Digital Distributors vs Open Web: who will win?

I've spent a fair amount of time thinking about how to win back the Open Web, but in the case of digital distributors (e.g. closed aggregators like Facebook, Google, Apple, Amazon, Flipboard) superior, push-based user experiences have won the hearts and minds of end users, and enabled them to attract and retain audience in ways that individual publishers on the Open Web currently can't.

In today's world, there is a clear role for both digital distributors and Open Web publishers. Each needs the other to thrive. The Open Web provides distributors content to aggregate, curate and deliver to its users, and distributors provide the Open Web reach in return. The user benefits from this symbiosis, because it's easier to discover relevant content.

As I see it, there are two important observations. First, digital distributors have out-innovated the Open Web in terms of conveniently delivering relevant content; the usability gap between these closed distributors and the Open Web is wide, and won't be overcome without a new disruptive technology. Second, the digital distributors haven't provided the pure profit motives for individual publishers to divest their websites and fully embrace distributors.

However, it begs some interesting questions for the future of the web. What does the rise of digital distributors mean for the Open Web? If distributors become successful in enabling publishers to monetize their content, is there a point at which distributors create enough value for publishers to stop having their own websites? If distributors are capturing market share because of a superior user experience, is there a future technology that could disrupt them? And the ultimate question: who will win, digital distributors or the Open Web?

I see three distinct scenarios that could play out over the next few years, which I'll explore in this post.

Digital Distributors vs Open Web: who will win?
This image summarizes different scenarios for the future of the web. Each scenario has a label in the top-left corner which I'll refer to in this blog post. A larger version of this image can be found at http://buytaert.net/sites/buytaert.net/files/images/blog/digital-distributors-vs-open-web-who-will-win.jpg.

Scenario 1: Digital distributors provide commercial value to publishers (A1 → A3/B3)

Digital distributors provide publishers reach, but without tangible commercial benefits, they risk being perceived as diluting or even destroying value for publishers rather than adding it. Right now, digital distributors are in early, experimental phases of enabling publishers to monetize their content. Facebook's Instant Articles currently lets publishers retain 100 percent of revenue from the ad inventory they sell. Flipboard, in efforts to stave off rivals like Apple News, has experimented with everything from publisher paywalls to native advertising as revenue models. Expect much more experimentation with different monetization models and dealmaking between the publishers and digital distributors.

If digital distributors like Facebook succeed in delivering substantial commercial value to the publisher they may fully embrace the distributor model and even divest their own websites' front-end, especially if the publishers could make the vast majority of their revenue from Facebook rather than from their own websites. I'd be interested to see someone model out a business case for that tipping point. I can imagine a future upstart media company either divesting its website completely or starting from scratch to serve content directly to distributors (and being profitable in the process). This would be unfortunate news for the Open Web and would mean that content management systems need to focus primarily on multi-channel publishing, and less on their own presentation layer.

As we have seen from other industries, decoupling production from consumption in the supply-chain can redefine industries. We also know that introduces major risks as it puts a lot of power and control in the hands of a few.

Scenario 2: The Open Web's disruptive innovation happens (A1 → C1/C2)

For the Open Web to win, the next disruptive innovation must focus on narrowing the usability gap with distributors. I've written about a concept called a Personal Information Broker (PIM) in a past post, which could serve as a way to responsibly use customer data to engineer similar personal, contextually relevant experiences on the Open Web. Think of this as unbundling Facebook where you separate the personal information management system from their content aggregation and curation platform, and make that available for everyone on the web to use. First, it would help us to close the user experience gap because you could broker your personal information with every website you visit, and every website could instantly provide you a contextual experience regardless of prior knowledge about you. Second, it would enable the creation of more distributors. I like the idea of a PIM making the era of handful of closed distributors as short as possible. In fact, it's hard to imagine the future of the web without some sort of PIM. In a future post, I'll explore in more detail why the web needs a PIM, and what it may look like.

Scenario 3: Coexistence (A1 → A2/B1/B2)

Finally, in a third combined scenario, neither publishers nor distributors dominate, and both continue to coexist. The Open Web serves as both a content hub for distributors, and successfully uses contextualization to improve the user experience on individual websites.

Conclusion

Right now, since distributors are out-innovating on relevance and discovery, publishers are somewhat at their mercy for traffic. However, a significant enough profit motive to divest websites completely remains to be seen. I can imagine that we'll continue in a coexistence phase for some time, since it's unreasonable to expect either the Open Web or digital distributors to fail. If we work on the next disruptive technology for the Open Web, it's possible that we can shift the pendulum in favor of “open” and narrow the usability gap that exists today. If I were to guess, I'd say that we'll see a move from A1 to B2 in the next 5 years, followed by a move from B2 to C2 over the next 5 to 10 years. Time will tell!

Comments

David (not verified):

Funny thing is that this is kind of repeating history. Older folks may or may not recall AOL's great era around 95~99. This was my personal first bigger touching point with the open web (it was not too easy to reach there from within the walled garden, but hey) and actually with "connected" at all.

The simple magic in AOL's client (in many ways, except probably beauty) was to turn the actual bug (i.e., extremely limited share of all available information) into a feature ("everything in its place, tidy, not or hardly redundant"). Very much like even current and merely open projects do (looking at e.g. Ubuntu). In other words: The neatly fenced AOL garden was a perfect place to get used to the "connected" thing - in the first place.

Discovering the open web was, aside of some AOL-specific implications, not on my agenda - until I learned there was something out there AOL would never provide or if they did, not in the fashion I considered convenient. TL;DR, not before getting used to "connected" in general, I felt "strong enough" to hunt for added value (or what I considered such).

That said, I am also optimistic for the open web, actually more than ever. This is mainly for I (figure I) can estimate the limits of the current fenced communities. Ridicule if you will, but to me Facebook ain't more than AOL back then, it rather seems less. The only difference I can see so far is the timing. AOL was too early. Facebook is what AOL wanted to be, and the billions of mainstream users now are little different from those vanguards 20 years ago. IMVHO, they just need the scent of additional value and they will start reconsidering. Who would have seen ebay in the crisis it is obviously in, say, ten years ago? Why would it be different with Facebook et. al.?

So what "we" (sharing the same business in some ways, i.e. open web) need to focus on is the said added value. Let's not stick to "web pages", but do even better interfaces, APIs, semantics and whatever m2m and "web of whatever-realworld-stuff" takes. And as "they" are aggregating "us", let's use "them" to attract user's to outside their garden fences. The world's FBs are big, which makes them slow. Let's stay fast and behind a moving target. That should do it, even more with Symfony in "our" back. Just my 2 cents.

Sorry for the Textwüste. Cheers.

August 25, 2015
Dries:

I was never an AOL user but I'll take your word for it. :) I love what you wrote in the last paragraph and I'm excited to help add value to the Open Web. Thanks for your input, David.

August 25, 2015
giorgio79 (not verified):

I find some issues with the definitions here. Of the digital distributors you list, users provide content to Amazon and Facebook, not the web. Only Google scrapes content. Also, would you have a definition of the "open web"? On the web, even "Open Publisher" aggregates information, just on a smaller scale. A newspaper collects happenings, a science blog collects science info etc. We are all aggreagators in a sense. :)

August 26, 2015
Chris Wells (not verified):

Yet another really inspiring post on the Open Web, Dries. Thanks. It's great to see you focusing on this topic. I think it's important, both from a technical perspective in relation to Drupal's future, as well as in terms of freedom online and the free web.

Out of curiosity, what do you think about the IndieWeb movement (http://indiewebcamp.com) and how they're looking to address some of the same challenges you detailed here?

I haven't joined myself (yet) but I am intrigued by the way they are tying to find solutions which may offer a chance for publishers to begin the transition from A1 to B2 / C2.

August 26, 2015
Wolf_22 (not verified):

The ideas about disruptive technologies are interesting but how do you maintain the momentum of a disruptive technology while avoiding the outcomes inherent to ubiquitous access to said technology? (A disruptive technology stops being disruptive when everyone starts using it.)

August 27, 2015
Kevin Schmidt (not verified):

I think a disruptive technology stops being disruptive when enough people stop using the old technology that was disrupted.

August 27, 2015
Paul Lieberman (not verified):

I hope we can make your PIM idea a reality. Of course this isn't a new idea either. Doc Searls was talking about this idea 15 years ago. Novell had a technology called DigitalMe that would let a user manage their personal data and decide what to share with whom across any subscriber site. Google and Facebook would like you to believe that you can use their systems to do the same. Since most people don't have their own servers, they have to trust someone with their data. Who will that be I wonder?

August 27, 2015
ChristophWeber (not verified):

On the open web it's not just about being a publisher. If I am a mom-and-pop shop or a major retailer, a developer, artist, writer or pundit, my own website represents me and my brand, and it has major staying power (if I want it to, anyway). On the distributor sites, whether that's Facebook or Flipboard, I am yesterday's news by tomorrow. So if what we publish is meant to have lasting value and have a long term effect on our brand, then the open web is the only platform that will do it reliably right now, which is one of its key features and major differentiators, and worth a lot to many. We have yet to see the distributors come up with models that provide long-term stability in branding, visibility and archival. They may crack that one eventually, but for now I believe the open web and the various aggregators and distributors can coexist quite well.

August 27, 2015

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