June 7, 2006
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media exchange
http://www.swaptree.com/ is an idea worth watching.
There are many interesting things to keep your eye on as this and similar systems evolve. Most of all there is the question of if or when the media giant companies will take note of the evolution of such services and how they will react to them. Now on the surface you might say that there is nothing here that could possibly concern them but there are a number of reasons why this is not so cut and dry.
The movie industry was repulsed originally by the idea that people might be able to watch movies in their own homes because they wouldn’t be able to control the number of people who could come over to your house and watch it for free. Media industries have been similarly disturbed with the inventions of television, radio, cable, video casette recorders, dvd recording, and of course peer to peer networks and surely many other technologies as well. In many ways a free swap service is much the same as letting large numbers of strangers over to your house to experience your media content free of charge. In the end, it has precisely the same theoretical potential to decrease the bottom line of the copyright holders as any of these other technologies. Fewer people *have* to pay in order to get access to a piece of media, if they need only wait and someone will lend it to them at no particular cost. Ultimately that would lead to less of a need for items to be purchased.
One interesting aspect of the swap-model though is that it does not obviously reduce down as fully as peer to peer networks. Media giants had a stronger theoretical argument for p2p networks because they could say that all it would take was one release of a piece of media and because copying was effectively completely free, soon everyone would have it. That’s never been a good argument when placed against the real world as no network is currently anywhere near that efficient. But with digital advancements we could imagine a world where it was possible. Everyone could have storage enough on their personal devices to hold all of the media content ever created in human history, and bandwidth would be such that someone could have a program that could instantaneously push all of the media data copied to their hard drive to every single person on the network in a blink of an eye. We’re no where near that yet, but nor are we so far away that we couldn’t see it become the case.
Right now, however, the difference between a physical swap system and a p2p copy system in terms of the bottom line of media companies boils down to just the difference between the number of media copies that have to be purchased before no one else has to buy into a new piece of media because everyone will get it. As physical swap systems because more efficient and our physical transportation system improves, the lines can begin to blur a great deal between the two.
One thing in particular that intrigues me about a swap system is the way in which it interacts with media monopolies versus independents. Smaller, independent producers benefit considerably more from a swap system than a media giant does. You see, people need to buy into the swap network in order to gain advantage from it. A person could buy 1 dvd from a company or another different dvd from that same company and either way they can swap it for the one they didn’t buy and thus experience both. They don’t have to pay for both in order to experience both or hope that they have a friend who happened to buy the other dvd. (As an aside, I’ve seen so many situations where people have come together and wanted to find something to watch together, say a group is hosting and wants to show a movie from their collection to the group they are hosting. Only they come to find that most of their guests pretty much own much of the same collection, leading them to have to go out and rent) In contrast, with a swap system, it is actually in your interest to diversify your collection. You may well be able to barter a lesser known work for a chance to watch each of the more popular works. The more popular works being more popular will have LOTS of copies on the network meaning you don’t have to worry about not being able to eventually see them. So why waste your money on them? People will feel a push to experiment with their purchases more and as a result independents will be able to sell more. The media awareness of people should become more diverse as a consequence and competition will become more fierce as the marketshare of all content will tend to converge.
Of course the big thing that will bother media the most is the possiblity of people ‘swapping’ the physical item and at the same time ripping its content to their hard drives resulting in people actually keeping their content in some form. I would argue that the ‘virtual copy’ is not quite the same as the physical copy as there are very different risks involved, and in terms of how most people experience most content most of the time, the act of copying the content is really just people being packrats because they are really unlikely to actually experience the content again very often. And if they did want to experience it again, with a swap system, what is to stop them from just swapping for the item back again? The act of ripping something seems to add on a little value for the person doing the ripping if you have a big and powerful enough swap system in place. It will be interesting to see how prevalent the behavior is. Of course, there’s also the excessive copy protection the media companies are creating and putting into all of their creations so maybe they won’t feel too worried about that after all.
Another question is how will the collectors market react to this invention? Many items today are advertised on the basis of their collectors appeal. The idea being to encourage buying and holding in the hopes that one day your item will be worth more than you paid. A swapping system of course encourages the opposite. You want to buy, experience as soon as possible, and swap as soon as possible and as frequently as possible in order to gain the most out of your purchase. That means you might tend away from purchasing more expensive items that have ‘collectors features’ in favor of cheaper items that you can swap for more goods. On the other hand people like to collect and if a swapping system were to become a trademark of our society then that would mean more items in frequent circulation that results in more wear and tear and a greater probability of items becoming unusable. That on top of the fact that there is less incentive to buy as many copies of a popular work might in turn result in collectors items being considerably more valuable in a swap filled future.
Lastly, the question that intrigues me the most is the question of how, if at all, a swap filled world might influence people’s opinions of the existing p2p networks. One possibility is that people will become more critical of those who make use of p2p networks. People will think: “how dare you take that for fee? It’s not like you have to. All you have to do is swap something you already have and have a little patience. Don’t be so lazy.” On the other hand, people might instead start to become more lenient to p2p users. They might say “What’s the difference? What’s the difference between it taking 1 hour to download a movie I want to see or it taking a 1 day to have it shipped to me, or 5 minutes to walk down the street to someone in my neighborhood’s house who has it available for swap?” If the swap system becomes really easy to use and really efficient and delivery systems become really fast and efficient as well, maybe people will just start to say “who really cares? Downloading a CD really isn’t appreciable different from checking it out from the library.”
One interesting element of the swap system from my perspective is how much more unequal and unfair it is than a p2p system or a library. I doubt people will take note of that aspect but wouldn’t it be interesting if they did? You see a swap system requires you to ‘buy into’ it. That means there’s a considerable barrier preventing your ability to experience media content. It’s a lot cheaper than a standard system of buying media, but its no where near as potentially cheap for a new person as a p2p network or a library. If you don’t own any media and don’t have any money to spare for media you just can’t participate in a swap network, but if you even own one movie or cd you can immediately start swapping, and given enough time experience everything. Contrast to a library. You can just sign up for a n often free membership and then you can check out anything noone else is using and given enough time you can experience everything. And of course p2p is best of all as you can just search and download and given enough time you can experience everything. Now equity on a p2p network requires that everyone upload as much as they download. but intriguingly even starting with nothing, on a p2p network you can actually be an equitable transferer by simply sharing the things you’ve downloaded again. You can even end up being altruistic by donating your bandwidth more frequently for upload. A person who started with not a dime to share could end up being a pillar of a p2p community. But if you have no money a swap network doesn’t even let you play and the more content you start with the more value you get out of it. Interestingly, a swap network also rewards those who have already contributed a lot to the media industries by buying goods more than it rewards those new to the market such as children. p2p networks in contrast will reward you for buying into better hardware and a faster network connection, something right now younger consumers may be more likely to do.
Many p2p networks tending to look more like swap networks over time anyway. p2p networks have to deal with a huge free rider problem which is minimalized for a swap network. Although it is trivial for someone on a p2p network to contribute as much or more than they receive provided they have the bandwidth even if they started with nothing, it is also *possible* to receive content without providing anything in return. In an ideal world no one would have any incentive to do that but unfortunately fear of liability coupled with the tendency of many isp’s to provide a much smaller upload bandwidth than down result in a lot more free riders than some of these networks would like and make them considerably less efficient than they otherwise would be. The result is that many p2p networks implement policies that increase your download speed or make more content available to you when you contribute more to the network. Taken to the logical extreme that pretty much ends up looking like precisely a swap network. You can’t download X bytes until you upload X bytes first.
Anyway, in general I think the spread of these kinds of systems, be they netflix, gamefly,gameznflix, peerflix, lala, swaptree, barter bee, freecycle, or just plain ebay are very good for the world. Their spread will erode our resistence to the idea of a large free media commons being available throughout the world while at the same time giving more people access to a greater amount of interesting content, and at the same time saving people money.We may be going the slow way about providing free access to media to all but we may well be getting there anyway, so long as our laws don’t mess it up.
Let me know if you know of any other services that provide unique twists on this kind of an exchange system.
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One minor issue I have with this swaptree system is that what you can swap for seems to be determined by some kind of ‘algorithm’. This is a little disturbing to me. I sincerely hope that this algorithm is made freely known to the populace so that people can make rational and fair decisions about purchases on a realistic understanding of what they will be able to trade it for. It would really stink if they can buy something and then havet he algorithm mysteriously change on them resuling in the thing they bought not having the value in trade that they expected it to. It would be far more disturbing if the algorithm contains elements to privledge certain kinds of media to make them seem more popular or even create artificial scarcities in order to encourage people to buy more of a certain kind of media.One thing that surprises me about swaptree is that they didn’t decide to do a simplified bidding system. You can’t say, here’s my dvd, what dvd’s will you trade me for it, collect a bunch of bids and the user can select the winner. That would be a more interesting system to me, especially if it allowed you to do trades accross media types. It would be intriguing to see how books trade for dvds and in turn for CDs and in turn for video games. Maybe we might be able to discover that certain media types aren’t actually worth nearly as much as they are being sold for to people. Oh well, swaptree is something different and there are other systems out there that are closer to what I describe. They all have their place.
Thoughts?
