Squeaky clean Singapore lacks drug dealers, but I discovered a new vice last night when a dinner guest whipped out her terabyte hard drive and started sharing knocked off TV shows round the table. It's made me realise that it's time for Pembridge to unveil our new approach to Intellectual Property, writes Hugh Mason
Having relocated here in January, I thought I was used to cultural surprises. For example: it no longer makes me laugh that customers queue up in the Hawker Centres at lunch time for a tasty bowl of Pig Organ Soup or Fish Head Curry. It's just different, OK. But this was unexpected in such a law-abiding land.
Mediacorp and Starhub, the local broadcasters, evidently so disappoint the demure ladies of the Lion City that they are forced to hold illicit parties where everyone brings along a hard drive and swaps TV shows they've downloaded using Bittorrent or Rapidshare. The quality's great and there are no adverts, apparently. I naturally couldn't confirm this but I understand that, because the illicit goods are zipped in Rapidshare, this illegal activity is becoming harder and harder for ISPs to detect and block.
I smell business models burning like toast, all around me.
Newspapers are stuffed, now that we all read what we need online, for free. Traditional TV with adverts is something that only the off-line or over 40s care about. And as for music ... last month I went to the first live event I've been able to attend since I became a father. The business model now seems to centre on selling bottles of water for $5 a time to a captive audience sitting outside in a country that averages temperatures of 28C. This, after you've had the rubber glove treatment at the gate in case you are smuggling in your own bottle.
It's enough to make you believe that the only future for content companies is to find new ways to bully customers.
There must be another way - and not just for music and content businesses. Intellectual Property is the currency for anyone who creates, brokers, packages or distributes the intangible. It doesn't just affect the sing-a-long sector of the "Knowledge Economy".
It is evident that, if something can be shipped around the world with effectively zero distribution cost, it will be, whatever laws or Hollywood try to dictate. That doesn't just go for chunks of content (the music, TV, books and games we buy for entertainment). It also applies to the services provided by "Knowledge Workers" at all levels.
The days of charging big bucks for looking up something arcane in a book and charging clients for writing it down are gone. Just because you're a fully qualified Accountant, Lawyer or Radiologist, you are now capable of being replaced by someone at a tenth of the cost in India or China. And when their labour rates rise too high, it will be time for a new middle class in Africa to make a buck.
Author Daniel Pink makes a convincing case that anyone who currently relies on "Knowledge Asymmetry" for a living is in for a very hard time. "I trained for x years to become a lawyer and to learn all this stuff, therefore you must pay me $$$ an hour" doesn't wash any more. You're just not worth the money, honey.
On the other hand, if you add value by creating new positive options for people, in their personal or professional lives, you will forever farm a fertile source of income. Heck, your customers might even end up liking you. That matters - the new world is all about sharing, win-win and give-a-little / get-a-lot from the many people who think well of you.
Naïve, new-age wimp-talk?
Before you write it off, look to the open source software movement for precedents. If that doesn't convince you, bear with me while I explain how information, professional services and content are like vegetables.
Economics teaches us that society ascribes value to scarce resources. In a broadband world of abundance, the scarce resource is not the raw stuff of information, content and knowledge. It is a buyer's time and trust.
Value is now added by offering convenience and credibility in the way stuff is sliced, diced and delivered, whether that's a product like a song, or a service like the analysis of a mammogram. The internet puts every business on the shelves of a virtual marketplace - the web - and buyers pick and choose, just as they select fresh produce in a supermarket.
It is, of course, possible to grow your own vegetables, if you have time and inclination. Should you be prepared to spend a few pennies, you can buy them in a paper bag. Or you can have them chopped, washed and blessed by the TV chef of your choice, if spending your money that way makes you happy.
Likewise, you could swap pirated TV shows, download illegal music and go through all the faff of organising your own storage and filing all those thousands of tracks. Option two is that you sign up to a service that hosts it all for you and does all that tedious stuff for a few quid every month. Or, you could pay for a personal entertainment consultant to select the stuff you really should be watching to stay super cool and informed.
In the content world that selection process is called the editorial function and it's really what we pay newspapers, TV stations and magazines to do for us. Someone collects what we really want and leaves out all the stuff we don't.
Alone amongst UK media channels, there's a strong argument that the Financial Times has been able to charge online for its services, not just because its readers are wealthy, but also because it is differentiated by really distinct and credible editorial selection. In contrast, other newspapers that merely push out PR puff and wire stories more or less unedited aren't really adding value and so readers are resistant to pay for them.
Likewise for professional services. Google and its successors will soon serve up something vaguely sensible to answer any question, for free. Lawyers, consultants and the like can't compete with a machine for that kind of service. But if a client wants to know how reliable, up to date or credible an answer they have found really is, or if they want the answer packaged so that it's easy to apply, de-risked and expedient, many will still be prepared to pay for that privilege. It all depends on how much the answer means to someone who's asking the question.
You could get your own breast X-ray taken and read up on the web how to interpret it, using a home-brewed light-box. But would you?
In the same way, if you are busy running a business and thinking of selling it, raising money, or pursuing an aggressive growth strategy that you know will involve risk, you might still want to engage an expert. It might help to use that expert's time better if you took a look at a DIY manual first and then you could feel confident about where you want the expert to add value.I, for one, would much rather work with better informed clients who know what they want. Which is partly why we, at Pembridge, recently took a decision to give away all our Intellectual Property. Through a variety of channels we are going to start publishing as much of what we know, as soon as we can, for free.
Soon you will be able to read DIY articles written by us about many aspects of creating, building and realising value in your business here and elsewhere on the web. We hope our Associates will work with us to share their know-how too.
Will we still be in business in two years' time if we give away what we know? Watch this space :)
In the meantime, please be prepared to pay $5 for a glass of water or to use the toilet when you visit our offices. Doh! Only kidding. But if you'd like a fundraising tour T-shirt with your new shareholders ...
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