Remember ‘walled gardens‘? It was a popular concept in debating the blossoming of social networks a few years ago. Today Facebook – having surpassed the United States and moving toward China and India in population – is far more open than the walled communities it was once compared to – AOL and CompuServe. But Facebook is still a walled community. On Facebook you play by Facebook’s rules. For the most part we citizens of FB are content. In exchange for giving up some of our freedom we get an easy to use interface and a safe way to explore and experience the fascinating tools of Web 2.0.
With this week’s announcement of the iPad I have been again thinking about walled gardens. Put aside the debates about the device itself. Consider instead the iPad’s contribution to a shift that is taking control of content distribution from publishers, studios and record labels and putting it in the hands of hardware manufacturers.
Unlike the battles over Beta and VHS, SD Cards and Memory Sticks, or HD DVD and Blue Ray, the stakes here are higher because the devices themselves now carry the stores on them. Once you buy a Kindle or iPad, you effectively lock yourself into the content they offer through their convenient, online and embedded stores. Conversely, for content producing industries that are struggling with the digital disruption, popular devices like iPods deliver literally millions of potential customers. So if iTunes says a song will cost $1.29, or Kindle pegs e-books at $9.99, what’s the label or publisher to do? Turn away millions of customers by rejecting the platform?
Companies like Apple and Amazon are vying to position themselves between content sellers and content buyers. They are, in this sense, becoming gatekeepers.
And if you have gates and gatekeepers, then you must also have walls.
Again with the training wheels.
We’ve been here before. Recent history provides some insights that we might use to consider the future of Apple or Amazon controlling the distribution of digital content. AOL and Internet Explorer serve as interesting precursors to the current situation. In both cases, people demonstrated a consistent behavior that seems to be showing up again in consumer behaviors today.
That human behavior is this:
When the Internet was new (to the general public, anyhow), people were apprehensive and unsure. They asked for a safe entry point. Insert American Online. AOL was the Internet with training wheels. While most of us were discovering chat rooms and instant messaging, a minority of web surfing pioneers eschewed AOL and struck out on their own. They came back with stories of wonderful things you couldn’t get on AOL. The more people heard the more curious and discontented they became. Eventually, as all citizens of walled communities do, they started to think beyond the walls.
No sooner had the newly liberated masses escaped AOL for the wide open Internet than they began to again feel a little disoriented and apprehensive. The Internet was big and open and wild. While they didn’t want the walls of AOL they admittedly needed some help navigating this digital wilderness. Along comes Internet Explorer, conveniently bundled in your operating system. IE provided people comfort, usability and essentially training wheels via a familiar (enough) user interface and a brand they had known and trusted for some time (Microsoft).
As with AOL, some brave innovators opted not to dine on what Explorer was serving. Again people began to hear that IE rendered the web a certain way. In fact it sometimes ignored web pages completely. As with life in AOL, when those Internet pioneers came back with tales of something better beyond the confines of IE people again demanded the walls come down.
Today Apple and Amazon are providing the same training wheels as we get oriented to digital content delivery. We people are just getting comfortable with digital music and e-books. So, as with web surfing in the late 90′s and web browsing in the early millennium, we’re willing to accept the training wheels again. Shiny, touch-screen training wheels that make the whole experience easier.
“But today we can still go out on the Internet, using our browser, and pull down any content we want,” you might be thinking. That is true. But if you want to play content on the sexy news devices – the same innovative devices that deliver instant access to your online community, the convenience of portability, and of course the social cache that you’re cool – you by and large have to choose the content those device manufacturers are selling.
Just as it happened for ISPs and then Web browsers so I am guessing it will happen with mobile social/media devices. It’s easy to get swept up in the talk of paradigm shifts, but the empires built by AOL, Netscape, Microsoft, Friendster, MySpace, Facebook, Amazon and Apple are in truth fairly transient (at least by historic standards). Sometimes they last for decades. Sometimes just years. No doubt some pioneers are out there right now, toiling away in anonymity, hacking at the walls being built, sneaking content onto iPhone and iPads and Kindles. Some day they will return with wonderful stories of all the great things to be enjoyed were we all not tethered to iTunes or the Kindle store. At that time people will begin to chip away at the very walls being built right now.
The Internet is famous for the phrase ‘Information wants to be free.’This ‘openness’is an inherent conflict with its commercialization. In some sense, it is also a necessity. Again and again we may choose walls over wilderness eventually, but that gnawing sense that there is something better beyond the barriers we once sheltered ourselves in keep monopolies in check and force businesses to continually innovate.
Good observations Corey.
Only flag I’d raise is that AOL and IE did not get revenue by selling you things, which is the Kindle/iPod model.
That seems to be the difference here: you want to use our cool device, you’ve got to do all your shopping in our store.
To break the monopoly, someone’s got to build a cooler device, one that will work with every store.
That might be a lot tougher.
Alan, great point. And the fact that someone is shelling out $300-$500-$800 bucks for a device will provide some attrition or switching barriers I would expect. Then again, if the iPad sells hot out of the gate and people are willing to dole out that kind of money for a tech-toy so easily in a slow, cash-poor economy it may not be as much of a barrier after all. Especially if a new, open, device accepts all the previous purchases the new owner has stored on their legacy devices. (It may also point to a new price bracketing of what constitutes an ‘impulse item’in today’s day and age.)
Interesting the WSJ today was talking about Apple and Amazon locking horns on eBook pricing. Amazon apparently flinched. (Their ‘flinch’means more money in their own pockets.) Toward the article’s end, some fellow was quoted and dismissively mentioned Amazon trying to build a monopoly. Monopoly and Americans don’t mix. Which is why I like to evoke a quote by the dashing Princess Lea from Star Wars, “Vader, the more your tighten your grip, the more the rebel alliance will slip between your fingers.”
Strike up the John Williams overture.
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What do you have against walled gardens? You mean to tell me you didn’t enjoy your time at Burnett?
Keith, I’ll just leave it at this: My time at Burnett taught me some very valuable lessons about the advertising industry which I have taken with me throughout my career.
Very diplomatic answer. Well played, sir, well played.
The walls of iPad are now just for the early early early adapters. The tipping point comes when the masses are looking for content not in the stock. There will also be a sizable push back from large content creators to control pricing etc. Witness the Macmillan stand on setting its own price for ebooks. The points of inflection will always turn on serving the market. Gardens work early but inevitably tumble.