownership? Isn't buying a digital song ownership?

2) Did you just TL;DR my entire post? I know the information economy is already here. I wrote about it. Perhaps you should take the time to read full thoughts instead of speed-reading for key words. My semantic choices are not only clear, they are actually BOLD and ITALICIZED. The argument is that the current models of digital downloading will replace high-quality hard media with x-quality soft media. The argument has nothing to do with the information economy itself outside of this.

I also mention how it is already here with netflix,itunes,console downloads of features and games, etc. Again, I ask why you even bring this up if you'd even read my entire post and taken in the meanings of the words and the implications held within. I hope you are more careful when researching for a story. ...You totally deserved that.

3) Online retail doesn't deal in information as much as your argument suggests, and this has nothing to do with the Film and New Media Markets. It still involves warehouses full of tangible stock. The only change here that has something to do with the information economy is the flow of information and money, which neglects the fact that manufacturing, storage, admininstrative, conceptual facets remain unchanged- simply because retail owners have been reduced to middlemen by information transit doesn't mean that the market has been revolutionized. I'm not negating what you say about online retailers, I'm saying it has nothing to do with the market that I'm discussing. 3-D faxing replication data has even less to do with what I'm talking about. It is, however, a very cool thing to discuss, particularly in how useful such a thing actually is. Personally I think people will find it more useful for sending precision prototype models than actual distribution. Important: Tangible goods differ from Film and New Media in business model, execution, and distribution.

It seems you're so enamoured with the information part you're neglecting the econ part.

4) I do not argue that the information economy isn't here, and certainly not that it isn't coming. I think it has done/will do wonders. What you are missing is that it isn't going to arrive for a decade or decades in any full replacement-prone force of distribution for motion pictures without the miracle box that I describe near the end of my post. And this box isn't going to arrive anytime soon because of several separate things needing to go right: miracle codec, high-speed bandwidth options, hi-capacity solid-state/like storage solution, distribution deal with all major studios, and lots of investment capital, among other things.

5) "the current information economy and the current collapse of our traditional styles of ownership (look at the housing market, for instance) will catalyze new social trends where people will prefer immediate access and convenience over ownership" I have many problems with this statement. First off, you already see this with the digital music "revolution." The idea of ownership remains- when you by a film or a piece of music, you aren't buying just the hard or soft copy- you're buying the RIGHTS to play this piece of film or music for yourself and others. The film and music are intellectual property. I suppose the irony of this is that film and music have always been an information economy. What's changing here is neither the information nor the economy- what's changing is the distribution model. Ownership of tangibles vs. ownership of digitals? Is there a difference? You still need a medium to use the product, and that's another product.

Finally, I will read these articles and return to this discussion, but you are, so far, missing my points entirely in order to put forward your own ideas, which, well explained as they are, have nothing to do with what I'm talking about and fail to make a reasonable argument that digital distribution is a viable option for the feature film market as THE MAIN SOURCE OF REVENUE.

Also, using the "things you own end up owning you" argument is hypocritical, cliche, and very condescending. If I own something I pretty much guarantee you it's because I'm in love with it and would do without it only if I needed mobility. This includes all my game systems, many of which I enjoy playing more than you know.

Jackhalfaprayer said...

Here's my final thoughts from your articles.


From the Sterling quote-

"Furthermore, many of these objects can damage you personally. The hours you waste stumbling over your piled debris, picking, washing, storing, re-storing, those are hours and spaces that you will never get back in a mortal lifetime."

Welcome to real life. Even monks have to wash shit. The difference is, they're mindful when they do it. They're mindful when they place it, so they don't trip over it. He's giving material too much weight by default. People are the ones wasting time, not stuff. Monks wash clothes and care after possessions with mindful souls. They don't suffer because they are disciplined. They understand their actions and follow through with what is required with grace.

I would go on with this article but I don't have time.

The Kevin Kelley article:

Ok, first his definition of ownership is unacceptable. Using roads and the internet isn't a good analogy to then say that the lines of ownership are blurring. Roads are paid for and maintained with tax dollars. Internet is a service that is paid for and in turn employs a whole army of people to maintain a working infrastructure. There is a whole economy working behind the scenes that he isn't talking about that is directly responsible for exactly why he gets to use these things but not own them. SO he's talking about ownership as access from the outset and then not even bothering to distinguish between the two? I dunno, perhaps I missed something.

Honestly, is it philosophically any worse to enjoy/need/want/require ownership of some[thing] than it is to say "one day I'll have access to EVERYTHING I'VE EVER WANTED EVER!!!" This 'orgy of access' (my term) seems far more excessive and undisciplined than spending carefully budgeted amounts on specific things you actually enjoy or *gasp!* might NEED one day.

"No responsibility of care, backing up, sorting, cataloging, cleaning, or storage." Exactly- no responsibility, no care for the thing, no respect for the utility of it, no craftsmanship in the making of it. It's lazy and excessive. I'd go so far as to call it unecessary- at least for the average citizen. Perhaps maintenance serves a purpose in the acquisition and continued use of something. Like cleaning a nice carpet or buffing a well-crafted mug. You care for it not because it is yours, but because it exists.

This middle-late section is abominable. No evidence, poor use of stats, too much conjecture. Impractical ideas for an economy fueled by money. Meaningless and naive ideas of "sharing" and "trade" in a capitalist economy with no explanation as to how the change would take place or even why. He's literally making shit up about shared cars and "short-term use," based on what would appear to be personal hunches. I guess he never heard of Zip cars or movie rentals. But then, you have to pay industries money for those.

The status of "stuff"- creation and selling of stuff, is interesting to hear about, but what does he say about it? Nothing that calls to action anything that refutes the capitalist economy. Our entire country, if not the entire world, has been unarguably convinced that consumer goods are another means of self-expression. The individual as a consumer is absolute. The individual's need to express his or herself through the purchase of certain items is indisputable- because not all citizens have creative expressions as outlets. To overturn this would take catastrophic change. I recommend, again, heartily, The Century of the Self by Adam Curtis. It's free to watch on google video thanks to the BBC. Also thanks to the information economy.

Access vs. ownership is an interesting argument, but I find myself just not convinced of any sea change because even in the future access will still require ownership. You still have to own an iPhone, buy apps, and pay for service to have a little you in your pocket. I'm not so naive as to ignore the fact that KK admits in his first few statements- he'll have to pay to get access - the orgy of said access. If that's the case, what's the argument again? Replace tangible property with monthly service fee and the only difference is the method - the system of distribution. And the distribution doesn't change the market. The market changes the distribution.

Look, I like "less is more." I want less stuff weighing me down in life. I think we can be more efficient as a people if calm down and really evaluate what it is that we actually need to live. But the simple fact remains that tech and distribution simply aren't up to the task of providing films at reasonable quality with any expediency or unified market share that comes anywhere close to dislodging hard, tangible media.

The only thing this KK article does is make a very convincing case for bittorrent as an alternative to spending money on anything ever, and how everyone should be able to share whatever the hell they want. I appreciate some of the viewpoint, just don't make the mistake of feeling entitled to any of it.

I've said for years that information is the most valuable commodity, and I'm not the only one. But as soon as something has a price tag on it, you're in the realm of economics and that's something you really need to research before you start making claims.

Jackhalfaprayer said...

I am not happy to see that a working journalist has shrunken from this argument, tail-'tween-legs, without once giving thought to a damn thing about what he was trying to say.

No wonder print is dying- with minds like these, eh?

/shame.