The future of creativity

Big is dead, but that only opens up air for small producers

by Kevin Potvin <kpotvin@republic-news.org>

As Bertelsmann AG, the huge music publisher, and 20 th Century Fox, the huge film publisher, have both recently learned, the threat to towering globalized publishing firms presented by the appearance on the radar of the two incoming blips known as digitization and the internet is a catastrophic one that will flatten all big vertical companies.

Just ask CBS, the enormous publisher of television broadcast news, about “blogs,” after one such micro-organism felled the giant by exposing Dan Rather’s legacy-exploding fabrication concerning President Bush’s war-service record. The day before 20 th Century Fox released its latest Star Wars blockbuster, its block was busted by the widespread internet dissemination of high-quality bootleg recordings of the movie. And though it first sued then bought Napster, the free music file sharing site, Bertelsmann was the first to feel the chill in its bone, being so heavily invested into a medium that is just one more 15-year-old hacker away from becoming irreversibly free for all.

Wherever the world is going with its technology, the moral of the story is becoming clear: creative content cannot be protected from free copying via digitization and it cannot be protected from uncontrolled distribution via the internet. Right or wrong, pleasing or disturbing, the reality is that, without being able to prevent uncontrolled copying and distribution, large publishing companies are today walking their green miles.

But just as the demise of large recording labels hardly spells the end of music, the disappearance of all large publishing companies in all the varied fields of publishing does not mean there will be no more films, books, magazines or newspapers. What it does mean, though, is that the companies producing these creative goods will be small, horizontally-organized, nearly non-structured companies.

That is not to say, however, that the overall projects engaged in by these small, shifting, and nomadic companies will necessarily become small themselves, or that the final form of their products and the impacts they create are necessarily going to be small either. Large-scale projects with large impacts will still be published as many people in many companies, most of them being one or two-person companies, are brought together for short-term, intermittent moments of collaboration. It is like an ocean wave, which is comprised entirely of the same tiny molecules of water that splash around in a bathtub, only there are many more of them involved. The analogy can be stretched further: no single molecule of water is involved for more than a few seconds in any size wave. There are also no molecules moving forward with the wave when it pushes across an ocean, just a lot of molecules moving up and down in a choreographed sequence so as to create the illusion of a huge object, the wave, moving. For all its power, last seen on Boxing Day all around the rim of the Indian Ocean, an ocean wave is still nothing but an organizing principle.

At the origins of any project that washes over the flat and widely disseminated economy of the borderless world sits someone who started the wave. This is what will replace the large, clumsy and soon-to-perish major publishing companies today responsible for large music, film, book, magazine, and newspaper projects. Today, a large, vertically-organized company conceives of a film, writes the script, throws a director and staff into it, sets up the cameras and shoots it, edits it in its suites, and reproduces it and ships it out to theatres. Tomorrow, the originating company will conceive of the whole project, but then will pull in a separate company that specializes in imagining and designing films, another that provides scriptwriting, another that offers directing staff, more separate companies that do only film shooting, others that do only film editing, and so on, including an outside company specialized in co-ordinating the work and timing of all the other companies.

This organizing principle can create in the end very much the same kind of product as was produced by the big companies, only without there being any building the whole project took place in, without any large overhead in staff, without any single boardroom running all aspects of the film, and without any single large pile of capital tapped into. Rather than a hierarchical company producing a film, it was instead nothing more than an organizing principle flowing through an ocean of small horizontally-connected companies, making each of them momentarily move up and down just once in an ordered sequence. This is the future.

The critical difference that makes this the next evolution in the economy is that such a method of production does not necessarily need to create large or mass produced products to sustain itself. A large hierarchical production company such as those that dominate today is involved in large, long-term building and equipment leases, long and huge labour contracts with management and workers alike, and large commitments with suppliers of all kinds. Most cripplingly of all, large companies are financed with large borrowing arrangements dictating that their products be large enough to generate huge revenues to cover the necessary payments. The current system encourages always larger projects so that the revenue-per-project ratio is maximized, thereby minimizing the overall company operating costs per year.

In the new economy, by contrast, a relatively larger project does not require a larger company, only more smaller companies becoming involved with it. With a large or small project, no single company is deeper or less deep into equipment leases, labour contracts, or financing arrangements. Without these conditions, no company involved anywhere along the line in the production of published material needs to work with only large projects to survive. To a company that only provides film directorial services, for example, a large project would look and work no different from a small project.

Small projects are likely to be more encouraged than large ones in the new economy. Since small projects require the same work from all the varied small companies involved as one large project would, there is no built-in advantage for large projects to prevail the way they do in the present, dying world. There are, in fact, a lot of advantages to smaller projects: the failure of one project will produce less fallout when there are many projects and all are small; the increasingly fragmented consumer market can more widely be captured with the bigger net of many small projects; and the attack upon and destruction of any one project, say by hackers reproducing it on the net, will have negligible effect on the industry as a whole.

For better or worse, it is the al Qaeda model that best describes the new economy, and the US military that exemplifies the old. (War and business are alike in many ways.) Al Qaeda has no geographic location, rents out no office building, has no address, has no certain leadership structure, no long-term contracts among its parts, no staff of a permanent nature, no bank accounts, and not even any certain kind of signature method. Even its overall purpose and aims seem shifting and vague. For all that, al Qaeda is indisputably the most widely known, and feared, military organization in the world today.

The US military, geared toward fighting organizations that exist in buildings and that have addresses, leaderships, staffs, bank accounts, and purposes, can only lash out at those types of organizations, and therefore misses entirely al Qaeda—and is even in fact strengthening al Qaeda with every wild swing of its muscle-bound arms. The US military, the dominant vertical organization in the world today, cannot secure the ten-mile road from Baghdad to the airport. Al Qaeda, on the other hand, the first modern horizontal organization, seems able to strike at will in virtually any country around the world it chooses. If the stories are true, al Qaeda blew up the Pentagon. Just as in the publishing world and the business world at large, so too in the world of military conflict: one of these modes has a future, the other does not.

Only participants in the new flattened economy can withstand the winds of damage brought by digitization and the internet that are felling the behemoths one after the other throughout the old vertical economy. The free copying and distribution of Star Wars did huge damage to the ability of 20 th Century Fox to gain back what it invested in the production of that project. But the free copying and distribution of one of a thousand little Star Wars films created by a thousand little companies in collaboration hardly hurts anyone at all.

The big film company with the big film product needs big theatres charging big numbers of people big amounts of money. The many small companies making small products only need small theatres charging small numbers of people smaller amounts of money. Free and illicit copying and distribution of big films only occurs because the admission fees to see them are so big, and the companies making them are remote, huge and unfriendly. If films were cheaper, or gathered revenues in other creative ways besides crude turnstiles at the door, the motive to view illicitly copied and distributed versions would lessen. As companies making them grew smaller, down again to the human scale, they would not be remote anymore, but they would be more neighbourly—and less likely to be the target of wonton theft or outright sabotage.

This is not a description of what should happen, but rather a description of what is happening, like it or not. Big is certainly dead because of digitization and the internet, but publishing in all fields is certainly not, because of the human spirit and creativity—and the erasing of the constraints imposed by economies of scale.

As a consumer of published material of all kinds, I welcome the new world that will generate many more, much smaller projects involving much wider collaborations among a more varied range of people. There are the same big amounts of money to be made in all of publishing, only in the new economy, maybe it will be split more widely and fairly. Maybe more of it will wind up in the pockets of creators and contributors, and less in the hands of investors who today do nothing yet get the most.

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