I was going through my first blog posts, and rediscovered a quote from 2003 Game Designer and Pundit Greg Costikyan from his blog Games * Design * Art * Culture that still resonates with me today:

“Oh…. And you fellas. Sure, I like portraying the angry, um, middle-aged man… But, yet, I understand the importance of capital in bringing a product to market. But think about it: Back in the day, capital provided four essential things: development funding, manufacturing, marketing, and distribution. In the digital era, manufacturing is trivial; distribution is less of an issue; marketing is, if anything, harder; and for most products (not games or film), development is easier and cheaper. Under the circumstances, isn’t a realignment of the percentage of revenues due to artists a vital necessity? They =should= get a bigger piece of the pie. And since manufacturing is trivial, and development easier, the whole thing should be cheaper to consumers.

And whoever figures out how to market effectively online is going to be worth…. well, more money than I shall ever see in one place.”

The reason this connects to me today is that this change has already happened, manufacturing and distribution have become significantly cheaper, and the costs of marketing have been growing. I don’t agree with Greg that the costs of development have become that much cheaper — yes, the costs of certain kinds of development, in particular online products, have become cheaper, but the costs of content creation portion (even given user-generated content) has stayed the same or even grown.

Thus we should be paying the creators and the marketers more, and manufacturing and distribution less. But financially there is a disconnect here — most of the benefits of the changes in the social web in the last 5 years have gone to the distributors. These are the Facebook, Hulu, and Twitter hubs in the social web. They don’t manufacture, they don’t develop content, they don’t even market. They are fundamentally about distribution.

A lot of my entrepreneurial colleagues in the intervening years have been trying to figure this out as well, most notably John Buckman, of Magnatune, of “We are not Evil” fame who has been attempting to give more to the musicians: “Find a way of getting music from the musician to their audience that’s inexpensive and supports musicians. Otherwise, musical diversity will continue to greatly suffer under the current system where only mega-hits make money.

Musicians need to be in control and enjoy the process of having their music released. The systematic destruction of musician’s lives is unacceptable: musicians are very close to staging a revolution (and some already have).”

Yet despite these lofty ideals, and a good match to the changes happening in the costs of distribution and manufacturing of music, Magnatune hasn’t had a big impact on the music marketplace. Instead, Apple’s iTunes is the becoming the biggest part of the ecosystem as a distributor of music — and they don’t create music, and except in a relatively limited way they don’t market music.

Obviously my sympathies are with the creators — I call myself one. Yet I feel that in all the creator marketplaces I’ve been involved in lately, music, games, books, graphic novels, art, etc., that their portion of the pie is decreasing.

So why is distribution dominating earnings, when given the changes caused by the Internet they should be earning less? Is it a cultural disconnect where our culture has not adapted to the changes fast enough? Is it is a supply and demand problem where there is an oversupply of creators? Is there less demand? Or is it that there the barrier of entry created by the Long Tail such that access to the creators is only by these big distribution sites?

Help me answer this question, and maybe I can help the creators so that they can deliver to you amazing stories, songs, and art.

Life With Alacrity

© Christopher Allen