Napster, LimeWire, BitTorrent, Azureus. Mean anything to you? Years after their heydays, they can serve as either a lesson or a warning.
As previously outlined, I’ve been thinking a lot about the swath of destruction the pandemic has left through small businesses. And how important e-commerce will be to companies going forward. Not just embracing the online marketplace, but also the flexibility and creativity to thrive in it.
We’ve weathered sea changes in consumer behaviour and e-commerce before. Let’s face it, when it became possible to buy a lot of things that had evolved into digital formats online, we didn’t necessarily do so. We still acquired stuff. We just didn’t buy it.
Peer-to-peer file sharing services like those listed above certainly had something to do with it, but were a reaction, not a cause. I think we’re in a reactionary period now, thanks to the pandemic, and things will be evolving for some time.
Over the last 15 to 20 years, we’ve learned a lot about sustainable ways to do business online. But some still refuse to look beyond bricks-and-mortar ideas of how businesses should be built and how consumer relationships should work, even if the bricks have long since been replaced with clicks.
Traditionally, we’ve been more willing to pay for some things online than others. It’s also just been easier to get some things online than others. To copy and distribute digital files doesn’t cost much more time, effort or cash to do a million as to do one. Compared to, say, a hardcover book or a pizza. (Amazon and Pizza Hut were the first to offer online ordering in 1994.)
If you want people to pay you for something they can easily get by not paying you, it behooves you – and your future cash flow – to put at least as much thought into how to make them want to pay you as how to make them have to pay you.
Perhaps an even more influential driver behind pirating, though, aside from being easy and free, was the contentious relationship between producers and consumers. The industries that took the hardest hit from pirating – movies, music, etc. – long had an iron grip on production, distribution, even censorship.
For the mainstream, they controlled not only what we could get, but in what forms, and how much we had to pay for it. It should also be noted that the talent actually creating this content frequently did not much benefit from the massive revenues being generated by this model. Unfortunately, to a very large degree, they still don’t.
Those industries chose to fight very hard for a very long time to retain, then regain, their status quo, rather than invest resources into evolving. Remember confused little old ladies getting slapped with massive downloading fines? Newspapers have been guilty of this fatal obstinacy as well.
I couldn’t tell you the number of times I’ve heard people say that they’d be more than happy to pay for X or Y if they were only given a reasonable option to do so. Reasonable meaning not getting screwed over with non-negotiable bundles of stuff they don’t want, non-optional subscriptions and endless add-on fees.
Dear cable companies: Folks just want their HBO. Dear everyone else: Do not require a credit card for a free trial.
As a friend succinctly noted, it was a mistake to apply meatspace rules of monetization to the internet. But then, big business has often historically been reluctant to embrace agility or creative thinking while revenues from the traditional model are still rolling in.
What finally caused a considerable reduction in torrenting? Good streaming services with substantial inventory, flexible account options and reasonable prices. Now, sure, some people have still gamed those systems, too, but millions of us have still signed up. Certain premieres have even become must-see-TV, and FOMO is a far more powerful motivator than legal threats from faceless conglomerates.
Apps and gaming fumbled initial online forays as well in a number of ways. Freemium models and in-app purchases have matured substantially, but weren’t ubiquitous earlier on. They were largely a response to a poorly designed and executed business model.
There were throwaway games and apps that were free, and arguably should be. But there were also offerings where distributors wouldn’t allow producers to charge enough for solid products to remain in business.
There were apps that were initially free, but didn’t offer a reasonable trial period or path to upgrading. On the flip side, there were throwaway apps that cost $20, and you had no way to really find out if they were worth it before downloading. ($20 for an app or game felt like a lot back then. Especially if you had to rely on your parent’s credit card.)
Before Steam and similar services, games had to be purchased on actual discs, from a store, and could cost $80 a pop. But once you had the choice between a physical copy and a digital download… they were still the same price. E-books are still similar in a lot of ways. Libraries generally still have to loan out e-book copies to one person at a time, which beggars all logic… unless you’re a publisher.
So how does this meander through e-commerce foibles and criminal nostalgia help us figure out how businesses can be better prepared now for the future of small business? Well, no question we have gotten more used to buying things online. Amazon and the like made it easy and convenient.
For a long time where all that stuff came from (and went when we were done with it) and how it got to us was pretty much invisible, so why would we care?
Perhaps the biggest lesson that we are still learning is about the real cost of things, both literal and perceived. Consumer understanding of where our stuff comes from and what the global cost of our consumer goods truly is has been evolving and growing, too.
We’ve learned – or can readily do so – about the global supply chain, labour conditions, environmental degradation, even the political tap dance of relying on countries with whom we may not always have the most sympatico relationships.
Compare all that to what small businesses do for our local communities and economies, as I discussed in the last column. (And make of this news what you will.)
Keep that “meatspace mentality” in mind, though. If what you have to sell lends itself well to being sold online, shipped, etc. – great! You can focus more energy on developing great products or services, creating amazing customer experiences, developing partnerships, and getting people to know who you are and what you do.
When we can get just about anything delivered with ludicrous speed right to our doors, how does one impress nowadays? What makes us start to want to become repeat customers? How does one create a welcoming ambience without a physical store?
These are the nooks where the next great evolution in consumerism will germinate.
M-Theory is an opinion column by Melanie Baker. Opinions expressed are those of the author and do not necessarily reflect the views of Communitech. Melle can be reached on Twitter at @melle or by email at me@melle.ca.
