Webeye

January 10 2008 – The Internet Revolution

In Internet on January 10, 2008 at 8:26 pm

Since the 1990s our world has changed considerably. The spread of the Internet, together with the exponential growth of power in microprocessors, has left us all, as David Lange would say, wanting a cup of tea.

No one could have predicted that whole industries would be founded, and flounder, on the back of the phenomenon. Thousands of people are now employed in jobs that did not exist before the Internet. These are the people providing your connection to the Net, the ISPs, the people who design and maintain the web pages, and the people that write the software, and build the hardware that it all runs on.

The whole of the recording industry has had the guts ripped out of it by the demolition of its business model. Sales of CDs are dropping daily. The record companies have failed to adjust to the concept that music can be downloaded from the Internet. First they ignored it, then they tried to prevent it with Digital Rights Management, now they seem more in tune, and are adopting it.

Banks immediately saw that savings could be made. They had already decimated their branch structure, replacing them with ATMs and phone banking. The Internet allowed them to provide home banking. Now the only reason to visit a branch is to deposit a cheque. There are even banks that have no branches at all, allowing deposits by mail.

Newspapers were badly hit by the rise of auction sites like Trade Me and eBay. The classified advert market disappeared as fast as people signed up with an ISP. They also lost readers who found more up-to-date news is available on the Internet. They fought back, and now provide some of the best sites on the Web, and Fairfax Media, who own this newspaper, now own Trade Me.

Television and cinema will be next to experience pain. Unless they adapt they could have the same problems as record companies. People now want to watch their favourite programme when they want, and not when a TV station dictates. Some stations are now allowing downloads of their programmes. The expectation is that movies will eventually be available directly from the studios.

Radio seems to be doing the right thing. Broadcasters have made their programmes available as podcasts. Although they are hampered by the stupidity of record companies not allowing music in podcasts. They tried to stop stations playing records when broadcasting first started. That didn’t work either. Some stations allow you to listen online via streaming and others, especially the BBC, allow programs to be listened to for 7 days after the conventional broadcast.

Phone companies, the same people that connect you to the Internet, will be under stress as the use of VOIP grows. VOIP allows phone calls to be made over the Internet, which makes them very cheap indeed, if not free. Technology now allows ordinary phones to be used as VOIP phones.

As Microsoft, and Google rush to digitise all the books ever published, and Amazon pushes the Kindle ebook reading device, book publishers will be next to have to adjust.

Even software companies are under threat. The spread of open source software such as Linux and Firefox could only occur because of connections, and communication made available, by the Internet, to the programmers.

The retail industry, strangely, remains relatively untouched, as people prefer the mall rather than the mouse to shop.

Meanwhile some people now retreat from real life by spending time in virtual worlds like Second Life.

We live in a marvellous time. The Internet Revolution will be recalled, by historians, in the same way we recall the Industrial Revolution and the Renaissance.