Saturday, October 10, 2015

Eating the internet

Probably not a good idea for one or two companies to own basically all of publishing.
Facebook is basically saying, transform your publishing operation into a publication on the Facebook platform. At the end of that story is that your business and business model becomes at the mercy of Facebook's business model and strategic decisions. And if you now get the whole advertising pie, somewhere down the road maybe 30% or 40% of that pie is going to go to Facebook. So Facebook, because of the network effects of their platform and its success at stitching together individual relationships between people around the world, may now be able to engross a third of the revenue of the entire publishing industry even though it has no exposure to the costs of producing the content that that revenue is based on.
A decade ago, the great promise of the internet was here was a tool that allowed for independent, unfiltered mass communication available to practically anyone at very low cost. Facebook's strategy during the last part of that decade has been to become the mediating filter we were all so happy to be rid of.  They're only just beginning to get to where they can demand rents based on that position. 

No comments: