As always, the world is changing. While this is a phenomenon not unique to this time, we are perhaps experiencing some of the most drastic changes both in the way we view the world, and in the way businesses function. Today, the feasibility of an Internet only businesses model is dominating many industries both in America and worldwide. To many individuals, the reasons for these changes are a mystery, but everyone recognizes the shape of things to come: the Internet.
These changes are coming about rapidly, both due to the extreme number of potential customers that can be reached online, as well as the often drastically cheaper operations cost of online only operation, versus brick and mortar situations. One need look no further than Netflix. Where once Blockbuster once was the king of video distribution for both movie rentals and sales, Netflix has become the new leader. With rising technologies, such as a highly complex rating system to assist customers in finding titles they may like, Netflix has shown both initiative and innovation. Netflix uses a highly complex algorithm to quantify the data gathered from the user’s viewed movies and the rating that user gave them, cross referenced with other user data, movie tags, and other data gathered by their system. Additionally, last year Netflix began digital content streaming. This mean that their movies can be viewed instantly via a PC, Mac, Xbox 360, TiVo, or other compatible devices. Such a strategic and well executed business model has allowed Netflix to dominate the industry. In recent months, Blockbuster stock has dropped below one dollar, whereas Netflix stock is in excess of $37 per share (Google Finance, 2009).
Print newspapers are struggling under the prevalence of e-commerce due to their falling subscriber base and their high operating costs. Newspapers have been making many strides to combat this, but currently their approaches will only delay the inevitable obsolescence of newspapers. While there will always be people who prefer to read their news in print, rising technologies and cheap operating costs are making the feasibility of newspapers drop almost daily. From news sources such as Yahoo, AOL, as well as online versions of current print newspapers, many people are getting their news online. These numbers are only increasing, and with new and more accessible products, such as Amazon’s new Kindle 2, they will continue to rise. The Kindle 2 is an e-book reader with built in WiFi, subscription services, and more. Weighing approximately what a newspaper would weigh, these simple to operate devices are being adopted even by those who would not consider themselves tech-savvy due to their ease of use and strong customer support services. Now, instead of walking to their front lawn to get their newspaper, Kindle 2 users need only view the already downloaded versions of their participating newspapers, magazines, RSS feeds, etc (Amazon, 2009).
Higher Learning is another instance of America’s migration to a digital world. Distance learning, which can include online only classes or a combination of classroom and online learning, is rapidly becoming an option most students are at least considering. Despite the shift towards online learning, physical colleges aren’t going anywhere any time soon. Distance learning is not a viable solution for everyone as many students still benefit more from a traditional classroom experience. In the case of distance learning, it will most likely always be a mixture of students that pursue online curriculum versus student enrolling in traditional universities.
The real-estate industry is an industry that is seeing great benefits from online migration, with little to no negative effects. Realtors still show the physical houses, apartments, and business offices and still often operate from a physical office, but the Internet has provided many new opportunities for this industry. In the past, moving to a new state could be a nightmare. Often times, individuals would have to either travel to their soon-to-be home and scout out a new home long in advance, or rent a house or apartment while searching for a new residence after moving. Now, realtors can show properties both for sale or rent over the Internet. Virtual tours, as well as many other online resources have changed the face of real-estate purchasing. A Potential buyer can view their potential new properties online through virtual tours, photos, and other data provided online. Average electricity, gas, and water bills can even be researched online. This has allowed many realtors to prosper when their online presence is professionally handled, and has made life much easier for those moving over long distances.
Interestingly enough, the video game industry, which was already a digital industry, has also made advances in recent history towards utilizing digital connectivity. Valve Software, creators of such video games as Half-Life, Left 4 Dead, and Portal, to name a few, have pioneered digital distribution of video games. Their Steam Engine offers users the ability to purchase full games from the comfort of their home computer, and play them from the Steam Engine interface (Valve, 2009). Some of the advantages of this service for the user the use of less disk space, as the games are stored on a central server, automatically updated software, and an overall hassle free experience. Valve, on the other hand, benefits greatly from their business model as well. In addition to being able to sell their products any time, day or night, they also no longer need to waste resources on expensive packaging. With digital distribution, once the software has gone Gold and their marketing and operational materials are finalized, their product is ready to be marketed. No more shipping delays, loss prevention, or vendor relations are necessary. Microsoft’s Xbox Live is another excellent example of the video-game industry capitalizing on an Internet connected society. Xbox live offers users the ability to purchase and download games, compete against friends or even in tournaments online, share photos, or even participate in text, audio, or video chat sessions. An excellent new addition to Xbox Live are the Community Games. Community games give would-be video game developers an outlet to release their software to the public without going through the process of selling their product to a larger production company for distribution (Microsoft, 2009).
Individual entrepreneurs are also benefiting greatly from these advances. Stock investors are able to make better informed decisions in their purchases with tools available from companies such as ShareBuilder.com, as well as data that can be found elsewhere, such as Google Finance. Another online venue, eBay, has given many individuals the opportunity to make supplemental income, or even their entire living, from the comfort of their own home. Freelance writing is another area where the Internet has allowed great advances. Websites, such as Helium.com, offer an opportunity for anyone to pursue a career in writing. In the past, it was often much more difficult than it is today to break into many of the fields now widely available for anyone to pursue.
The migration to a digital society is something that well managed businesses have foreseen and have been preparing for years. In many cases, however, businesses are suffering. Newspapers, mentioned earlier, are one of the major suffering industries. For a print media source that has their own printing equipment, liquidating this equipment would be a necessity to maintain competitive operating costs. Both the maintenance for this equipment, as well as the housing for this equipment is very costly. Once the conversion has been made, however, these media outlets are finding that digital distribution is a much better solution for them. State newspapers can now sell advertisements catered to the area a viewer lives in based on their IP address, tracking cookies, and customer surveys.
The downside to these advances are that businesses not prepared to enter
into the digital market to same degree or another are missing out on many opportunities. Even service industries, such as landscaping businesses have websites, offer online quotes, and have the opportunity to represent their business far better and more accurately through their own website than they ever could through a print ad.
Another negative effect of such mass interconnectivity is the prevalence of e-mail spammers, phishers, virus distributors, and other computer malware. Spammers, individuals or groups who send unwanted solicitation e-mails, are responsible for a majority of the world’s e-mail traffic. Phishers are groups or individuals using social engineering tactics to attempt to mine data from their victims, such as passwords, credit card data, and other sensitive information. Viruses and other malware are responsible for a plethora of things, primarily computer issues, data theft, and utilizing a group of infected computers to orchestrate an attack on a website.
While it will still be some time before every household in America is connected to the Internet, that time is coming, and with Internet connections available at libraries, schools, and even bookstores and restaurants, staying connecting is now easier than ever. Many cell phone service providers also offer unlimited mobile Internet connections at affordable rates, giving individuals access anywhere, anytime. America is fast becoming a digital nation.