nettime: Re: What is New Media?

[Felix Stalder <stalder@fis.utoronto.ca>]

Push, Pull and New Business Models

The first euphoria is obviously over, even the enthusiasts are starting
to realize that in Cyberspace not everything is as different they hyped,
but, as more people come on board, it starts increasingly to look like
the rest of the world. For business this means that most of the
investors want to know where profits will come from before they put down
the money. While Netscape hit the right moment when it was possible to
turn hype into money and promises closer to reality, WIRED sadly missed
the opportunity and has not been able to cash in by going public. It is
not so much ãnew mediaä in general but WIRED in particular that is
looking for a new business model.

Indeed, it is more difficult to make money within Cyberspace than most
people thought, mainly because money as we use it is somewhat inadequate
for what happens on-line. Even in its current electronic form (credit
cards) money represents primarily the static possession of goods, ideal
to buy a bottle of wine or a book. On the Net, however, things are,
evidently, a bit different. The prime activity here is not so much the
trading of limited commodities but the connection of people through
flows of information. And right now, there is hardly any idea how to
charge for that. 

While electricity may be a good metaphor for a new type of money,
flowing as one uses the service, it is inapt as a business model since
the utilities only have to measure the traffic for they alone provide
the content. On the Internet content and traffic are not the same and
therefor the situation is more complicated. The basic requirement for
valid business model are new means of payment, reflecting the gradual
change of what constitutes worth, from possession commodities to
specific types of relations between people.

New forms of payment, however, are not invented over night and it is
likely that the current hype will not live long enough to see their
arrival. Nevertheless, it would be a capital mistake to assume that they
will not come at all. All major financial institutions are investing big
bucks in research and first large-scale tests are currently conducted.
MONDEX, for example, has just started its second pilot project; after
testing its smart-card system in Swindon, UK they moved to North
America, using the provincial town of Guelph, Ont as a remote testing
site. 

While it is yet undecided which of the systems will set the standards,
new forms payment, turning use-value into exchange-value, are the single
most decisive factor for the rise of new business models and their
social impact. How and under what conditions we are going to
pay--whether there will be some sort of privacy or not, whether the
technology will be controlled by private corporations or by at least
somewhat accountable public agencies--will influence the quality of
(on-line) life much more than the question whether we will pull or push.

Felix
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