A coworker of mine recently bragged about having downloaded 400GB of movies and stuff for free and perfectly legal. Yeah, whatever. But it got me thinking about the economics involved and my conclusion is that, basically, it does not work. Let me just define three groups of people that make up the internet: The users: You and me. ISPs (internet service providers): The users are hooked up to these firms. The content providers: The firms that makes the stuff we want to see and hear. Then there are the cash flow. The users pays the ISPs for the connection. The faster the connection, the more expensive it is. The amount of money a user pays are somewhat proportional to how much data he downloads. If the user does not pay the bills, the ISP cut him off. They can do that because they control the wire (or fiber or wireless modem or whatever). A content provider must also hook up to the internet and must pay the ISP for that. Let's say the content provider is Disney in this case. They have made a nice animated movie and wants to sell it to people. The user now has to pay Disney directly over a somewhat insecure connection and download the movie. So far so good. But this does not work due to the very nature of data. Data can be copied with no loss. So some dude rips the movie and shares it with 20 friends. This ruins Disneys income. In fact, all the content providers are going bankrupt due to piracy. This is why they lobby for laws to protect themselves. You know the whole spectacle, suing random people, trying to get websites closed etc. They also invented a new format called blue-ray in order to make movies bigger and therefore harder to download. That did not really work either. The content providers are now screwed and they know it. Then there are the content providers that try to make money with adds. Some of these are for other websites. This is like a town where the only profession is hairdressers. Everybody's tries to make a living by cutting each others hair. It does not work. Some adds are for real life products. That is all well and good, but adds alone can not support a big budget movie like those Disney make. The only people that makes real money off the internet is the ISPs. The users pay good money to get on the internet and the ISPs can make them pay or cut them off. But the user is not really interested in the wire. It's the stuff at the other end of the wire that is interesting. The user is willing to pay real money for a fast connection ONLY BECAUSE there are worthwhile content at the other end. In my view, the ISPs are UNGRATEFUL to the content providers. The ISPs should be paying the CPs for creating stuff that makes the users want to get a faster connection. And they better start doing it, or the CPs will go bankrupt and leave the ISPs with a wire from the user to NOTHING. And what user would pay for that? The ISPs should start paying the CPs based on how much traffic they generate. After all, the ISPs make money off this traffic. This is what I have sketched below. In the lower scenario, the user only pays for the internet connection and the ISP passes some money to the CPs based on how much traffic they create. In the case of the Disney movie, it would be how many downloads it got. There is no need to pirate anything in this scenario. Why would you, when you can just download the movie directly from Disneys official homepage for free? Notice that the cash flow goes opposite the data flow in a logical way. How can this be achieved? 1)The CPs buys the ISPs 2)The ISPs buys the CPs 3)Some kind of deal is made between the two. So to sum up: The current economic model for the internet is not working, this much should be obvious. A new model is needed. The ISPs need to realize that they are sawing off the branch that they are sitting on. The CPs need to drasticly re-think their business model. Thoughts?
Granny says, "Now don't ya'll go clickin' onna pixels or ya liable to see her steppin' outta the shower... Hacking Used to Create Detailed Map of the Internet March 23, 2013 - An anonymous researcher has used illegal hacking techniques to create what some are calling the most accurate map yet of the internet and internet activity.
But Disney in this case had the movie made, released it I assume to theaters and say they made their money to produce it back plus some DVD sales, since not everyone will hack the movie some will buy them or sell or show the movie on say Netflix. So who cares if some or many people hack the movie the company made their money back breaking even very likely with a profit which is just smaller not lost. And if the model isn't working how then is the internet thriving in the US?
Citadel botnet bust considered successful... Microsofts botnet bust hailed a success Sat, Jun 08, 2013 - CYBERCRIME: The network of infected PCs was used to steal money from financial organizations on a massive scale, as well as spamming and disrupting networks
Over half of world still not connected to internet... More Than Half of World's Population Still Not Connected to Internet May 17, 2016 According to the World Bank, 9 billion devices are connected to the internet today, but more than half of the world's population is still not connected.
