Wednesday, May 24, 2006

How about your own TV station?

If the price of a product goes down, all other things being equal, the demand for its complements rises, and vice versa.

If the price of gas goes down, demand for cars goes up.

If the price of PCs goes down, demand for OS goes up. That's why Microsoft refused to sell an exclusive license to IBM. Redmond wanted the PC market commoditized.

If the price of enterprise software goes down, demand for enterprise software integration goes up. That's why IBM - the current consulting firm IBM, not the old PC IBM aforementioned - is embracing the open-source movement like it's its favorite child.

In a video project, you acquire the gears, produce the video, market it, and distribute it to whoever wants it.

The likes of Google and YouTube are driving the price of video distribution to zero. So what happens when video distribution, which has previously been dominated by a few dozens (think TV stations), is now open to everyone with an internet connection? To be more precise, who stand to gain the most?

You are likely to produce more videos or buy more services to produce videos for you. Which means you are also likely to buy more online ads (Google ads, maybe?) to promote your videos.

And I won't be surprised that Macs, perceived by many to possess this supposedly-native superiority in dealing with videos, will grab some more points in PC market share as a result.

(See Joel Spolsky's introduction to complements.)

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