This personal, lifetime buyout of rights is similar to what we do today when we buy a music disc or tape, or book, except that there is no physical medium involved. It sounds comfortingly familiar. However, there are lots of other ways to sell the enjoyment of music or other information.
For example, a song could be made available on a pay-per-hearing basis. Each time you listened to it, your account would be charged some small amount, such as 5 cents. At that rate, it would cost 60 cents to listen to a twelve-song “album.” You would have to play the whole album twenty-five times to spend $15, which is roughly what a compact disc sells for today. If you found that you liked only one song on the album, you could play it three hundred times, at a nickel each time, for your $15. Because digital information is so flexible, as the audio quality improves you won’t have to pay for the same music again the way people did when they bought CDs to replace the LPs in their personal libraries.
All kinds of pricing schemes will be tried. We may see digital entertainment that has an expiration date or that allows only a certain number of plays before it has to be purchased again. A record company might offer a very low price for a song but let you play it only ten or twenty times. Or they might let you play a song—or an addictive game—ten times free before asking if you want to buy it. This kind of “demo” usage might replace part of the function served by radio stations today. An author could allow you to mail a new song to a friend, but she will only be able to listen to it a few times before getting charged. A musical group could have a special price, far lower than if every album was bought individually, for a buyer who wanted all their work.
Even today, paying for entertainment information isn’t without nuances. The limited time value of entertainment information affects the way publishers and film studios market their products. The book publisher often does this by having two release windows, hardcover and paperback. If a customer wants a book and can comfortably afford it, he or she pays $25 to $30. Or the customer can wait for between six months and two years and buy the same book, in a somewhat less expensive and long-lasting format, for $5 to $10.
Successful movies are progressively shown in first-run theaters, secondary theaters, hotel rooms, on pay-per-view TV, and on airplanes. Then they are available as video rentals, on premium channels such as HBO, and eventually on network TV. Still later they appear on local television or basic cable channels. Each new form brings the movie to a different audience as customers who missed the previous forms of release (accidentally or on purpose) take advantage of the new opportunity.
On the information highway various release windows for content will almost certainly be tried. When a hot movie, multi-media title, or electronic book is released, there may be an initial period during which it is priced at a premium. Some will be willing to pay a high fee, perhaps as much as $30, to see a movie at the same time it appears in the first-run theaters. After a week, a month, or a season, the price will drop to the $3 or $4 we are charged today for pay-per-view movies. Marketers may try some wild things. Perhaps a movie will come along that you won’t be able to see at all in its first month of release unless you’re one of the top 1,000 bidders in an electronic auction on the highway. At the other extreme, if you have a track record of buying movie posters and merchandise related to what you watch, you may find you can get certain movies for next to nothing or with few, if any, commercial interruptions. Purchases of The Little Mermaid and Aladdin videotapes and associated merchandise might justify Disney’s allowing every child in the world one free viewing.
The transferability of information will be another big pricing issue. The information highway will allow the transfer of intellectual property rights from one person to another at the speed of light. Almost all the music, writing, or other intellectual properties stored on disks or in books sits unused most of the time. When you’re not consuming your particular copy of Thriller or Bonfire of the Vanities, most likely no one else is, either. Publishers count on this. If the average buyer lent his or her albums and books frequently, fewer would be sold and prices would be higher. If we assume that an album is in use, say, 0.1 percent of the time, “light speed” lending might cut the number of copies sold by a factor of 1,000. Lending will probably be restricted so users will only be allowed to lend a copy out perhaps up to ten times a year.
Public libraries will become places where anyone can sit down and use high-quality equipment to gain access to the information highway’s resources. Library committees might use the budgets that today pay for buying books, albums, movies, and subscriptions to fund the royalties for using educational electronic materials. Authors may decide to forfeit some or all of their royalties if their work is to be used in a library.
New copyright laws will be required to clarify the purchaser’s rights to the content under different schemes. The highway will force us to think more explicitly about what rights users have to intellectual property.
Videos, which tend to be watched only once, will continue to be rented, but probably not from stores. Instead, consumers will shop on the information highway to find movies and other programs deliverable on demand. Neighborhood video-rental stores and music stores will face a dwindling market. Bookstores will continue to stock printed books for a long time, but nonfiction and especially reference material will probably be used much more often in electronic rather than print form.
Efficient electronic markets are going to change a lot more than just the ratio of renting to buying for entertainment. Almost any person or business that serves as a middleman will feel the heat of electronic competition.
A small-town lawyer will face new competition when legal services are available by videoconference over the network. A person buying a piece of property might choose to consult with a sharp real estate attorney from the other side of the county rather than using a local lawyer who is a generalist. The resources of the highway, however, will allow the local lawyer to retrain and become an expert in any specialty of her choice. She will be able to compete in this specialty because of her lower overhead. Clients will benefit as well. The prices for executing routine legal tasks, such as the drafting of wills, will be driven down by the efficiency and specialization of the electronic marketplace. The information highway will also be able to deliver complicated medical, financial, and other video consulting services. These will be convenient and popular, especially when they are short. It will be much easier to make an appointment and turn on your television or computer screen for a fifteen-minute meeting than it will be to drive somewhere, park, sit in a waiting room, and then drive back to your home or office.
Videoconferences of all sorts will increasingly become alternatives to having to drive or fly to a meeting. When you do go somewhere, it will be because it is important that a particular meeting be face-to-face, or because something fun requires that you be there physically. Business travel may fall off, but leisure travel will rise because people will be able to take working vacations, knowing they can stay connected to their ofrices and homes through the information highway.
The travel industry will change even though the total amount of traveling may stay the same. Travel agents, like all professionals whose service has been to offer specialized access to information, will have to add value in new ways. Travel agents now search for the availability of travel arrangements using databases and reference books customers don’t have access to. Once they become familiar with the power of the highway and all the information that will be on it, many travelers will prefer to conduct searches themselves.