December 9, 2009
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.