Peer-to-peer sharing would never have gathered momentum if the music industry had adopted an internet distribution model, Intel chief executive Craig Barrett has told IT executives at an event in India.
"The music industry absolutely stonewalled the distribution method associated with the internet to the point that peer-to-peer sharing became so prevalent that it didn't make much difference," said Barrett.
"Five to eight years too late we are starting to see distribution models set up for distributing music over the internet, where somebody actually gets paid for it. People are inherently honest and want to pay for goods and services, and that would have happened if the music industry had adopted the technology and come up with commercial distribution models a lot earlier."
The film industry faces a similar challenge as bandwidth increases allow movies to be downloaded over the internet. "It would be interesting to watch whether the movie industry will in fact rapidly and aggressively adopt a distribution model consistent with the new technology," said Barrett.
Slated to talk on corporate governance at an event hosted by the Delhi-based National Association of Software and Service Companies, Barrett also spoke at length on the variety of business models companies can adopt to be successful.
He cited a number of companies that have benefited by changing the rules, including retailer Wal-Mart and Dell, which sells configured-to-order computers direct to customers. Wal-Mart uses IT to control stock and point-of-sale information.
"Wal-Mart is really an IT company in disguise," Barrett said. "It just happens to sell products to the consumer."
According to Barrett, Intel changed the rules to its advantage using four key strategies:
- the "Intel Inside" branding programme
- shifting the definition of IT architecture from PC makers to companies like Intel
- creating a new distribution channel of about 180,000 system integrators that build computers with Intel technology
- setting up a venture capital business that invested in companies with technologies supporting or compatible with Intel's own technologies.
"There are very few ingredient brands that have been successful," said Barrett, referring to the "Intel Inside" branding.
As computer devices became more sophisticated and function-rich, so Intel had a greater impact on the definition of IT architecture, with PC makers doing less R&D. "We decided we would foot the bill to do the R&D and create new architectures, and then give our customers that R&D information free of charge so they would use our latest products for their next generation of computer architectures."
Touching on new rules of corporate governance and accountability in the US, Barrett said he believed most companies were professional and honest, and new regulations only led companies to focus their resources on compliance, rather than on creativity and innovation.
"The US political system instituted a number of rules and regulations, and perhaps the best way to describe these is that they try to legislate integrity, morality, professionalism and behaviour in a legal fashion in the corporate business world. I think that the great majority of US corporations were already doing all of those things, but the politicians in their wisdom have put an infinite burden of proof on everyone."
John Ribeiro writes for IDG News Service