It must suck to be the middle-man today. Everywhere they turn, it's bad news. Democratization this. Circumventing that. There was a point not that long ago that the middle-man provided great value. The record companies brought music to the masses. The media created channels for the news to get through. The Blockbusters of the world housed thousands of movies for people to rent. Telephone companies laid the lines for us to connect with one another around the world.
But now these middle-men are our modern villains - using every desperate trick in the book to hold onto customers while we find creative ways to go around them, go straight to the source and sometimes just do it ourselves. There is a mass disintermediation going on and every company that occupies the mediator position is at risk. Now it's the media, the labels and the distributors of what has become digital content, but I doubt this will be the last frontier of democratization. I'm sorry to say it, but they are bringing it on themselves.
- They forgot that the point of being the middle-man is, well, to be the middle-man. They made it about themselves. The musicians and the audience were forgotten in the shuffle. The news and the readers stopped mattering. The fact that people just wanted to connect via phone ceased to be part of any business plan. Profits became bigger than the people they needed to connect.
- Convenience, which was once the advantage of using a middle-man, turned to inconvenience. Frustration set in when the middle-men became gatekeepers and 'deciders'. They became greedy. Power hungry. And they reminded everyone that they were going to play by the rules that they set. Period.
- They misread the early signs of democratization as a threat rather than an opportunity. All could have been forgotten if they had just realized that their impetuous children were neither impetuous nor children, but instead were giving really great cues on how they wanted things to work.
- A false sense of scarcity is not a scarcity at all. Creating a business model on charging premiums for something in abundance (or potentially readily available) is bound to crater.
- They seriously underestimated the intelligence of the public. Maybe they believed their own lies or maybe they just thought we couldn't think for ourselves. We may be lazy from time to time, but we aren't stupid. And we don't like being belittled.
And so the scare tactics have been amplified, the sob stories are rampant and the battle has turned to an all out war. People getting sued at $16,000 per song for illegal downloads and the Anti-Counterfeiting Trade Agreement (ACTA) are some of the obvious examples, but everytime I look at my phonebill and see the newly minted extra charges, I can't help but feel like my phone company is punishing me. I don't want to see journalists out of work. I don't think it's their doing that the media companies are in trouble. But the layoffs are breaking my heart.
And it's only really beginning. We are at a turn. A shifting of an era. Entirely new business models were created during the Industrial era. These business models were created to help manage, distribute and promote to the masses. When everything was local, we did this through relationships. It was easy to manage on our own. But the internet allowed for inexpensive and simplified management, distribution and promotion for all. Farming these things out only makes sense if it truly brings value such as: convenience, money saving and peace of mind.
I can only imagine where it goes from here. What else is going to be disintermediated as we gain more tools of control and simplification? Banking? Law? Public services? We've pretty much lost the travel agencies. Authors are self-publishing and more tools are available for distribution. Amateur movies are cheaper and simpler to make and are getting more attention. People are finding ways to go direct to farmers for their food.
It's nothing to be mourned, but it is something to be heeded. Eras come and go and change happens. I read somewhere that only 1 of the original Dow Jones companies still exists and I'll bet it exists because it looks nothing like it did back when the Dow Jones was born. (That would be General Electric - thanks David Damore!)
There is new intermediation needed. It has to do with helping us cut through the noise and get to the signals and it needs to be individual-driven. Things like Project VRM should be at the top of everyone's radar. Finding new business models to further democratize badly managed industries is also a good bet. Either way, I'm looking forward to the changes and I'm open and ready for them.