CNET's Greg Sandoval recently posted a fascinating interview with Eric Garland of Big Champagne -- a California-based company that collects data on filesharing and sells it to the content industry (you know, like labels and film studios). As can be imagined, a lot of what Garland tells these companies isn't perceived as good news. But Big Champagne has been at it for a decade, during which peer-to-peer filesharing went from a "hmm, maybe we should pay attention to that," to a "OMG -- where did all of our sales go?" phenomenon.
Though the massive shifts in the production, distribution and sales of music have certainly changed the game for the mainstream biz, technological evolution has also created new opportunities for artists who are now using essentially the same tools as the biggest companies -- in many instances, with more success. Which isn't to say that rampant filesharing hasn't also negatively impacted artists (and indie labels) -- it's just that that some have been more quick to adapt to the new terrain.
Adaptation is part of what Garland recommends to companies seeking to come out of the other end of the digital transition with something of their business intact. This hasn't made him especially popular, but it's important to remember that the health of Garland's own company is tied to that of his clients -- if they go bust, he doesn't have anyone to sell his data to. Which is why Garland isn't shy about serving up the bitter medicine. In his view, the companies that entertain his prescription have the best chance of surviving.
The Q&A with CNET is mostly about the challenges Hollywood will soon face, but it does contain some keen observations on the music industry. Here's a particularly telling segment where Garland talks about how prevailing attitudes could result in a similarly precipitous fall for the movie biz:
We'll spend some number of months -- I'm just essentially recounting the music industry's journey -- filing vast numbers of infringement notifications, letting everybody and their granny know you're infringing our content. They'll take the temperature and they'll do surveys and collect data and they'll try to convince themselves that this is having a real effect in reversing the tide and then after some period it will just not have been convincingly demonstrated to have worked. And they'll realize that by any number of measures the piracy problem has only grown worse. But they will have to exhaust all of those things and more. They will have to chase legal remedies, legislative agendas, all the way to what they view as being the end of the line before they say "OK, so this really is the landscape we're stuck with. As much as we didn't want it, this appears to be it. Now we have to just dive in and make businesses that work here."
And that's where music has only just arrived in this country and note it hasn't even come close to arriving in a lot of European countries. If you ask Universal Music Group in the U.K. "Are you going to win this war on piracy?" They will say "Oh yes, swiftly and decisively and soon. The rate of peer-to-peer infringement will be down 70 percent in the U.K. in the next few months. They have specific targets. Not here. We've exhausted all of those paths. There's a big gap. If the music industry in this country just now sort of arrived at the conclusion where they say "We just have to play on this field even through it ain't home court and there isn't a lot of advantage." And in some territories, music hasn't even gotten there yet, then how can Hollywood be there? This is early in the journey. I do think it's going to be a quicker path. It has to be. The economics are going to come down faster.
It certainly isn't a happy-go-lucky message that Garland is delivering, but he says that to not pay attention could mean extinction (or close):
I spent years when everyone ignored what I was saying because I know it's not pleasant to hear. But my job is to help businesses all over this landscape to get from point A to point B with the least amount of pain. But that means getting smart and getting ready for the transition before the competition. I want them looking in the mirror now and not when it's too late. It's tricky. I want these guys to do well but l don't want them to tell themselves bedtime stories. That's what the music industry did.
They spent a lot of money going back to antipiracy and spent a lot of emotional dollars on vendors who sold them panaceas and told them everything is going to be okay. "Don't listen to Eric Garland," they said. "He's a gloom-and-doom guy. He gets off on telling you things are going to be terrible. Spend a few million dollars over here and we'll clean up the Internet for you. Hey, I understand that. I want to open up my wallet for that guy too. It's comfort food.
But my message to media companies is they don't have that kind of time anymore.
Check out the entire interview here.