The digital marketplace is of course a relatively new concept that has seen huge growth over the last few years. In fact as a concept it didn’t really exist twenty years ago but nowadays billions of dollars of transactions take place every year.
Specifically of course, we’re referring to non-physical products – digital goods and services which can be delivered over the internet without physical packaging or the need for a store. One of the biggest and most profitable areas is of course media and entertainment. Companies like Hulu, Netflix and Amazon have invested heavily in the delivery of digital entertainment like music, films and TV series which can be streamed directly into your living room.
This of course sounds great in theory, one product which can be effectively delivered to a global market with minimal distribution costs – it sounds like a model for success. However it’s not quite that simple for a variety of reasons which can be difficult to understand. One of the main problems is licensing particularly for the broadcasters, who negotiate distribution rights based on location. This means that what they can stream into a room in France is very different to what they can stream into an American household.
So the global product is actually very difficult to achieve with current traditional licensing agreements. In fact many services are simply not available in some countries, you can pay for something online and only access it in a specific physical location.
It’s something that the European Union are trying to change, to establish the first truly digital marketplace. The idea is that if you buy something in Germany online then it is available to you wherever you happen to be in Europe, irrespective of your location. At the moment thought then this is a concept that simply doesn’t exist.
What a potentially global provider does is check on your location and then delivers the goods or services depending on your location. However this can lead to some distinct differences in the services that are received and how good they are. Of course, this is a very clumsy way of using a global delivery system like the internet and it can actually be exploited.
For example the US version of Netflix is considered to be far superior to any other version available in the world. So people use various systems to ensure that they can access this version when they subscribe to Netflix. From using proxies to using an American DNS for Netflix, means that you can actually select the US version irrespective of where you actually live.
This will have to change, because the technological barriers applied don’t really work. For example BBC iPlayer is supposedly only available in the UK but estimates are that over 60 million people watch it from outside the UK, roughly the entire population of Britain. The reality is that it’s easy to watch iPlayer USA side by just hiding your real location.