The internet is a massive engine of creative destruction. Historically, one of the biggest problems in commerce was information. Giant businesses were created to leverage economies of scale for information gathering and dissemination. Newspapers, magazines, publishers, radio and television stations, advertising agencies, real estate agents. Gatekeepers of creation and expression. They provided a valuable service.
The Internet is destroying them all.
Old business models die hard. Newspapers are dying, TV stations have fewer viewers each year. The death throes of the record industry are legend. The movie industry is failing. Like clockwork, each generation of Moore’s law takes another layer of middlemen out of the picture. The ultimate end brought by the Internet will be a one to one relationship between creator and consumer with no one in the middle.
The Internet is disintermediation.
With no need to print books on dead trees, and your book available to the world with a click of a button, the publishing industry is dying. When anyone with a few hundred dollars of equipment and some talent can produce a song in their garage and sell it directly on the Internet, the record industry is dying. The same thing is now occurring in video. Equipment is so cheap that ANYONE can make a movie these days. You don’t need a Hollywood studio. Your movie will probably still suck, but who cares? You didn’t need anyone’s permission to make it. Need to sell your house? List it on the Internet for free. No need to pay 6% to an agent.
Yet the dream of making a buck off of someone else’s work still lives on. Would be middle men pop up all over the Internet. Self proclaimed gatekeepers with grandiose claims and underpants gnome business plans try to convince others to provide them with free labor. Their slick story and promise of future benefit is rooted in the old pre-Internet models and it sounds good because we still haven’t internalized the new reality. “Hey blogger, contribute articles to our site and you’ll get added exposure and more traffic!” Unfortunately it never works that way. The blog aggregation site benefits from the content and the traffic and the blogger gets jack and squat.