Friday, September 16, 2011

The Internet Promised Disintermediation - Here it is...

Over 15 years ago, I remember 3Com and U.S. Robotics people including myself talking about the Internet bringing disintermediation - the removal of intermediaries in the supply chain - the ability for the producer and the ultimate end user doing business together with no channel partners in the middle.

Funnily enough though, if you look at some of the greatest Internet successes; Amazon, eBay and (at a stretch) Google - they are the epitome of intermediaries - great resellers or putting customers and suppliers together and even Google's search results are just a list of data on other people's web sites.  Then  you can look at the price comparison sites and ticket and trip/holiday sites and often they are intermediaries too.  Skype - joins together people, Spotify, just another way to consume music.

So, were we wrong?  Were we fooled?  Did we expect more seismic changes than we got?

I'd say that the change is happening, but only in some industries and at a slower pace than we technologists thought (no surprise there, it always happens like that).

However, nowadays many musicians sell some of their material direct to their fans - perhaps only the odd live album for the most successful artists, but it is certainly keeping older artists going who are still making interesting music but who's fan base is smaller.

Of course, it is those purchases that are most easily digitised that have the greatest opportunity - so the flurry of announcements from movie studios is interesting and no doubt very scary if you are one of the intermediates.

As an example, look at this link from Miramax.  Famous movies available for the equivalent of $3 each.  Many times cheaper than going to the movies (and you don't have to listen to teenagers chatting/texting), less hassle than finding a Blockbuster nearby and lower price (at the moment) than LoveFilm or equivalent general film download services.  If this is successful, what space the video shop? The retailer offering you downloads? Miramax hold the cards if they want to destroy the intermediaries.

So, I guess the future is coming, just not quite as fast as we thought, I certainly wouldn't be opening a video store at the moment.