Imagine today is September 8, 2014, a Monday. Your tasks today are to self-publish your new e-book, Really Bad 3-D PowerPoint 2015, and to find and purchase a book or article about the music of the Canary Islands from an authoritative source. Both tasks will be relatively easy.
You decide to offer your e-book for $5.00 to wholesalers and resellers; $7.50 for students; and $17.50 directly to individuals and the enterprise market. But, you’ll offer the first one and a half chapters for free. You electronically tie the offer information to the book and upload both to swarm from your home office’s electronic firewall.
Within minutes or hours, people interested in (avoiding) really bad PowerPoint have been alerted. They check your credentials via third-party rating sites and begin purchasing your book. Purchasers whose credentials are from dot-edu top-level domains are automatically charged $7.50, others are charged $17.50. Purchasers credentialed as wholesalers, or who the Digital Rights Management (DRM) system detects resell copies, are charged $5.00 per copy. Purchasers pay with credit and debit cards, checks, money orders, or even bill copies to their telephone or cable modem invoices. They pay in U.S. dollars or dozens of other currencies. Your receipts automatically arrive in your checking account as Canadian dollars as you live in Toronto.
Meanwhile, you’ve used your handheld PC/phone/camera/player/tollpass/toothbrush to issue a request for Canary Island music books, or articles authored in the English-language by a reputable native or expert. Within minutes, you’ve found two books and five long articles. Each contains music, video, and text. They range in price from €5 to US$25. One of the books has good reviews, so you hit a button on your handheld to purchase and download it.
Meanwhile, you’re reading one of the articles that’s offered for free, and another that costs you a micro transaction of £0.05. Fortunately, your handheld, as with all built since 2010, automatically tells you the costs in Canadian dollars and will bill them to your Visa card, which earlier in the year, you’d picked as your handheld’s default payment vendor.
Your interest in Canary Island folk music leads you to consider vacationing there. So, you set your handheld to give permission to any vacation vendors to send you information about one-week trips, provided those vendors’ Canarian vacations are highly-rated and cost no more than $2,000 Canadian.
Now, return to September 2004. In last month’s column, I described how the propagation of computers sparked an explosion of information and access that radically changed the supply and demand economics of media, and shifted the balance of power between publishers and consumers. We live in a turbulent time, beginning the second of perhaps three decades during which the business of media will change more than it ever has in history. Old media companies are dying, or attempting to adapt. New media companies are arising and attempting to survive. Information has become bountiful, somewhat to creators’ unease, but to the pleasure of consumers.
Yet all that information is remains poorly distributed, is seldom delivered automatically, and is even more poorly transacted online. An online consumer has nearly instant access to almost any type of information from anywhere on earth, but finding that information is usually a chore. Though armed with the Internet’s 20th century technologies, we’re still hunter/gatherers in this new information world. You might find the precise mix of information that suits your individual needs online if you hunt hard enough, but you must hunt for it each time. Nothing yet automatically and routinely delivers that precise mix to you.
The best you can do online today is to try assembling your individual mix from parts you acquire by hunting (via search engines and visiting news or special interest Web sites, blogs, or UseNet Newsgroups), and some parts that might arrive via email or RSS. It’s a slapdash, uncoordinated way to feed informational needs in the 21st century.
If you also create content or want to sell (advertise) a product or service, you have online access to an entire world of potential consumers, but you don’t really know whom or how many are actually interested. The world may be wired, but not yet with any practical infrastructure for selling content at the price points the new supply and demand economics dictate, and with the reciprocal rights and protections both content creators and consumers demand. Despite online media’s potential to exactly target content (and advertising) to only those consumers who are actually interested, online media still don’t work much better than traditional media.
Most of those problems will begin to disappear over the next 10 years. Everyone is beginning to realize there must to be a better way. Companies and movements will evolve or emerge to solve those problems. It won’t be easy. Creating a universal infrastructure that solves all those problems is much more complex than it appears. It will take a generation’s time to solve and will require unprecedented cooperation among corporations and among governments. Yet it will be done because the need for a better content selling market demands it.
This universal infrastructure will require two separate foundation layers: one to match buyers and sellers, the other to make transactions.
The first layer will be a swarming peer-to-peer (P2P) system to match consumers’ interests and creators’ content. It will be P2P due to trust concerns. Consumers know they can benefit by having their interests and desires matched, but they obviously won’t trust any one company or conglomerate with such sensitive information. They won’t likely disclose that information to any centralized system.
P2P allows much better content micro targeting than traditional newspaper, magazine, radio, TV, and portal sites can. It allows each consumer (his device, actually) to broadcast his individual interests and seek all creators that precisely match not only these interests, but also requested levels of credibility, etc. Credibility is a concern not only because some content creators could be less than authoritative, but also because some could spam, or intentionally mismatch content. This P2P system will require a way to rate each creator’s credibility.
Creators, meanwhile, will have reciprocal use of this system. They will broadcast their content offerings and may be able to blackball consumers who spam comments or discussion boards, or who defaulted on paying for rights management.
My bet is this P2P layer will be enabled and promulgated by smart mobs or startup companies, not by traditional media companies. The latter group will resist adapting to the change as long as possible.
The other layer of this foundation will be transactional. Total P2P can’t work there because cashless payments may require some centralized processing, even if only by an interbank system. This layer requires several specific attributes to work online universally.
It must be capable of transacting any amount, from micro to macro. Today’s credit card systems won’t transact micro (less than $1) amounts. The technology can, but the legacy business models won’t. Nevertheless, major credit card companies that process billions of dollars in macro transactions daily aren’t about to be replaced by micro-transaction startup companies. They’re actively seeking to adapt their business models to micro transactions without jeopardizing their macro revenues. I expect by 2014, they will adapt.
This layer must also be capable of transacting payments by any fungible means, accepting payments by credit and debit cards, checks, money orders, third-party invoice billing to telephone or cable modem bills, and handling any nation’s convertible currency. Not everyone will want to pay using only the Discover Card or PayPal.
It must also use virtual tokens. Not the subway type, but something resident in your computer that lets you avoid typing 13 to 16-digit credit card numbers, plus your name and address, whenever you want to make a macro or micro transaction. Transactions must be nearly effortless, particularly micro transactions. A payer must grant consent, but not jump through hoops.
This transactional layer must properly transact not only money, but also DRM and consumer privacy. As a creator, you want to know who’s using your content and how, and you might want to place restrictions on that use. As a consumer, you want to know who’s had access to the data about what you’ve seen or purchased, and you might want to place restrictions on that access. In either case, you believe you own the information and want to control it. DRM and consumer privacy are thus two sides of the same coin. Handling that coin will involve governmental regulations and oversights. A basic (albeit flawed) system for dealing with those concerns already operates in the credit information markets. The transactional layer can approve upon that.
All these problems won’t be solved by 2014, but the basic foundations for 21st century publishing, broadcasting, advertising, and paid content will be in place. If you think there’s a lot to be done, just consider the changes made since 1994. Look forward.
Programmatic is taking over the digital advertising world, and at an even faster rate than expected, according to eMarketer, which raised its forecast for programmatic ad spending in the U.S. on the back of growth in mobile and video programmatic buys.
Election 2016 is already like no presidential race before it, and one of the most striking aspects of this year’s race is the disparity ... read more
Video consumption keeps increasing and Facebook is serious about a video-first world, encouraging us all to explore its full potential. Ian Crocombe, ... read more
Mike Andrews Ph.D is Chief Scientist (Forensiq) at Impact Radius, and is carrying out some fascinating work around digital marketing and ad ... read more