First, let’s get one thing straight. Most artists are already starving. So talking about illegal file sharing as if it is going to spawn hoards of starving artists is just plain dumb. Yes, it possibly– that’s possibly— puts into jeopardy the paycheck of a minority of artists who currently get paid (most not too well) by large media conglomerates. I am an author of both fiction and non-fiction. So for me, this is not just an abstract concept.

Second, we have got to stop trying to solve new problems with old tools. I am not going to run my company’s finances using an abacus, nor navigate a boat with a sextant. For centuries what has protected content is the pain-in-the-ass factor. Why don’t I scan in and OCR The DaVinci Code and distribute it? Because it’s a pain in the ass.

All lock-and-key technologies rely on this same pain-in-the-ass concept. Why don’t you undo the lock? Finding the key is a pain in the ass.  DRM is just an electronic lock and key. But here’s the catch in 2007. Hacking into a DRM system to find the key still is a pain in the ass, but once you do find it, distributing it around the internet is cake. For everyone but you, the pain-in-the-ass factor is gone.  And, as Steve Jobs noted in his recent call to abolish DRM, this results in an expensive game of one-upsmanship.

So if we abolish DRM– which I support– how will artists get paid? I see two viable possibilities. First, advertising. When I say this, book people (publishers & agents) look at me as if I am Lord Voldemort. Book people can be so prissy. What on earth is wrong with an ad on the inside pages of a book? Imagine the CPM on The Da Vinci Code! And books aren’t perishable like newspapers or TV shows. Similarly, embed short radio-style ads every X number of songs on an iPod. Let iTunes work on how to enable that instead of the constant DRM battle. But what if I don’t want ads. We have a solution for that.

It’s called the paid cable model. Take You Tube, which is now sharing revenue with its user base. I’m talking about the same idea. If you pay a subscription to your cable company, you can access all kinds of content for free. The cable company shares a portion of the revenue with the site publishers.

We have to admit that DRM just doesn’t work and go on to other things that might.
 

We have a lot to learn from the truly tacky. Take the dancing cowboys from LowerMyBill.com. According to the New York Times, the “two-stepping cowboys, rooftop dancers and weird tattoos, have been hugely successful for company and led to $400 million purchase in 2005 by credit agency Experian”

We need to rise above that kind of trash, right? Umm. Not really. The ads tell you the benefit right up front. Better tacky that works than coy that doesn’t.

“You can’t mean online advertising no better than outdoor?” we in digital media wail. I first heart the comparison between online and outdoor in the mid 90s. CPMs for online, the argument ran, will stay comparable to outdoor because that’s what banner ads are like– billboards. We object. We rail. And yet, people click by web pages like cars exiting the Lincoln Tunnel.

We disdain the dancing cowboys and jeopardize our own futures.

Take Symantec. I hit a Symantec interstitial every day on the New York Times site. These ads expect me to stop, actually read, and engage with them. Oh, and there is an animation, that has to load and then do its thing. Are you kidding? When I’m trying to get to my article? You want me to stop and notice—better give me a dancing cowboy.
 

  
The current level of online advertising puts publishers at risk. Headlines are screaming the decline of print media. What will happen to the publishing business model if more and more content shifts online but advertising CPMs don’t shift as well? We have to leave our egos behind and come up with ad units that work. Furthermore, we need to partner with advertisers and resist running ads that we know won’t work.

“Thank God,” we all feel when she sails into the lives of Jane & Michael Banks. We’ve just witnessed the torturing of their last nanny and the Banks’ lives are in utter chaos. Dad is disengaged. Mom is off at a suffragette rally. And the kids are left to their own devices. See what happens with too much unstructured play.

In his wonderful article today, Alan Schulman talks about the perils of agencies trying to work with clients on the topic of user generated content. He says clients want to avail themselves of the latest and hottest. Agencies don’t want two up-and-coming film students to lure away busines with promices of YouTube success. But, on the other hand, the agency risks rushing into a space that the client doesn’t understand, doesn’t work with the client’s brand, and so forth. Nothing falls so flat as a campaign that tries to force virality.

“The trend is consumer as creator, not consumer as creative director,” Schulman says. Consumers want to participate, but both brands and content producers need to provide the magic of Mary Poppins. Give consumers a framework: a magical and emotionally engaging experience where their contributions make sense. Structure, “spit spot” and “spoonfulls of sugar.” Otherwise, all those content producers are just like kids on a playground. It may be fun. A way to blow off steam. But it’s not quality content generation that will endure for its entertainment value or benefit brands.

When movies first came out, they looked like theater, just on screen. From a screen-writing perspective, that means there was lots of dialogue. You know, talking heads. It took movie makers a few years to get used to their new medium. Now we see long sweeping shots of landscape, and so forth. Movies are not just theater on screen. They are a whole new medium.

Now, we have so many new media. In the 21st century, how will media affect content? Some questions…

• Video: On a small screen, like an ipod, the material works BETTER when there are talking heads, more like movies in the 20s and 30s. Are we headed backwards to an older form to accommodate the videopod?
• Books: I am an audio book convert. A recent article in the New York Times suggests that because of the iPod, audio books in mp3 format are on the rise. Will books change? Will there be “books” that are simply issued for audio?
• Short Stories: Consider the eBooks newly released by Sony and by Amazon. Fabulous devices for reading, they will probably be most in demand for their ability to allow the user to download periodicals and newspapers for reading on a plane or train. Short, consumable content. Makes me think of the short story. Could the eBook bring back the short story? Don’t even get me started on the use of the eBook by kids instead of textbooks.
• Illustration: Again on the eBook topic, we know that illustrations/photographs are expensive to produce in printed form. Does the eBook bring into being a new form of more highly illustrated book?

Yesterday I found myself in the New York Public Library researching a book. My own reactions surprised me and made me wonder about (a) the future of libraries (b) content business opportunities.

Here were my reactions, in order.

• Wow, I forgot how beautiful this library is.
• Man, this librarian is so helpful. I would love it if I could be here everyday and ask her questions.
• Jeez, it is SO inconvenient to have to fill out this slip and wait for a book to appear from the stacks.
• Wait, the book isn’t digitized?
• Wait WAIT, you mean I have to sit here and use this resource? I can’t check this book out?

EeeGads, I am a spoiled internet-era brat!

The last reaction was particularly disturbing. A Spoiled Internet Era Brat (SIEB) expects all content to be digitized and to be available at her fingertips through the internet. Contrary to popular belief, a SIEB does *not* expect the content to be free. An SIEB expects the content to be free if and only if it is not unique and is easily available elsewhere.

But the cost-benefit ratio is just not there for libraries to invest in digitizing all of their content. Google, as we know, is trying. But, honestly, is Google going to be able to reach into the stacks of the NY Public Library and digitize a rare book on middle-eastern folklore? Well, maybe. Who am I to question the power of Google? They want to “catalogue all human knowlege.” My guess, however, is that the library structure, organizational system, and the librarian herself, provide a critical framework that makes “all human knowledge” intelligible to the average human.

I wonder, therefore, if there is a business opportunity being missed by the NYPL and other, especially big, institutions.

Read tomorrow for the business opportunity…