Distributor-Manufacturer conflict and struggle for power is not new. Only now we have media content providers and tech distributors like Google and Wikepedia in conflict over SOPA.
It's quite amazing that once a manufacturer has a great product the tendency is to believe that you don't need marketing. Notable exceptions include Apple and the retail frenzy in China with the iPhone 4S. The late Steve Jobs knew that he had a great product – so why invest in fancy stores in in expensive malls with Apple stores ? The answer is distribution or place the most un-exciting of the 4 P's of marketing! The late Steve jobs wanted a place in the mall while Rupert Murdoch is enraged at Google for being able to earn money from advertisements based on "stolen" content. Apple retail stores in China are not able to stop the scalping by enterprising retailers just as in the US you'll get almost anything on eBay.
If you are a content producer (like TV content,movies, music,newspapers,magazines,books,blogs) that can be digitized – your distribution has zoomed in the digital age. With this the challenge of getting paid for producing content has also escalated. Revenue streams for content producers are evolving and here are the some interesting ones:
- Amazon.com as a bookseller is far more powerful than authors and publishing houses. The 79$ Kindle comes with advertising – another revenue stream for Amazon. Publishers and authors can't complain because they are selling more copies via digital content.
- iTunes is able to get some money back to the musicians,recording industry.
- Netflix and movie studios are constantly trying to re-work the revenue model.
But it's Google and Google AdWords that annoys Rupert Murdoch. Google has figured out a way to provide the most relevant search results to the Internet searcher. Remember, all Wikipedia pages do not feature at the top of Google results – the best answers to your search queries do.
It is this ability of Google (and other search engines Yahoo,Bing) the distributor of information who works for the consumer and not for the manufacturer that has really reversed the value chain from
Consumer—-> Search engines—-> Content (Manufacturer)
The revenue model for content producers is still evolving but throttling the Internet with SOPA is not practical in the digital age with social media. Contact StratoServe.