Thinking about the purpose of digital media distributors

According to Peter F. Drucker the only purpose of a business is to create a customer - not to make profit, not to sell something, but to satisfying original needs of people in alignment with their realities and values. The first step for defining and understanding the purpose of a business is to understand the customer. Who s/he is, what s/he needs and buys.

In most cases there is not THE one customer. In the business of digital media distribution there are at least two:

1) the person, group or organization creating the media
2) the person, group or organization consuming the media

Contemplating about those customers needs, wants and realities bring us closer to the purpose of digital media distribution.

1) So what is it creators want?

Most musicians probably want to write, make and perform music. Hence, they need their incomes from music to pay their rents, enable them to produce new songs and albums, and to allow them to save some money for the time they will retire. Software-developers probably want to architect, program and sell software. Of course just like musicians they need their development and sales activities to cover their costs and to provide enough money for a decent living. This is basically the same with any person who professionally creates digital content. The want is to create that product and the need is to be able to make a living out of the return of making the product available to others.
The realities digital content creators are facing do not look that bright. Musicians have to sign tough contracts with record lables for producing their albums and songs. If someone benefits of those contracts it is usually the record company and not the creator (read this). On top of this do downloads leave musicians with considerably less revenue than physical sales. The reality is, though, that their fans increasingly ask for digital copies, as they are simply more practical. Of course there are and will always be people buying CDs and vinyl-records but the numbers are declining dramatically. There are still people riding horse-back or carriage, too. But most of us probably use the train or car for transportation. And the same reality are facing other digital content creators. Partially they have extremely high development and production costs - even though they do not perceive those as costs, as for open source developers, for instance, who develope the software in their free-time. And their revenue models either do not even exist, or are seriously threatened by the information age.

To summarize: Creators want to create and they need their creations to feed them and their families.
To point out:
Creators do not want their IPs to get tightened or sue anybody for abusing them. IPs are a means to an end and not a means in itself. Their realities just do not seem to leave them with another option.

2) And what is it consumer want?

Obviously they want to satisfy some need they have by consuming the content. This could be the need for entertainment in terms of music, games, movies or fiction, the need for education in terms of non-fiction, some software and movies or a solution to a specific problem they have. This need could also be to get some resources for generating something news themselves, e.g. a digital mash-up. Mash-ups exist in music, software as well as video format and thus encompass just any digital media. It seems like the customers’ needs covered by digital content are highly diversified. Their wants might become more transparent if we look at their realities.
The reality of digital content consumers is the reality of the so called Generation Y aka Millenials, Echo Boomer or Generation Next. According to Rion Zemke, Claire Raines and Bob Filipczak “They combine the teamwork ethic of the Boomers with the can-do attitude of the Veterans and the technological savvy of the Xers. At first glance, and even at second glance, Generation Next may be the ideal workforce - and ideal citizens.” In the U.S. 97% of them have their own computer and downloaded content via P2P (49% do so regularly). 66,6% of all college students are connected through Facebook. According a recently published report by the British Music Rights Organisation “the acts of copying, sharing and recommendation have acquired a much greater value in their own right – a value from which consumer electronic and other digital businesses can derive significant revenues, but that music companies presently find difficult to monetise.”
Today, the music industry is the industry that currently feels the shifts of changing demands of the Generation Y the most - tomorrow it will be the first and other industries will follow. Assuming that consumers swap and share digital content because they are evil pirates only pursuing their own benefits would be extremely short-sighted and simply wrong. On the contrary. Generation Y consumers feel emotionally extremely close connected to their idols and heros and this not at least due to the high interactivity the new media allows. Media always was a means for self-identification and self-representation and still is. The activity of swapping, recommending and sharing is merely today’s way of satisfying those needs. Throughout the 60s, 70s, 80s and 90s one would have lent ones favourite CDs or records to friends or would have even created a mix-tape for them. At that time no record company would have probably sued those kids. Now people share digital content, and they do so more often and intense than before and above that across physical boarders. With that they threaten existing industries and get sued.

To summarize: Buyers want digital products to satisfy various needs from entertainment, over education to self-representation and self-identification.
To point out: They do not intent to harm creators, their idols or heros. The simply utilize available technology to best satisfy their needs.

If the purpose of a business is to create a customer and the wants of potential customers of the digital distributrion industry are the ones described above, what should the digital distribution business be?

It’s obvious! It’s NOT to tighten IP laws for creating an environment that forces customers, both creators as well as consumers, to adhere to rules that mainly satisfy the own industries needs. It’s to create business models that serve exactly the needs, wants and values of creators and consumers outlined above.

This is our, SellYourRights’, purpose:
To provide a distribution model of digital media that gives creators the freedom to create, experiment and produce in which way ever and ensures their appropriate compensation when making their products publicly available; as much as to enable comsumers of digital media to freely satisfy their needs of entertainment, education, self-representation and self-identification.

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