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Articles

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Frictionless Commerce: Making the Digital Economy Work Better

Simon Hopkins, Convergence Associate for the Creative Industries KTN, reflects upon an important trend that is currently disrupting establishing value chains while at the same time providing considerable potential for growth throughout the creative industries.

 

The availability of goods and services in the digital age is unprecedented. Consumers have never before had such easy access to both physical goods and digital content and services in such a vast array of forms. Meanwhile, businesses have never before had such access to distribution channels that can reach international audiences and markets so swiftly, nor have they had the potential to understand their consumer base so thoroughly. Whether these transactions involve the passing of data or content from one person to another or the provision of a service, the digital nature of these transactions has brought fundamental change.

The economic benefits of such ‘frictionless commerce’, in which the barriers and costs to transaction become dramatically reduced are considerable. Whether it is crowdfunding investment, aggregation and recommendation services or the delivery of niche or ‘long tail’ content through subscription services, new opportunities are emerging for businesses, investors and consumers to interact and build value.

However, for all parties in the value chain – creators, wholesalers, distributors, licensees, retailers, re-sellers, advertisers and consumers – there remain areas in which the process of transaction remains difficult, opaque and sometimes impossible. Whether as a result out-of-date intellectual property regulations, proprietary “walled garden” operating systems and apps markets or poor meta-data standards, commercial activity in the content sector and beyond is being frustrated.

Overcoming such barriers will require a range of approaches – public policy, business strategy and technological – from across industry and government. Of particular importance will be the Copyright Hub, a response to the Intellectual Property Office 2012 paper Copyright Works Streamlining copyright licensing for the digital age, and which has been launched to investigate ways to address a range of long-standing licensing problems.

The Technology Strategy Board is playing its part by attempting to address the innovation barriers to frictionless commerce. A competition will launch at the end of September, looking to invest £2.5million in Collaborative Research & Development (CR&D) projects that lead to efficient digital transactional environments for the content industries.

 

 

 

 

Comments

Comments

1 person has had something to say so far

Thanks for the article Richard. My start-up is looking at the role that subscription services can play in making commerce frictionless. If people have already committed to spend £xpcm on a given product category, then the role of any app/software/store then becomes about getting people to allocate which product their committed spend should go to, rather than going through the clunky checkout process.
Posted on 10/10/13 18:00.

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