Growth, jobs and more

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.

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  1. Nice post,
    I disagree, this will make the internet thrive in my opinion…
    Anyway, thanks for the post

  2. I could summarize your text with one sentence. Monopoly is evil. From the past & present we know monopolies (like INTEL, Microsoft, Google) who got to the point, where they became dominant and also rigid (read inovation level is low->remember Intel: we will put out some better proccessor when AMD putsout sth good) .The competition struggles to break theese monopolies (remember AMD). Also regulators are struggling-although they have some bold moves (especially against MS in Europe) – to get things right. But the consumers don’t have so much time to wait. Ones kid can finish his high school before Apple will provide more freedom in his business model, ones kid can learn only from the Amazon editors before competitors will follow efectively, ones kid only knows MS Windows (this kid is me 🙂 before … “i don’t know -but linux is not the answer here”, ones kid only knows one search engine (this kid is still me), before he realizes that relevant information was on page 10 because THE search engine promoted consumption related products on first 9 pages.

    This WAIT thing bothers me a lot. I would love to buy an e-book reader, but the competition is just not strong enough yet (altough we see signs of improvement this year). The prices of the device are still high.The content is not accessible as I would expect. And most of all, the vendors are slow in EU markets.

  3. As technology contiues to evolve, it would be harder and harder for the regulators to do their jobs. But in my opinion, this should be a joint effort by the government, the business owners, and the buying public to have a say in everything that is going on in the world of technology.

  4. There has been an interesting development this week in Italy with the prosecution of 2 Google executives for the publishing of in appropriate you tube content, could be a revolutionary ruling with widespread repercussions if it isn’t over turned !

  5. This man, mr. Ziga Turk, is the single most uneducated and ill-behaved monkey in the whole of Slovenistan.

    Beware the arguments, he knows not of them.

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