'The End Of The Level Playing Field' (avc.com)

Venture Capitalist Fred Wilson writes in a blog post: When the Internet came along in the early 90s, we saw something completely different. Here was a level playing field where anyone could launch a business without permission from anyone. We had a great run over the last 25 years but I fear it's coming to an end, brought on by the growing consolidation of market power in the big consumer facing tech companies like Google, Apple, Facebook, Amazon, etc, by the constricted distribution mechanisms on mobile devices, and by new leadership at the FCC that is going to tear down the notion that mobile carriers can't play the same game cable companies played. It is certainly true that consumers, particularly low-income consumers, like getting free or subsidized data plans. There is no doubt about that. But when the subsidies are coming from the big tech companies, who can easily pay them, to buy competitive advantage over that nimble startup that is scaring them, well we know how that movie ends.

Comments

Re:this happens in most mature markets

[Archtech]

As soon as you start thinking in terms of "winners" and "losers", you are passively accepting the picture of the Internet as a commercial marketplace in which corporations compete for profit. There are already far too many aspects of modern life of which this is true.

Regardless of its commercial excrescences (which we are free to ignore if we wish) the Internet continues to be of huge value as a common medium of communication. It's all too easy to overlook the enormous amount of learning and discussion that goes on every day, without anyone paying much notice becuase there is little or no money involved.

Rather like FOSS, in fact, the true extent of whose adoption is very hard to establish because there is little or no money involved. (How big is the "market" for Linux distributions? N times zero equals zero for all values of N).

Just scratching the surface here.

[140Mandak262Jamuna]

The article talks only about start-ups vs established players, comparing it to the cable TV operations in 1980s to the current situation in internet companies.

But there is a more insidious, a more disconcerting tilting of the playing field is happening. Before big-data and this level of data consolidation, commerce/trade happened between large mass of anonymous consumers and service/goods providers. The price information was public, and a few diligent consumers who compare prices, the informed consumers were mixed up with general public. Now the companies are able to cherry pick diligent informed consumers and give them special coupons, special deals and then raise the rack rate, the posted prices. So much of the consumer behavior is being captured, analyzed and the power of the general consumer is getting increasingly diluted.

So the established big companies are not only able to keep competition away by giving away most common services people want, they are also able to find the consumers who are likely to look for alternatives and keep them in the fold too.

This kind of power is not similar to cable tv operator vs giants in 1980s. It is more like 19th century London traders who had information about rainfall and estimated harvests from all over the world, and were dealing with uninformed local farmers in various parts of the world. Especially cotton and sugarcane. Say a bumper crop of cotton in South India might be happening while Egypt and south USA were hit by drought. But the Indian farmers might be selling to the agents of London traders at pennies instead of pounds. Today the companies can price products knowing exactly how much they can push you individually not as part of a large collective mass. The implications should frighten people.