In my previous post, I wrote that in order to see the wood for the trees in forthcoming legal and regulatory changes and developments, I’d look in a bit more detail at ‘the digital shift’ and then then overriding themes which reflect these complex interactions. This posts looks at that shift.
The first industrial revolution, which began in the 1750s, lasted for between 80 to 100 years. The pace of technological change todayencourages us to believe that the 2nd industrial revolution (‘IR2’) will be completed at much greater speed. So if we take the mid-1980s as a starting point, with the emergence of optical disk technologies into consumer markets, you would expect us to be well on the way to completion, 30 years into IR2.
But we’re not. IR2 is multi-factorial,consisting of developments and changes in technology, law, business models and consumers’ attitudes to copyright, privacy and their use of social media. All of these changes are moving at different speeds, with technology way ahead of the others. If there isn’t a law which states that that “the pace of change is dictated by the slowest moving part”, there should be.
So let’s assume that 2013 marks an approximate midway point, then it is not unreasonable to guess that we have another 20 years or so to go before the tectonic shifts of IR2 have substantially occurred. On that basis, we are still in a period of flux.
Timing is all
In fact, change seems to occur in bursts of acceleration. For instance, we have seen the rapid emergence of a market for e-books in 2011-2012,preceded by a longer period of around 9 years during which the technology for e-books began to emerge but before the market took off.
These cycles of impending change and pent up demand, followed by rapid bursts of accelerated change, can lead to complacency (“these changes won’t happen or will only happen much later”) or to over-optimistic projections (“this is all going to happen overnight”).
Both are wrong. The smart money identifies the indicators of change during the ‘impending change’ part of the cycle and makes an informed guess – no-one can precisely predict – about when the trends which are apparent during this part of the cycle are going to burst into market development. That way, you can be ready to take advantage of these market developments and avoid having to play catch-up.
All human activity is here
The ‘digital shift’ affects all aspects of economic activity.
Certainly, we are seeing how the Web and Mobile connected digital devices, together with social platforms, are transforming the ways we consume and participate in entertainment and information products and services. But the ‘digital shift’ is also changing the broader world of business and consumer products and services too. New ‘peer to peer’ lending services like Zopa are appearing in the financial services industries. New fashion businesses are being established which sell direct to consumers. The advertising industry is in the process of re-inventing itself to find new models for mobile advertising that works effectively on tablets and smart phones. Social sites like Facebook and Twitter are emerging as platforms for new services. In the retail industry, the boundaries between physical and online shopping are beginning to blur. Smart phones can be used by customers to get updates on the latest in-store offers and to enhance the shoppers’ in-store experience. The list goes on.
For content owners and producers, the challenge is to avoid dependency. If they acquire their customers through FaceBook or Google, or monetise them through a revenue share with Apple, they have a vulnerable business model in the longer term. They may start that way but will need to break
one of those dependencies and therefore need a migration path so that they can acquire customers directly or can monetise them through subscription etc.
In my next posts, I’ll look at the overriding themes of the ‘digital shift’ and 'tag' them with the key legal issues associated with them.
Have a good week,