A short story with a sad ending

Qtrax is the future of the music business. And it's a warning to what will happen to the book business too, if we are seduced by the false promise of digital publishing.

Motoko Rich's piece in today New York Times about digital publishing dances around the point. She tells us that there will be soon digital devices that "promise to do for books what the iPod has done for music." But she doesn't explain what exactly the broadband Internet has done to the music industry.

Excuse the literary pun, but it's a short story with a sad ending. The World Wide Web allied with peer-to-peer technology and broadband access has undermined the value of recorded music. Digitally distributed music might sound about as musical as the content on a vinyl record or a compact disc, but it contains less value. Digital music has no cover art, no presence, no physical actuality; thus, the broadband revolution has resulted in most people using the Internet to steal or exchange digital music rather than buy it. The digital revolution has commodified recorded music. We still love listening to music, but we are less and less willing to exchange cash for it.

Enter Qtrax, the future of the music business. Qtrax is a legal peer-to-peer service for the distribution of music. According to today's Qtrax press announcement of it first big deal with EMI Records:

Qtrax will offer two tiers of service:  the first is a free, advertising-supported tier designed to work with and filter copyrighted content from existing peer-to-peer networks.  The second tier is a premium subscription service which will require a monthly fee.  The two-tiered business model is intended to attract a broad base of consumers to try out the service, and then graduate those consumers to purchase music permanently or subscribe.

The first "advertising-supported" tier of this service is the future of the music business. What this means is that we'll be able to legally get music for free in exchange for watching advertisements. It's the old television model of free content and paid advertising -- the very model, ironically, that the TIVO revolution has destroyed. EMI's willingness to work with Qtrax reflects the crisis of the music industry. Advertising supported peer-to-peer services are the last refuge of an industry in disarray that has lost control of the value of its product. This Qtrax deal is a humilation for EMI. It is a sad epitaph to a once powerful business.

But back to books. Just as a compact disc is more than silver disc, the book is more than just a physical wrapper for ideas. In contrast with a newspaper or a magazine, a book establishes advertising free value for the written word. Like the compact disc, the value of the book is its physical form -- readers historically have paid money to access a non commercial environment for the consumption of ideas.

Motoko Rich writes about Yale law professor Yochia Benkler who is giving away digital copies of his new book "the Wealth of Networks" . Benkler's decision to put his book on the Internet might increase his value as public speaker, but such a short sighted gesture only commodifies his written words. How many people will pay the $40 price for the physical book if it is available for free on the Internet?

But nothing is free, really free, that is, online. With every Yochia Benkler commodifying the digital word, the closer we get to a Qtrax style model for the publishing industry in which the content is free, but the advertising is ubiquitous. This is the cost of giving knowledge away for nothing. Let's hope it's too high a cost for readers who are still willing to pay money for books that come without advertising.