Felix Stalder on Thu, 11 May 2000 18:47:11 +0200 (CEST) |
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[Nettime-bold] Re: <nettime> a nyt article on freenet and gnutella |
[It's important to remember that we haven't seen much yet when it comes to new business models on the Internet. Amazon.com certainly isn't very innovative (it's mail order on steroids, that's why everybody understood it immediately). A bit more "native to the Net" is eBay which is hampered by the fact that there is no easy way to exchange money between people over distance. Credit cards are based on a structural distinction between buyer and seller which doesn't apply to eBay. Clumsy circumvention technologies, such as Paypal.com, speak of the need to create new types of exchanges (including exchanges of monetary value). Just imagine what something like nastier could if coupled with a micropayment system. Right now, the main reason why, say, bands need the recording industry is, besides marketing, that they have no other way of getting money for their records. As long as this problem is not addressed, new ways of distribution won't do much. The same applies to publishing and other industries. As long as authors are dependent on publishers to get their royalties, they have very convincing reasons to be loyal to them. Felix] http://dailynews.yahoo.com/h/zd/20000508/tc/napster_could_it_threaten_net_strong holds__63.html <...> Napster's real importance Perhaps the greatest shame of the whole Napster debate is that the focus on MP3s and the recording industry obscures the real issue. Napster's fundamental architecture has the potential to destabilize many of the accepted premises that underpin the Internet. At its core, by independently connecting computers across the Internet, Napster enables the creation of a distributed, disembodied marketplace. This marketplace has no center and no owner, just a shared group of participants. This idea of a decentralized marketplace runs counter to much of the thinking behind many Internet marketplaces both in the consumer and business-to-business sectors. After all, companies are spending hundreds of millions of dollars creating centralized marketplaces founded on the premise that customers need a single, central destination. However with software, such as Napster's, the need for a centralized marketplace is greatly diminished, and in some cases possibly eliminated. Just look at the MP3 sites. Prior to the advent of Napster, numerous sites flourished as centralized marketplaces where consumers could download/trade MP3s. One of them, MP3.com even went public. However, with the advent of Napster, marketplaces for MP3 files were instantly commoditized. Original MP3 marketplace sites have either gone out of business or have hastily repositioned themselves. Napster everywhere Taking the idea of Napster a step further, what's to prevent someone from creating the Napster of consumer auctions. If the Napster approach hit auctions, how could the existing auction players such as eBay, Amazon.com or Yahoo! hope to compete? For that matter, what's to prevent someone from creating Napster-like programs that take on the numerous players currently creating business-to-business exchanges? The short answer is nothing. There's nothing to stop programmers from adapting Napster to a wide variety of applications, each of which will challenge the site-centric thinking that predominates on the Internet today. The death of network effects? In some cases Napster's architecture fundamentally undermines one of the crown jewels of Internet stock valuation theory. This theory holds that Internet marketplaces generate network effects as they grow in size. These effects in turn accelerate the growth of the marketplace and make it almost impossible for competitors to catch up. As it stands, the network effects generated by sites such as eBay are thought to be so powerful that it is almost impossible for these sites to be unseated. However, Napster's fundamental architecture and its impact on the MP3 market suggests that network effects are much more fragile than suspected. If this is indeed the case, some of the premium valuations that are enjoyed by both consumer and business-to-business marketplaces could come under pressure. Investors may begin to fret that they too will feel the powerful, distributed sting of Napster. Whatever happens, one thing is clear. The impact of Napster will be felt far beyond the confines of the record industry's executive suites. Indeed, Napster and its offspring are only in the early stages of a revolution that will likely impact boardrooms and stock markets across America. ------------------------------------------ Les faits sont faits. http://www.fis.utoronto.ca/~stalder _______________________________________________ Nettime-bold mailing list Nettime-bold@nettime.org http://www.nettime.org/cgi-bin/mailman/listinfo/nettime-bold