Tuesday, March 27, 2007

Winners & Losers

The media and entertainment market has been and will continue to be shaken up considerably by web 2.0. We have only begun to see the beginnings of the vast potential the web platform will provide. The question remains, what will the shakedown look like when it is completed? And how, exactly, will the money be made?

My best guess:

Winners: Google & Apple. They both understand the customer's need for convenience (search), that the true value lies in the content (aka data), and they currently have the innovative culture & resources to deliver cutting-edge solutions. Also key: they do not need to protect the old model's revenue stream since they were not a part of the old model.

Losers: The record labels. Web 2.0 provides validity through an emergence rather than design. The core value proposition for record labels was to provide the filter that web 2.0 no longer requires.

Business Model: Customers pay either per download or on a subscription system. A royalty is paid for each download to the content author and advertisements will supplement.

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