...current industry models will soon fade out, notes Ajit Balakrishnan.
"Sir, can I have a word with you," asked the man in security-guard uniform at the entrance gate of the public park, where I go for my daily one-hour walk, near my home in Mumbai.
I was puzzled. Was I carrying some forbidden object that the security guard wanted to notify me about?
Or was there a timing change and I, with my nasty habit of being too early for all meetings (more about that later), have come too early for the park timings?
Or, is this park, which is open to all with a nominal Rs 100 per year fee, about to raise its fees and it has asked the security guards to notify all?
"Sure, go ahead and tell me what you have in mind," I told the guard.
"My son is a gifted creator of music, and he is looking for a way to earn a living from that... I want your advice on how he can make a business out of that," he said.
I hid my positive surprise that a security guard should have a son who aspires to be a music creator... but told him to give me a day to think about it and get back to him.
Nowadays, though I listen to music when I do my daily one-hour walk I really hadn't kept in touch with the music industry, so I had to do some research before offering advice to a young aspirant.
I could intuitively see that the cassette tapes, which dominated the Indian music industry through my college years and till recently (Wikipedia estimates that even in the year 2000, 49 million cassettes, a third of it pirated, were being sold every month in India), must have given way to streaming music on the Internet.
Then came a shock for me: At present, according to a report, one million music streams were played every three minutes in India, totalling 480 million streams per day.
The statistics site Statista says this amounted to annual revenue of $900 million.
Unfortunately, just as in the old-economy days, even in the Internet era, less than a half a dozen companies dominate the Indian streaming market.
And even more unfortunately, their current business models land them in equally astronomical losses.
I cannot stop myself from wondering whatever happened to our dream that the World Wide Web would democratise the sharing of information.
It was supposed to give each individual the power to share his ideas and thoughts or do transactions... how come it is getting dominated by a half a dozen or so goliaths?
One of the reasons for this dominance is that economic policymakers in India and elsewhere have not yet paid enough attention to a key aspect of the Internet and the Web: The force of network effects, which quickly leads to industry dominance by half a dozen players that have the finances to subsidise a part of the network.
Methods for regulating competition in the network effects era have not yet been updated in competition policy legislation anywhere in the world.
But wait, there is a quiet revolution on the way in the music industry, for example, and is worth a close study because these techniques may spread through other parts of the economy, and this is called the 'creator economy'.
Two technologies underpin this movement: Non-fungible tokens (NFT) and blockchain.
While an NFT can be linked to any media, what's typically associated as the 'content' of an NFT is something that can point to images, videos, music, or other forms of content.
This NFT is then stored on blockchain.
The NFT embedded in a song or a photograph or a text article makes the ownership verifiable, eliminating the need for intermediaries, such as galleries or record labels, and enables creators to sell directly to their audiences, thus retaining more of the profits from their work.
Use of blockchain ensures that storage is decentralised such that no single person or group has control; instead, all users collectively retain control.
Using an NFT and blockchain, more idealistic entrepreneurs can and should help usher in the creator economy: The economic system that will emerge allows 'creators' leveraging digital platforms to produce and distribute their own content, products, or services.
The creator economy fosters direct relationships between creators and their audience.
A second aspect is that it democratises creativity: The barriers to entry will be lowered significantly, allowing individuals to become creators with minimal upfront costs.
This democratisation will lead to a more diverse range of voices and content, challenging traditional media structures.
A third aspect is creative independence: Creators will then have the autonomy to produce content that aligns with their vision and values.
All this will lead to the attraction of new audiences seeking authentic and niche content that may not be readily available in traditional media.
And, by the way, my acquaintance, the security guard's creative son, will stand a reasonable chance of finding a market for his creative talents.
More importantly, this creator-economy model can extend far beyond the media.
It can be used for all kinds of services: Financial, legal, medical, educational, technical, and others. But ushering in the creator economy will require adequate legislative innovation as well.
Maybe it is time to remember a recent point made by Tim Berners Lee, the creator of the World Wide Web: 'It's understandable that many people feel afraid and unsure if the Web is really a force for good.
'But given how much the Web has changed in the past 30 years, it would be defeatist and unimaginative to assume that the Web as we know it can't be changed for the better in the next 30.
'If we give up on building a better Web now, then the Web will not have failed us. We will have failed the Web.'
Ajit Balakrishnan (ajitb@rediffmail.com), founder and CEO, Rediff.com, is an Internet entrepreneur.
Feature Presentation: Aslam Hunani/Rediff.com
