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Wednesday, 3 June 2009

Super distribution may be upon us

The concept of distribution has been around. Umair Haque termed it as viral revenue chains in 2005 and deem it as one of the important models for content distribution:

viral revenue streams are almost a foregone conclusion, because they are a dominant solution for the public goods problems the radically decentralized and open economics of the www creates. They're, pretty simply, the most rational and efficient solution to what people think is a messy problem - dealing with digital property rights.

This was echoed by Fred Wilson in 2007 when he wrote about how superdistribution will become a new model for content and revenue distribution:

Superdistribution means turning every consumer into a distribution partner. Every person who buys a record, a movie, reads a newspaper, a book, every person who buys a Sonos or a Vespa becomes a retailer of that item. It's word of mouth marketing, referral marketing, but with one important difference. The consumer is the retailer.

Superdistribution hence seem be an important mechanism/model for next generation marketing. At stake is a new ideology of how distribution in a networked economy will look like. But before we go deeper into the subject, let's get back to basic: what is superdistribution?

Clay Shirley has defined it well and also added in its importance to our connected culture:

This is superdistribution — content moving from friend to friend through the social network, far from the original source of the story. Superdistribution, despite its unweildy name, matters to users. It matters a lot. It matters so much, in fact, that we will routinely prefer a shareable amateur source to a professional source that requires us to keep the content a secret on pain of lawsuit. (Wikipedia’s historical advantage over Britannica in one sentence.)

Given how important superdistribution is, why are there so few real life examples? The answer is that it is tricky to operationlise these revenue chains. To make superdistribution a reality, we need (i) analytic services that can track beyond first level referrals and (ii) a payment infrastructure that is well embedded into our interactions such that we don't notice it at all. Both are difficult to achieve in critical mass on the Web.

Now however, there is an interesting device that has both of these characteristics: it is called the mobile. Mobile is our most personalised device and it knows information about us right down to the indiviudal. That can produce insightful analytics about who we share our content with and to what extend does that content gets filter through the social network. Mobile also comes with payment embedded, which is necessary to enable revenue sharing.

Hence, I was pretty excited when I read this article about Google and Apple enabling superdistribution-like features for their mobile stores:

Apple's (AAPL) new iPhone 3.0 software includes features that, if activated by Apple, may let users share software with one another, according to a person familiar with the technology. Eventually, iPhone users may even get a commission when they've induced someone else to make a purchase

If they get this right, we are going to see new models of distribution being created right before our eyes. The value this is going to release will be tremendous. I can't wait to see how this unfolds.

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