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revisiting @benthompson's Aggregation Theory from the ground-up by re-reading the 2015 post that started it all https://stratechery.com/2015/aggregation-theory/
Aggregators are fundamentally rent-seekers that capitalize on their monopoly of the customer relationship.
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Aggregators are fundamentally rent-seekers that capitalize on their monopoly of the customer relationship.
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"Content has always been monetized by proxy, whether it be paying for newspapers (or advertising space in those newspapers), paying for CDs, or paying for cable TV. The shift to digital has exposed these proxies for the rent-collection mechanisms they are."
Lots of aggregators get their content for free: Facebook, YouTube, Twitter
Because they get their content for free, these aggregators are particularly powerful as they have no supply-side costs.
Because they get their content for free, these aggregators are particularly powerful as they have no supply-side costs.
Aggregators emerge because protocols (SMTP, HTTP, RSS) lack built-in monetization.
Aggregators arise to siphon value that publishers can't easily capture.
Aggregators arise to siphon value that publishers can't easily capture.
The publisher/consumer relationship was flipped by the internet's zero marginal cost of distribution.
Previously, the hard problem *was* distribution: Newspapers controlled printing presses, trucks, paper boys. Newspapers solved the hard problem, then aggregated supply - writers
Previously, the hard problem *was* distribution: Newspapers controlled printing presses, trucks, paper boys. Newspapers solved the hard problem, then aggregated supply - writers
With zero marginal cost of distribution, the hard problem is now aggregating attention.
Via personalized algos, aggregators can command large swaths of attention. In an era where everyone is a publisher, aggregators solve the hard problem of aggregating demand.
Via personalized algos, aggregators can command large swaths of attention. In an era where everyone is a publisher, aggregators solve the hard problem of aggregating demand.
Aggregators stick themselves in the middle of the publisher/consumer relationship and collect rent via advertisements (fb, google) or subscriptions (spotify, netflix) as a reward for aggregating demand.
It doesn't have to be like this!
If we want a decentralized web that isn't owned by large aggregators, we must develop protocols that reward publishers. We've anchored ourselves to the expectation that all digital content is "free".
If we want a decentralized web that isn't owned by large aggregators, we must develop protocols that reward publishers. We've anchored ourselves to the expectation that all digital content is "free".
We're missing out on SO much content because our protocols don't allow publishers to monetize their content.
More content would be created if all the value wasn't sucked up by aggregators.
More content would be created if all the value wasn't sucked up by aggregators.
HTTP has a response code of 402 (Payment Required) that was never implemented.
This is the original sin of the internet — without built-in monetization, the dominant business model of the internet became ads.
This is the original sin of the internet — without built-in monetization, the dominant business model of the internet became ads.
If we want a decentralized web, we must build protocols that favor creators.
If a consumer cannot directly give money to a creator, then rent-seekers will pop up to siphon value by inserting themselves into the value chain.
If a consumer cannot directly give money to a creator, then rent-seekers will pop up to siphon value by inserting themselves into the value chain.
In a world without monetization protocols, aggregators are king — publishers are commoditized.
In a world with monetization protocols, publishers are king — they control their content and the customer relationship.
Let's build the decentralized web.
In a world with monetization protocols, publishers are king — they control their content and the customer relationship.
Let's build the decentralized web.
