My favorite poster on the walls here at Public Knowledge is one called “You’ve Heard This Song Before.” It collects the assorted FUD that has accompanied disruptive media technologies over the years. The death of American music in 1906 at the hands of the Player Piano, FM radio destroying the (shockingly still vibrant at the time in light of the success of the player piano) recorded music industry in 1925, the “assault” on the “economic life” of the movie industry by the VCR in 1982, and the “noose” around the neck of songwriters that would cease the creation of all records that was the recordable cassette tape in 1982.
I like this poster so much because each quote represents someone successfully working in the content industry being completely unable to understand the difference between change, death, and opportunity. They also confuse the difference between the way a market is structured and the way a market must be structured.
Music reproduction machines (such as the player piano) expanded the music market by giving non-musicians a reason to purchase music. That shift paved the way for a recorded music industry. That recorded music industry did not die with FM radio. Instead, FM radio turned into a great way to let people know about new music available to buy. The mix tape had a similar effect. People discovered new music nestled in among old favorites as user-created tapes circulated from friend to friend. In my mind, the MPAA’s opposition to the VCR is the greatest of them all. The entire purpose of the MPAA’s misguided Selectable Output Control petition, as well as every other anti-piracy initiative, is to try and protect the DVD sales that have become the lifeblood of the movie industry.
It looks like it may be time to add TV executives to the poster. In 2002, then CEO of Turner Broadcasting System Jamie Kellner famously equated using a DVR to skip ads with “theft.” This was part of a wave of DVRs will kill TV hysteria.
The fear was that DVRs would damage the current TV distribution model that is based on the assumption that people sit and watch all of the commercials. With no one watching commercials, advertisers would not pay for advertising time and the entire system would self-destruct. While felony interference with a business model is not a reason to outlaw a disruptive technology, the fear did at least have some sort of internally consistent logic.
The problem now is that the assumption underlying the fear – namely that people with DVRs will skip all of the commercials – appears to be overblown. It has been clear for some time that not everyone with a DVR skips commercials. Just as it turned out that just about everyone was too lazy to actually stand up and change a channel before the creation of the remote control, a number of people are just too lazy to lift up the remote to fast forward though commercials. Or they are only half – watching the show while they do something else. Or they are cooking dinner and don’t have a hand to reach for the remote. Or they fell asleep.
Now it turns out that DVRs are actually helping to increase viewership of shows. When people can watch shows on their own schedule they watch more shows. Watching more shows means watching more ads (whatever percentage of ads are actually viewed), which means more money. DVRs actually help companies that make money when people watch their shows. Imagine that – when devices allow consumers to access content the way they want, everyone finds a way to make more money and expand the market (see, for example, iPods, Walkmen, VCRs, FM Radio, Books).
It has also saved shows from cancellation. Head researchers for television networks are starting to call DVRs a “frenemy” of network television, or even going so far as to admit “the DVR is a good thing for network television.” The next time you hear a TV executive talk about the future it may be to praise TiVo, not to bury it.