Video Killed the Radio Star

Reading Chris Anderson's article "The Long Tail," I reflected on the song "Video Killed the Radio Star," and how the Internet is poised to someday take over much of brick and mortar. With infinite more choices and an endless capacity to expand, the Internet has become home to the unique pursuits of all individuals media needs. I found most compelling the articles discussion of the economic topics of scarcity, demand, and price in relation to media consumption and distribution. I thought about ways in which technology has progressed, since 2004 when the article was published, and how some of Anderson's points have manifested in the industry.

"Unlimited selection" was perhaps the most compelling theory, betting that, "children today will grow up never knowing the meaning of out of print." His discussion of media pertained to being able to choose any obscure or popular physical good from a digital source. A physical book, could be purchased from Amazon.com, or a DVD, mailed by Netflix. Perhaps one of the largest changes in the industry recently is a tremendous shift toward digital delivery. Amazon now sells a product the "Kindle," which allows users to purchase digital books directly off a wireless enabled device for convenient viewing, for a flat new release price of $9.99. Similarly, since 2004, Netflix has become threatened by service like Vudu, or iTunes movie rentals, that allow instant media gratification, without waiting for a physical product to arrive in the mail. These advances, do not counteract Anderson's point, they in fact enhance it. His point that a shift toward broadband methods of media consumption is apparent, and the economics of the industry have not caught up to the technology, is dead on.

However, content creators are seemingly becoming more comfortable with abandoning brick and mortar economics for digitally received content. Television studios, like ABC and NBC, are embracing new revenue modles, offering streaming shows online free, with limited advertising. The Rhapsody service described in the article, and the new Microsoft Zune system are embracing variable pricing, and all you can eat subscription models. So slowly the economics are changing, and will someday fit Anderson's desire that price be decided, "according to digital costs, not physical ones". One major development has been the shift away from digital rights management software for digital content, marking an evolving industry tact to revisit an often backwards system of content distribution at the corporate level.

Such internal investigation, and the mass proliferation of digital distribution services like iTunes, Zune Marketplace, and Vudu, offering new sources of revenue, put market pressure on the content owners to change. Anderson writes the economic advantages of such services, come from there ability to operate without, "shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees…"

Media owners do not want to risk embracing a model that could potentially damage their business, but as new distribution methods develop and new market tools increase their capacity to deliver improved revenues, I would expect, and probably Anderson too, that a transition to a new economic model accounting for the new realities of the Internet will be adopted. Until then, we must continue to consume our media in what Anderson describes, the "tyranny of physical space."

You're thinking really engagingly about these shifts in the marketplace -- thanks!