My colleague Adam Thierer and I are getting ready to attend the Consumer Electronics Show in Las Vegas, joining 100,000+ of our closest friends in a town with about 50 cabs. (Part of my preparation involved buying some extremely comfortable shoes at a walking specialty store.) The trade and technology press, and even the MSM such as the Wall Street Journal, has already started doing preview stories of the show. Adam and I will also be filing reports from the show, here and on the PFF blog. I'll be attending a number of sessions on copyright, with titles that kind of give away their slant, such as "Copyright versus Consumers: Where to Draw the Line?" and "Copy Fights: Consumers and Hollywood, are They Compatible?" Hmm. On the first one, does no one realize that copyright benefits consumers by rewarding the creation of new works? And on the second one, haven't consumers been enjoying cinema for about 100 years, about 60 years longer than there has been a CES?

But I'm not really going to CES for the panels; it's easy enough to find panel discussions here in Washington. I'm going to see all the neat new gadgets. Now with hundreds and hundreds of exhibitors in the Las Vegas Convention Center, the Sands Convention Center, and the Venetian, Hilton and other hotels, I can't possibly see them all. So I have a plan.

First, I have assembled a list of about 20 exhibitors I'm determined to visit, such as Movielink, RealNetworks and Akamai. But CES is also fairly good at clustering vendors in areas of a similar nature. So I plan to wander areas relevant to content delivery to seek that serendipitous moment of discovery. What do I hope to find? The next disruptive technology.

Sling Media (one vendor I'm visiting and also hearing on a panel) has shaken up the broadcast community. Pioneer's Inno has shaken up the satellite radio industry and led to a law suit and legislation. These technologies have several features in common: 1) They are imaginative. 2) They appeal to consumer wants and needs. 3) They don't fit neatly into existing law.

The Inno, for example, may not have the full, robust recording ability of an iPod, as CEA's' Michael Petricone pointed out at a Congressional Seminar I moderated last year. But it clearly goes beyond the days of a cassette tape in a boom box recording off the radio. Thus the Inno goes beyond a performance license but doesn't have the download license robustness of iTunes. Still, on the belief that one can't be a little bit pregnant, RIAA is suing XM Satellite Radio so that it can pay its fair share of a download license. My suspicion is that, if you looked at what Sirius is paying for a comparable device, the license is actually quite reasonable, but the point remains that the Inno causes reasonable people to disagree as to its legal state.

Of course, the problem would have been much simpler to solve if instead of having these unclear licensing regimes, we simply had a property rights-based market where rightsholders negotiated with device manufacturers; don't talk to me about transaction costs, the market can solve those far better than government creations.

Will there be future technologies like this? Of course, and I'm sure some will be in Las Vegas next week. When I covered Silicon Valley for CNET, I was always struck by the notion of techies who were determined to bring to market anything that could be conceived, regardless of whether it 1) met a consumer desire or 2) fit with existing legal norms. So disruptive devices are sure to be among the offerings at CES. I will point out here that I am not passing judgment on these technologies; no technology is evil, nor is it good, it just is. To the extent the device offers consumer benefit, we should want it on the market, but to the extent it impacts the rights of creators, we will also want to make sure those creators are fairly compensated.

posted by Patrick Ross @ 2:58 PM | Markets: Business, Investment & Innovation

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