This document discusses the opportunities and risks of distributing arts content over the internet (AoIP). It reviews various types of over-the-internet protocols (oIPs) such as voice, music, television, newspapers, and sports. It presents dynamic models showing how internet distribution can grow markets but also reduce revenue for traditional distributors. While internet viewing increases overall demand, it may decrease demand for live performances and cause revenue losses. The document concludes that modeling value dynamics is useful for the arts sector and that innovative business models are needed to determine fair revenue sharing as broadband providers benefit from increased internet usage.

1. Arts over IP:
Risk or Opportunity?
Professor Charles Fine
Emmanuel Blain
Value Chain Dynamics Working Group
Communications Futures Program
Massachusetts Institute of Technology
May 2009
Telecom Italia Future Centre, Venice
charley@mit.edu
eblain@MIT.EDU

2. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.

3. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.
Big opportunity for Apple.

4. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.
Big opportunity for Apple.
3. TVoIP: Looks to follow music?

5. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.
Big opportunity for Apple.
3. TVoIP: Looks to follow music?
4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?

6. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.
Big opportunity for Apple.
3. TVoIP: Looks to follow music?
4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?
5. AoIP: Is “consumption” of the arts different?
Important distinctions among the arts?
Classical, Contempary, Performing, . . . ?

7. A Brief Review of the oIP’s
1. VoIP: Voice communication is alive and well.
VoIP is part of the landscape.
VoIP, so far, is a sustaining innovation;
eBay overpaid for Skype.
2. MoIP: Music consumers seem pretty happy.
Traditional music companies mildly(?) disrupted,
or, perhaps disrupted in slow motion.
Big opportunity for Apple.
3. TVoIP: Looks to follow music?
4. NoIP: In USA, newspapers declining rapidly;
Can bloggers and an army of “volunteers” fill
the gap?
5. AoIP: Is “consumption” of the arts different?
Important distinctions among the arts?
Classical, Contempary, Performing, . . . ?
6. SPoiP: Sports as a fast-clockspeed performing art;
Time shifting reduces value . . .

8. Sports over IP: A Dynamic Modeling Perspective
Rabid
Casual
Potential
Fans
Fans
Fans
(Live)
(Video)

9. + +
Fan
Creation Rabid Fan
Potential
+ Casual
Rate Creation Rabid
Fans Fans Rate Fans
+
(Video) (Live)
+ Team
Popularity
+
Success
Ratio
+ Number
Of Stars

10. + +
Fan
Potential Rabid Fan
+ Creation Casual Rabid
Fans Creation
Rate Fans Fans
Rate
+
(Video) (Live)
+ Team
+
+ +
Popularity
+ Demand
Demand
For Live
For Video
Performances
Content
Success
Ratio
+
+ Number
+ + + Un-Licensed
Of Stars
Over Cable Internet
Licensed
The TV
Internet
Air

11. + +
Fan
Potential Rabid Fan
+ Creation Casual Rabid
Fans Creation
Rate Fans Fans
Rate
+
(Video) (Live)
+ Team
+
+ +
Popularity
+ Demand
Demand
For Live
For Video
Performances
Content
Success
Ratio
+
+ Number
+ + + Un-Licensed
Of Stars
Over Cable
+ Internet
Licensed
The TV
Internet
Air
+
+ Stadium
Team + + Prices and
Revenue Attendance
+

12. + +
Fan
Potential Rabid Fan
++
Creation Casual Rabid
Fans Creation
Rate Fans
++
Fans
Rate
+
(Video) (Live)
+
+ Team
+
+ +
Popularity
+ Demand
Demand
For Live
For Video
Performances
Content
Success
Ratio
+
+ Number
+ + + Un-Licensed
Of Stars
Over Cable
+ Internet
Licensed
The TV
Internet
Air
+
+ Stadium
Team + + Prices and
Revenue Attendance
+

13. + +
Fan
Potential Rabid Fan
++
Creation Casual Rabid
Fans Creation
Rate Fans
++
Fans
Rate
+
(Video) (Live)
+
+ Team
(Local
+
+ +
Popularity
-
+ Demand
Sports
Demand
For Live
For Video
-- Blackouts)
Performances
Content
-
Success
Ratio
+
+ Number
+ + + Un-Licensed
Of Stars
Over Cable
+ Internet
Licensed
The TV
Internet
Air
+
+ Stadium
Team + + Prices and
Revenue Attendance
+

14. + +
Fan
Potential Rabid Fan
++
Creation Casual Rabid
Fans Creation
Rate Fans
++
Fans
Rate
+
(Video) (Live)
+
+ Team
+
+ +
Popularity
-
+ Demand
Demand
For Live
For Video
-- Performances
Content
-
Success
Ratio
+
+ Number
+ + + Un-Licensed
Of Stars
Over Cable
+ Internet
Licensed
The TV
- -
- Internet
Air
+
+ Stadium
Team + + Prices and
Revenue Attendance
+

15. + +
Fan
Potential Rabid Fan
++
Creation Casual Rabid
Fans Creation
Rate Fans
++
Fans
Rate
+
(Video) (Live)
+
+ Team Internet
+
+ +
Popularity
- Innovation
+ Demand
Demand
For Live
For Video
-- Performances
+
Content
- Internet
Success
Users
Ratio
+
+ +
Number
+ + + Un-Licensed
Of Stars
Over Cable
+ +
Internet
Licensed
The TV
- -
- Internet
Air
+
+ +Broadband
Demand
+
+
+ Stadium
Team + + Prices and
Revenue Attendance
+

16. Conclusions/Observations/Questions
1. Research:
Modeling value dynamics is feasible for the
performing arts (more to come)
2. Observations:
Internet viewing can potentially grow the overall
market for the arts, but may also reduce revenue
opportunities for art distributors.
All the oIP’s grow the pie for Broadband providers.
3. Questions:
Can Broadband providers get their “fair share”
(e.g, versus Apple, Google)?
What is fair?
Innovative business model design is big opportunity.