Traditionally, Internet-based companies have three basic ways of making money – selling physical goods, selling real-world services, or advertising. You can tell when an Internet company with a bold new business model starts sinking – they have a sudden turn towards advertising. That is not to say that advertising is a bad business model, just that it should not be the bread and butter of an Internet company. However, advertising is more bread than anything else – plain, filling, but not very satisfying. If there is butter to be had online, it is and has always been digital content.
Free markets have been around for some time, but digital content is a different beast than physical product – scarcity is a foreign concept to a digital file. If there is a scarcity, it is bandwidth. High definition content hogs precious Internet tubes – which is why most of what you see on the Internet these days is very low definition. Small artists can’t afford the bandwidth, nor can small companies. There is however, as Apple has so gracefully demonstrated, a market out there for digital content… however rocky the playing field may seem to individuals and small companies.
The open source Bitmunk Transaction Platform levels the playing field – it allows anybody to create their own online music, television or movie store – the digital content is included. Anything that has the rights cleared on Bitmunk is available for sale. That is powerful because now anybody can compete in the digital content realm with the likes of Apple and Microsoft with a couple of hundred dollars and a good idea.