I want to talk about business models, specifically, the current Physical and Digital models.

In the current Physical model, you give a store or person money and they give you the merchandise you want in exchange for that money. This works extremely well in the Physical world. On the other hand with digital goods, it gets a bit more complicated.

The Digital world of computers and the internet is different from the Physical world. The internet is currently open, at least for most countries. This is the nature of the internet and the computer world. When computers first started getting popular in the home, the speed at which you could download files was extremely slow. As Technology advanced our ability to share bigger and bigger files has become much faster. It increased so much that you can now start downloading a movie and watch it at the same time. This spawned sites like Hulu and Netflix.

Now the issue with Digital goods versus Physical goods is that Digital goods are intangible and uncontrollable unless you use DRM of some sort. 

Wikipedia on DRM:

“Digital rights management (DRM) is a class of access control technologies that are used by hardware manufacturers, publishers, copyright holders and individuals with the intent to limit the use of digital content and devices after sale. DRM is any technology that inhibits uses of digital content that are not desired or intended by the content provider. DRM also includes specific instances of digital works or devices. Companies such as Amazon, AT&T, AOL, Apple Inc., BBC, Microsoft, Electronic Arts and Sony use digital rights management. In 1998 the Digital Millennium Copyright Act (DMCA) was passed in the United States to impose criminal penalties on those who make available technologies whose primary purpose and function is to circumvent content protection technologies.^[1]“

The reason why the difference is so great between Physical and Digital is that you only need to create a digital good once, and it can then be replicated infinitely without extra cost. Physical goods take resources to replicate and it makes sense to sell each item for money.

Digital copies that are streamed can be uploaded to people for near nothing, all you need is a connection to the internet. There are also models out there where you can share a file with multiple people and as they are downloading that file from you, they can share that same file with other people at the same time. This is called Peer to Peer file-sharing or P2P.

Physical goods take resources to replicate so it makes sense to charge for each separate copy. Digital goods however are easily copied and shared.

As a writer and creator of digital stories, I’m torn. On one hand, I want to be paid for my work. On the other hand, I understand that my stories can be easily shared with others.

It makes sense that companies are trying to apply the Physical world model to the Digital world. These companies are old and they don’t know anything different. Technology is going so fast that old-world models are having trouble keeping up.

That’s where digital companies like Netflix, Disney+, and WattPad come into play. You can subscribe to them and get access to “Premium” content. A writer like myself could post a story on Wattpad, make it Premium, and I would get paid just for having my content up there.

The problem with this is that someone is able to just copy and paste my work to a PDF. Then they share it and I make nothing. WattPad tries to circumvent this by not allowing people to highlight text. However, in my recent experience, you can use Google Lens to copy words from a screenshot.

What these companies don’t understand is that there’s no way to actually stop people from sharing files with each other.

The Gaming Industry understands how the internet works. They have moved to what is called the “Free to Play” or the F2P model.

The F2P model is pretty simple. You get access to the game’s most essential aspects like the main storyline and in the really good F2P games access to all of the weapons and armor. You might be wondering how these games make money. Well, they have what you call Micro-Transactions.

Micro-Transactions are usually small amounts of money you spend on aesthetics, like changing the color or model of your character. This has no real impact on the game other than looks. Some games offer ease of use Micro Transactions like extra storage or a little bit of an experience boost for people who can’t play as often. Generally, you can unlock all items in the good F2P games by just playing long enough.

The thing about F2P games is that you don’t have to pay anything at all to play them. When you do make a Micro Transaction though, it gives you the feeling like you are supporting the company that made the game. So at no time do you feel forced to have to pay the company. If the content is good and you enjoy playing you will likely pay for something.

While gaming companies and movie companies like Netflix have figured this out there is still a major roadblock for content creators.

The RIAA and the MPAA. These government entities are stifling creativity. In the US the fair use laws are extremely restrictive. For instance, I had a scene written in my book where the main character sings a song. It’s a popular song and I only used a few of the song’s lyrics.

Every single writer I talked to said that I should remove it and reluctantly I took their advice.

I don’t understand how my writing a few lyrics to a song could take anything at all away from the other content creator. If anything the people reading my book might open YouTube and watch the video making the company/artist money.

Speaking of YouTube. The RIAA and the MPAA stifle content creators there too. While I understand that someone posting a full movie would be in the wrong, clips of that movie should be able to be used without impacting monetization. With today’s laws, you can only post seven seconds of someone else’s content. It’s not nearly enough time.

Streaming is different altogether. You can’t even listen to music in the background while you stream or you’ll get a “Strike” against your account. Well technically you can listen to music in the background but you need to shut off VOD’s. (Video on Demand) That means that the content that you created is not recorded at all. Which means that everything you’ve done is lost.

To circumvent this there have been artists that create content that is allowed to be streamed. They forgo the RIAA’s laws and don’t copyright their work or they use Creative Commons copyrights.

I obviously have deep feelings on this subject since I rambled on for so long. But it’s essential that the laws and industries change with the times or they will be left behind.

I hope to see you again.