Wednesday, December 9, 2009

The End of the Web as We Know It?

We know it as a platform where:

  • website or other on-line source (any web site or media store like iTunes),
  • media (e.g. MP3),
  • local software or client (e.g. Media Player) and
  • device (PC, Mac, Phone, Flash Drive, Netbook ...)

are not coupled with each other. Many competing companies are providing products or services for each of the components.

This open model resulted in huge innovation over the last two decades, and spawned a lot of competition in creating the websites, media formats, software and the devices, driving the price down and quality up. All this possibly at the expense of the content providers who have huge problems protecting their content, because, to be universally playable, all parts of the system need to be well documented and interoperable, with any kind of security and copy protection clumsily pasted on top of it all.

Apple Closing the Web?

Kindle, Nook and much of the Apple Store stuff signal a possible end of this model. But with music and videos is it a lot like putting the ghost back into the bottle. Any device can play an .mp3 and any website can sell it. Not to mention the P2P networks.

The last major media area where the digital has not taken over the material are newspapers and magazines. So if one could make a closely linked system between a website, a device, its software and the media format, one could offer something very special to the content owners: reliability that people will pay for content and that they will not be able to copy it. And that is worth trillions! Rumors are that Apple is doing just that:




The press will be the killer app for the device, but if the people had their wallets out, they will try to sell any other digital stuff as well.

Turning the tables

On the short run at least, this closed model is good for the content authors. Quite likely a lot of quality content will be exclusive to this device. It offers a sustainable business model, contrary to the advertising model (the Google model) which is not. Why? With the economy increasingly digital, advertising material stuff to support digital content will eventually bite its tail. More and more of the digital will have to be supported with ads for less and less material.

But the closed system can be disastrous for innovation everywhere else in the chain, and disastrous for the richness of the content that we read. We have seen Apple censoring the content of its on-line store. Asking a single company for an opportunity to distribute information is open society's the worst nightmare. It will not be one US company indexing all (European) content, it will be a company deciding what (European) content can be available on-line.

(There is little incentive for those devices to offer access to free content. It would be like selling printers who could use free ink. But surprise me.)

Need for functional separation

Therefore, the regulators will have to look at this very carefully. In the chain of digital content production, distribution and consumption we will need what was called "functional separation of telecoms". The latter is irrelevant today. But breaking links between Amazon and its reader, Barnes Nobe and its reader, iWhatever and Apple Store and iTunes ... will be essential.

The end? Perhaps not, but it got you reading this. Major disruption? Sure.

8 comments:

  1. I absolutely agree that separation of media from content providers will be of the utmost importance in the future so as to avoid the creation of monopolies impenetrable to outsiders.

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  2. Could I have written anything that makes less sense? Hardly. What I meant was the separation of content providers from providers of the channels through which such content is transmitted.

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  3. New York Times tried to sell high quality content but later opened it all. Arts is the last bastion of closed market. Music is at least learning.

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  4. Most of the "closed" devices (will) have browser and access to the internet => free content. The real question is will there be any quality content available for free? And it probably will be..

    The other problem you mention is more related to censorship than to some service / technology provider..

    I cannot order certain books on audible.com, because I'm from Slovenia and I cannot install Kindle on my iPhone from the very same reason...

    I'm certain that this behavior is not Audible's decision as it is not Apple's.. but I don't know who actually decides what can be / cannot be seen in one country? Publisher? Do we have rigid import laws?

    If I have the money and want to buy some book from USA, than I should be entitled to get it, right? How come EU doesn't have a law for that...

    Anyway .. functional separation doesn't fix the censorship problem..

    PS: I don't mind paying for a good book, iphone app or whatever I find extremely useful and reasonably priced...

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  5. Tule http://www.dnevnik.si/debate/kolumne/1042322582 je kolumna, ki pritrjuje tezi mojega besedila, da bo namreč avtorjem zaprtost všeč.

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  6. this an example of yet another standards war.
    imho no worries for end of the web as we know it.

    apple is just another company good in opening new markets and trying to dominate them with 'defacto' standardizations. analogue cases are so narural for decades (e.g. sony betamax vs. vhs standards war) and hasn't brought any deads of the camcorders and media players as we knew them. it was plethora of new technologies that brought the change.

    in business, by definition, these cases are called a horizontal (e.g. apple going for publishing e-newspapers) or vertical forward integration (e.g. a newspaper starting it's own distributuion)

    any regulations in such integrations will be more known as end of the capitalism as we know it. and that is less possible.

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  7. "On the short run at least, this closed model is good for the content authors. Quite likely a lot of quality content will be exclusive to this device."

    i would like to question these two assumptions which are, i suppose, foundations for the later conclusions.

    why will such closed model be fine for the content authors if there will be more then one similar devices on the market? i mean, to build such device is not a rocket science and there is no significant barrier of entry for such, new, market. a lot of hardware manufacturers has the knowledge and money to enter new market. on the other hand it is already an existing market and lots of companies are involved in it with their tablet products. if apple chooses new standards for the data presentation, there is also no rocket science to build another data presentation format which will be importable/exportable to the apple's one.
    in case that content author choses support for only one data/content presentation standard then it may lose quite a share, proportionally to the market share of the devices.

    i can say that a scenario that will lead to apple's domination of the tablets market is possible. nevertheless this is less probable, since competition is more sober, after their iphone ignorance.
    but monopoly in offering exclusive interactive media presentation format, i can not get even far to such scenario.

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  8. just a short note that microsoft will probably hit the market much sooner with a device that i suppose can do
    the same as ipad.
    http://www.youtube.com/watch?v=pFQWc79TYcU

    the user experience seems even closer to reading book/magazine/... then the ipad demo above. if i am a print publisher i would strongly reconsider if i would publish content only for apple's ipad.

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