Way back in the early days of U.S.A., copyrights lasted 14 years with a rarely used option to renew. But since conventional wisdom (not fact) says more intellectual property is better, copyrights can now last up to 70 years after the creator dies.

The argument for extending copyright protection often seems aimed at protecting current copyright holders, like Disney trying to keep Mickey Mouse out of the public domain with the 1998 copyright extension act.  The trouble is copyrights are meant to encourage more content creation, using the limited monopoly as a small incentive.  It took more time, money, and work to share and profit from content creation back in the days before publishing houses and movie theaters (think 1776 without the singing or bathing) when the founding fathers thought 14 years was enough reward. Now, it is faster, cheaper, and easier to distribute content.  Content can be seen by millions all at the same time without much additional cost or effort, yet the monopoly reward is even larger.

The speed of business, namely its acceleration, should decrease the length of copyrights (and even patents). While a printed book in the 1800s would take months if not years to spread around the country, a TV episode is finished in a day. Most motion pictures make the majority of their money within three weeks. Popular video games are brushed aside in less than a month. And even novels rely on best-seller lists to stay in prime locations at book stores for more than a few weeks. Money grossed after this small windows is often profit - the marketing budgets are focuses on the quick, early buck. So why the century of copyright protection instead of 14 years or less?

The argument against this logic is the growing reliance on the long tail for smaller content producers. It takes longer for content producers without mega-marketing budgets to make all their profit in a few weeks, sometimes taking a few months or years.  The challenge for us (namely the government) is to balance the length of copyrights fairly with content providers and the consuming public. In the days before Amazon, the long tail was even harder to come by but 14 years was reasonable for the content providers of the time period. Books and poems were published without interruption meaning 14 years was a fair comprise.

The key thing - content producers make money faster thanks to all these new flanged inventions like the internet, computers, and the printing press. Even small publishers can market to a niche a get results. Copyright is not a guarantee for profits - no one has a right to make money.  That’s still the content producers job. I don’t see why they need more than a century to do so.

Chris Anderson tries to tally the free economy, counting the money made from advertising, “buy one, get one free” gimmicks, and free services subsidizes by paying customers (like Flickr or MYSQL).  The numbers are huge, talking hundred of billions of dollars in each category, if not trillions.  Anderson’s point is that free has been a business tool for a long time, using infinite goods like TV shows or loss leaders to sell more valuable scares goods.  Companies used to charging large amounts for their goods, like music and movie companies, are finding it hard to understand the free economy and how much money can be made there.

Anderson is promoting his new book, “Free” about leveraging free as a business model and I’m hoping he leads by example, proving the point of his book through his own leadership.  “Free” isn’t due in stores until next year when I hope the book is sold extremely cheaply, subsidized by Anderson’s certain to follow speaking tour.  The promotion from the book would make Anderson a more sought after and thus highly paid speaker (time is a scare good).  Books have a higher marginal cost - the cost of printing, paper, binding, etc. - so some price for production might be need.

Anderson could also release digital copies of the book (and audio) for free online.  Matt Mason is doing just that (at least in book form) with his book “The Pirate’s Dilemma” about how file-sharing helps businesses make more money.

To further prove his point, Anderson could release his four year old book “The Long Tail” online for free (and lower the price on those $30 audio book copies).

This is a man trying to change the way companies think about business and the concept of free. I really hope he thinks about it himself.

Microsoft ruled desktop computers but now can barely get people to visit its website without paying them. Tim O’Reilly effectively sums up Microsoft’s problem:

Microsoft was once motivated by its own Big Hairy Audacious Goal: “a computer on every desk and in every home.” They achieved that goal, and ever since, they’ve drifted. Now their only goal seems to be to stay on top of the heap. They need to stop focusing on eating other people’s lunch and start thinking deeply about what kind of goals might stretch the company once again.

This past month has show Microsoft’s tunnel vision when it comes to the web. The company failed to acquire Yahoo (which was probably a good thing for both companies). Then, Microsoft offered cash back to users of its product search, feebly thinking this would steal customers away from Google. Microsoft ignored the fact that its product search is inferior to Google and didn’t offer enough money to make the step down worth it.

More subtly, Microsoft announced it was ending its book scanning project, leaving the endeavor to Google. Alex Chitu explains:

In other words, the book search engine didn’t make enough money and Microsoft decided it’s better to focus on areas that are more profitable. Instead of improving their search engine with valuable content from books and offering better search results, Microsoft chose to make decisions based on the short-term profits.

But that’s not all. Microsoft also decided to remove several games from its Xbox Live store because people couldn’t find the games they wanted. Apparently, Microsoft’s never been to Amazon.com or it would realize the benefits of the Long Tail and maybe fixed its user interface instead of depriving itself of additional revenue.

This is a lot of mistakes for one company to make. None of these seem like poor ideas over the short term, but they show Microsoft can’t look past its next earning’s report. Google, in comparison, lets its ad service support a research factory of innovation where products are unleashed with the idea for monetizing a distant thought for the future. Google News, Docs, Apps, Notepad, and Reader all have no advertising.

O’Reilly suggests Microsoft needs to define its long term goal, something that doesn’t put it in direct competition with Google, even outsourcing search. I don’t agree Microsoft should give up on search, mostly because I don’t want Google to have a monopoly on search (competition good, remember). But it’s true Google’s already doing well with the “Organize all the world’s information” goal.

Microsoft needs something new, that doesn’t rely on the walled gardens that made it the powerhouse it is. The next stage in computing won’t allow Microsoft to live off overpriced software like Windows and Office; not when free, open-source and online alternatives offer compelling alternatives. Buying Yahoo or Facebook isn’t a strategy unto itself, but needs to be part of a long term goal that recognizes both short term and long term benefits. Microsoft itself needs to change, and that change will happen over the long term.

Movie companies vs. major retailers. While this may sound like a royal rumble, it’s really posturing of the worthless kind. Wal-Mart is rumored to have plans, which it denies, that will punish movie companies who release films on iTunes and other downloading services. Movie companies seem to be scared of this.

Even as Wal-Mart denied these rumors back in September, stock of Apple and Walt Disney Co., the only movie company with films on iTunes, fell 2 percent (Sept. 22 to be exact).

It seems no one is making the right decisions here. Movie companies seem to be hesitant about releasing movies online for fear of alienating retailers, not making enough profit, and risking more piracy. Retailers want their brick and mortar monopoly to last forever. And shareholders think Wal-Mart’s going to win. They are wrong.

New media and liberalization win in the end, and this benefits movie companies. But it seems movie companies haven’t learned from their failed fight against VHS. The changing media demands changes first by the media companies. This means, unfortunately, a possible dip in stock value over a few quarters until consumers understand whatever changes occur. But, also unfortunately, stock price is everything. Viacom Chairman Sumner Redstone had his 2007 compensation cut with future pay tied to stock prices.

The internet market allows for greater access to more people with specific interests. As Chris Anderson shows in “The Long Tail,” online retailers like Amazon and iTunes are able to offer more products and reach more audiences than Wal-Mart and Target’s brick and mortar stores. But for now, this business model is scary. For non-blockbuster releases (which Anderson shows are no longer as blockbuster-y), revenue has to be looked at long term. A small movie release might only sell 2 copies a month, but over a few years. Wal-Mart and Target would never sell a title that sold that little.

Movie companies need to realize this technology shift provides consumers with more information and this includes information about their entertainment. Choice is empowering, whether choosing how to access, buy, or enjoy entertainment. The result might be less profit per unit (or feature film), but the internet will allow for a greater number of those units. And through online, these will always be accessible to a hungry audience.

Let movies be downloaded. Let them be downloaded inexpensively (as in less than the price of a takes-up-shelf-space DVD). It’s okay to put special editions in stores. Or offer coupons for in-store purchases to be used online, and vice versa. Some how, some way, embrace the new technology. That’s what the retailers are scared of. That movie companies will discover there is a better way to do business.

The Long Tail looks at how technology is helping change business, spreading focus from a few blockbusters to broader niche interests. Anderson, an editor of Wired Magazine, explores how Amazon, Netflix, iTunes, eBay and other online services are helping consumers find new items for purchase as alternatives to the best sellers in stores.

Anderson’s effective argument presents a large problem for the entertainment industry who’s survive thrives on a few choice blockbusters which are now commanding less of consumer dollars. This problem is even more prevalent in the music industry where file-sharing has offered a nearly unlimited source of music to explore, all for free.

What Anderson missed was a conclusion of what to do about this change. How can the entertainment industry, for example, adjust its reliance on blockbusters in the new media age. File-sharing spreads as do broadband and improved compression methods. More downloading services appear offering greater choice, convenience, and price competition with brick and mortar stores. Several services, like Rhapsody for music, GameTap for video games, and cable’s OnDemand for movies offer unlimited viewing of a large library for a monthly fee. Certain items will likely be more popular than others, but with a monthly fee, blockbusters just don’t register.

I believe the entertainment industry will gravitate to monthly services, especially in video games where updating technology and options have higher value. The popularity of massively multiplayer online games is only a beta preview of what’s to come. Now, video games and the systems running them become obsolete. Why play Civilization 2 when I can play Civilization 4? But with Civilization: Online, my small monthly fee allows for a constantly updating and evolving game. But game companies will have to create a balance of games for the casual gamer who doesn’t want monthly fees for each game compared to the avid followers who will pay. Rumor has it, Marvel Comics’ long-in-development MMO will explore this changing world scenario, allowing the game to change as the comic books change.