Litigation, Innovation & Frustration!

Ever had an idea on how to improve a company’s service/product?  Ever wondered why it hasn’t been acted on yet?  Ever wonder why some companies sue others out of fear that their company will lose business?

To me…the whole “litigate instead of innovate” thing is just frustrating!  Many once-prominent companies hold fast to the legal system to protect them from competitors rather than innovating and embracing new mediums of change.

Now I’m not talking about real, legit intellectual property here (well…maybe a little)…but more about how companies stick with their “that’s the way it’s always been done” approach as opposed to adapting to new trends, mediums and waves of change.

Here’s some examples off the top of my head:

  1. YouTube vs. Big Media:  Over the past year and a half, YouTube has become the #1 destination for online video.  While it did this with a large amount of user generated content, it also had/has done it with quite a bit of copyrighted material as well.  After they were acquired by Google, YouTube stepped up its “partnerhsip” talks with several of the Big Media players.  Now let me preface the next statment by saying that I have no clue on what the “partnerhsip” details are in the eyes of Google…it may be a reasonalbe offer and it may very well be completely ludicrous.

    Well to date, the talks have not panned out well for “GooTube.”  Viacom as well as several other media companies have sent take down notices to the site asking (well…telling) them to remove their content.  And on top of that, Viacom recently sued them for $1 billion dollars. Now they do have some very legit cases here in that their content (and they do own rights to that content) is being distributed on the site without their permission. 

    So now the “rumor” is that the big media players have decided to join forces and create their own video hosting/sharing site.  Sometimes I wonder why they don’t embrace GooTube as the new medium for video viewing and piggyback off of the success of the idea.  Why not not use it to promote their content as well as make some revenue?  I think that it would be great to have millions of little clips of 24 posted all over people’s myspace profiles…it’s a great way to engage with a brand.

    Chances are that people are not foregoing watching their beloved 24, Lost, or Prison Break on regular TV for a less rich and lower quality experience on YouTube.  Now all kinds of people, from billionaire Mark Cuban to superstar blogger Michael Arrington, have weighed in on this discussion…I’m just using it to get to a point.

What about DRM and the flow of online music with respect to iTunes, the iPod, my computer, my stereo and the music labels?  What about cellphone providers locking in consumers to certain types of “hardware” like SIM cards making it a HUGE hassle to switch carriers even if the pricing dictates a switch?  Or what about the recent move from the US Copyright Royalty Board to raise the royalty rates for webcasting music on the internet? 

It’s all classic protectionism…change comes ‘a knocking and companies seek to litigate/resist it rather than asking themselves how these changes can help benefit their operations.  In his book Good to Great, Jim Collins does an excellent job of illustrating this.  He gives examples of companies such as Nucor, Kroeger and Kimberly Clark that were forced to make drastic operational changes in the wake of fleeting business models and technological advancements.

As for me…I’d rather err on the side of innovation any day of the week.

By Micah Davis

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2 Responses

  1. Love the insights…keep them coming.

  2. […] Last week I wrote about some of the problems with copyrights, walled-garden business models and old-school systems in my post “Litigation, Innovation & Frustration!” […]

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