The Music Lesson: The Evolution Of Co-opetition?

I was first introduced to the concept of "Co-opetition" in mid-year 2007 by a dreadlocked fellow named Manu Lawrence, who presided over the hip-hop video destination site SandboxTV. According to the encyclopedia of free commerce, Co-opetition "is a term combining the words co-operation and competition and refers to the arrangement between competing firms to cooperate on specific projects or in certain areas of business for mutual benefit, even while remaining competitors in general."

Appreciated the concept and have been scrutinizing its evolution every since. Some notable early examples from my "discovery" time frame (and a little earlier) included:

  • NBCU and News Corp.'s joint venture announcement to create a yet to be named video destination YouTube buster.

  • Google representing to the advertising community some of the commercial TV inventory from digital satellite platform EchoStar.

  • Cable systems operator Comcast retaining online portal Yahoo to sell display advertising and video ads on its site.

  • ABC Broadcast Network making its hit prime-time series "Grey's Anatomy," "Lost," "Desperate Housewives," and "Ugly Betty" available for Apple's iPod.

  • Newspaper publisher McClatchy's defection from a national online advertising partnership with Tribune and Gannett to join a rival group of publishers, who are in cahoots with Yahoo.

    Most recent examples of this cooperation and competition concept amongst media companies include:

  • Fox and NBC forming a local TV news-sharing partnership -- working title, Local News Service (LNS) -- similar to the one the Associated Press plays for newspapers.

  • ABC's 10 owned and operated TV stations striking a deal with Cox Cross Media to have the national rep firm, which has arrangements with roughly 700 sites linked with TV outlets, radio and newspapers, represent the sale of inventory on the ABC TV Web sites.

  • The Washington Post and The Baltimore Sun sharing some of their articles and pictures to garner more coverage out of their news staffs.

  • Yahoo pacting with CBS Radio to plug its Launchcast internet radio service into CBS's webcasting network (Note: AOL Radio hooked up with CBS last June).

  • The Sun-Times Media Group striking a deal with Monster.com to form a series of online recruitment services and co-branded job sites across the publisher's 70 newspapers.

  • National Cable Communications (NCC), the nation's second largest spot cable advertising representation firm and owned by the four major cable systems operators, being retained by telco Verizon to handle local inventory sales for its video service FiOS as well as to handle the national sport sales (nine markets) for regional sports networks carried by satcaster DirecTV.

    Then, as we were rounding the close of 2008, I read an article about how the music industry, represented by its trade organization, The Recording Industry Association of America (RIAA), announced that after years of unsuccessfully suing people for allegedly stealing music via the internet -- to date, approximately 35,000 since 2003 -- they have decided to drop the legal assault tactic and are pursuing other avenues to discourage piracy. What other avenues, you may query, will the music industry pursue to stem the theft of their merchandise?

    Under a new arrangement with Internet Service Providers (ISP), the RIAA will send an email to the provider when it finds a provider's customers making music available online for others to take. Depending upon the agreement, the ISP will either forward a polite note to customers, or alert customers that they appear to be uploading music illegally and ask them to stop. If the customers continue file sharing, they will get one or two more emails, perhaps accompanied by slower service from the provider. Finally, the ISP may cut off their access altogether.

    If I understand this tactic correctly, the ISPs will be willing to cancel subscriptions and forgo monthly revenues -- upwards of $200 -- $300+ per month per household -- from their triple play or quadruple bypass (video, broadband, landline, mobile) in order to altruistically accommodate an industry under digital siege.

    This tactic is not without precedent in the United States. If I remember correctly, the Bush Administration had a similar arrangement with the telecom industry, through the government's wiretapping/home security initiative. If a person was deemed a threat to national security they would be detained and unfortunately, for the telecom operator, in most probability, the individual's service (monthly subscription) would dissipate due to their incarceration and/or inability to locate the customer in question, which ultimately led to their failure to pay their bills on a timely basis.

    Tags: tv
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