peer-to-peer-delivery

From economical point of view we have faced three main epochs for content distribution.

The first epoch starts with the invention of printing press by Johannes Gutenberg circum 1440. This was the epoch of “hard copy” content, where physical means were needed for distributing and delivering content to a client. It was not a problem to get paid for a content that days: physical contact and exchange was anyway required, and money was paid “hands to hands”. The same format of content-monetary exchange was used not only for books, but for other forms of media: music (vinil and other types of disks), video (movies on film, later – on CD/DVDs). So, the question here is not about the medium: it could be vintage like hard book, vinil disk or film, or it could be digital like CD/DVD; the question is about ways of delivery.

A new epoch began with Internet revolution: starting from 1990s large producers become able to deliver content by non-physical means: via a “wire”. The change brought by the epoch was very similar for the changes in other industries where “wire” transfer had appeared before that: finance (SWIFT network for wire transfers), news (teletype) and document workflow (telefax). The point here was not about digitalization (content still might have been and sometimes was analog), it was about ability to transfer information without moving something “physically”.

The revolution had two consequences: dramatic decrease in delivery prices and elimination of problems with monetary exchange. Unsurprisingly Internet as a channel for content delivery boosted non-physical payments; specifically, payment cards industry. This was accompanied (preceded) with another wave of drastic changes in the industry: digitalization. Digitalization reduced costs of copying data, giving ability to sell the same thing over and over again without any significant additional costs. Originally digitalization and Internet jointly led to boost in profit margins for content distributors (labels and so forth), but it was not a sustainable model. Companies were forced by competition to reduce their margins and large digital content markets, created by Amazon, Apple and Google, captured the scene leaving old labels behind. However, business strategy of new game makers wasn’t stable as well.

Technology has created opportunity for a new type of media business to appear: peer-to-peer exchange. It all started from Napster, then came to torrents and now ends up with blockchain technologies – and this is a new, third epoch for content distribution. The main challenge on a way of the new epoch was an absence of payment technology to match the new way of peer-to-peer content consumption. The situation is pretty much like we had at the dawn of the Internet epoch, when companies were struggling to make money in the Internet since the payment industry hadn’t adapted to the changes at that time. However, just like e-commerce has blossomed with PayPal and with the ability to use payment cards online, P2P content businesses will rise with a new way of efficient payments. This new way is Smart Contracts.


Also published on Medium.

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