The Game Theory of the Media future

The Telco 2.0 Brainstorm conference today witnessed a very rare talk - it used Game Theory to explain the options for the future of the media mediums (Music, TV etc). Professor David Touve of the Williams School of Commerce asked the 100+ assembled people there 5 pithy questions:

1. Is Media a Product or a Service?
The results - 90% thought it was a service, 10% a product. David said it was both, an also an experience, a cultural artifact and a social penomenon - and as it changes so the "money" vein shifts.

2. Do you believe the "3 strikes and you're out" policy will (i) decrease, (ii) increase, or (iii) give no change in Piracy?.
- 20% thought it would decrease, 10% increase, 70% no change

In other words, given that most of the techs know it won't work why would you do this? This goes back to my"Things White People Don't Like - Real Geeks" post. Telco people by and large are real geeks - digerati not chatterati, and as I pointed out in my post, "White" vpeopl tend to ignore their know-how and thus get things wrong. Like 3 strikes and out policies.

But the big picture absurdity of the Meedja was beautifully pinpointed by his next 3 questions:

3. Will a policy of filtering/disconnecting give a better economic outcome than licencing for Media?
result - 20% filtering, 80% licencing

4. Will a policy of filtering/disconnecting give a better economic outcome than licencing for ISPs?
result - 25% filtering, 75% licencing

5. Will a policy of filtering/disconnecting give a better economic outcome than licencing for Telco
result - 25% filtering, 75% licencing

The result is the "prisoners dilemma" game table you see on top, which shows clearly that the "optimal" box for Media rightsholder and ISP is licencing, yet the sad thing is a combination of self-optimisation and sheer pig headedness is driving the industry to a defect "disconnect/filter/net neutrality" fight as both tries to maintain its advantage and wants the other side to cave in.

QED.