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Pirates not to blame for Big Media's sales plunge

Evil empire caught in logic loop ... arrrrrr

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Sysadmin blog The RIAA and MPAA would have you believe that piracy is responsible for their decline in sales. This is all of course blame to be laid at the feet of computers, the internet and the generic "digital boogyman." Even without getting deep into the flawed math in play, there are other reasons for the middling returns on investment Big Content is seeing.

Cord-cutting is a big factor. Personal taste naturally varies, but in my view the advance of technology democratised content creation and enabled a generation of talented creators to capitalise on a resistance to innovation by established media. Reality TV was what did it for me; channel after channel of absolute crap got me to cut the cord in 2003.

With Game of Thrones as the only notable modern exception, my "mainstream" media consumption has evaporated over the past decade. Niche content like A Dog's Breakfast, Assassidate and the show roster of Geek & Sundry has taken its place.

I've paid for content I like, consumed some of it "free" (advertising on the website) and even put up money to help crowdsource the creation of content I love such as Sex after Kids. Trying to arrange my schedule around the TV or pick between various unpalatable options at the movie theatre is no longer a consideration.

Video games too are responsible for eating into time that once would have belonged to Hollywood. Skyrim is a temporal black hole; Civilization is always just one more turn; and don't even get me started on the overwhelming pervasiveness of Minecraft.

The Red camera bears more blame for my cord-cutting than piracy ever will. The internet gives indie artists the ability to distribute their works without having to fight the media giants for shelf space at the local box store, but there were ways around that even before YouTube.

What's new to the equation (and what altered the fundamental market dynamics) are cheap but "good enough" technologies spanning from Red cameras through powerful PCs and dead-simple suites of editing software. What used to require the might of Big Content now requires a nerd with a MacBook.

In fixating unrelentingly on the internet as the scapegoat, the media giants lost touch with reality. They began to view their own customers as the enemy and spent billions of dollars trying to cripple the wrong target. They alienated not only their own customer base, but a significant chunk of the very artists who they rely upon to package and resell as their "product."

When I look at the IT industry, I see it happening all over again.

Within IT, Oracle is a famous example of a tech empire caught in the same logic loop. The Oracle database is a critical piece of technology, and the vendor lock-in is strong. But Oracle is bleeding customers. Some are fleeing to Microsoft, some to DB2, others to HANA, the free databases and so forth. Oracle have tried to consolidate power by buying competitors like MySQL and companies with whom they saw synergies (Sun.) The Oracle tendency to view its own customers as the enemy has led to a corporate attitude which threatens to drive away most of the customer base they've purchased to alternatives.

Oracle has fixated on SAP, HP and other competitors, blaming them each in turn when it comes time to explain corporate performance to Wall Street. The problem is always "someone else's fault," and the critical eye never turns inwards.

AOL, Yahoo, RIM, Nokia…even the venerable HP have fallen into the trap of corporate hubris. Each of these companies flushed their research and development departments down the toilet in exchange for short-term quarterly gains and today teeter on the brink of their own protracted death spirals.

Long-term planning – such as investing in research and development – seems to be ever more unpopular among today's tech titans, but while more cutbacks and some reorganisation will make the board feel better, these companies are all probably doomed. At best, they will continue on as a shell of their former selves, Novelling their way through the decades until – like Commodore or Atari – only the name remains.

Microsoft is not immune. Apple dominates PC growth, its market share continues to rise. Microsoft's Windows 8 is something of a Hail Mary; the change perhaps a little too radical for some. Some elements of the strategy may already have failed.

Even Cisco is not immune; upstart Arista has Cisco in its sights, and from all accounts is getting both the tech and the customer side of the relationship right.

The two threads I spot weaving all these corporate wobbles together are a fixation on external influences and a turning a deaf ear to customers. Whether the external fixation is a blatant attempt to copy a successful competitor, blame and finger-pointing, desperate anticompetitive (usually patent) corporate warfare or bitter ego-driven executive catfights, the body corporate loses focus on the simple creation and delivery of excellent products.

Everything is a gimmick. Bugs can be fixed in post-RTM patch, or addressed with DLC ... assuming your carrier or reseller makes them available to you, that is. Vapourware announcements, regional segregation, price-gouging, scapegoating and blame-the-victim are the new normal.

Big Tech needs a Red camera moment. Maybe "the new open" projects like Openstack or the Raspberry Pi are the beginning of a successful "indie tech" movement. Maybe not; market changes like that take decades, and it is far too early to call it. But Big Tech is starting to look and feel to me a lot like Big Content did right before I realised I could cheerfully live without it. If Big Tech wants to hang on to the glory days of the mass market, they could do with a reminder: we are their paying customers; their source of revenue. We are not the enemy. Treat us fairly, listen to our input, provide us products we want to buy and we'll all benefit. Otherwise, slowly but surely, we will seek alternatives.

Even if we have to create those alternatives ourselves. ®

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