Friday, September 30, 2011

Sometimes disintermediation isn't - it's just new middle-men

In my last blog, I wrote about how the concept of disintermediation (where the "middle man" is removed from a transaction) has changed industries throughout the world as consumers are increasingly enable to buy digital goods and services directly. In thinking about it more, however, I have realized that there's probably a whole lot less disintermediation than I may have realized.

Whether you are buying eBooks from Amazon, songs from iTunes or renting movies from Netflix, you are actually not buying directly. You are just dealing with a new middle-man. The same goes for buying online travel from Expedia or Travelocity - you aren't buying that travel directly from the provider, you're just dealing with a new middle man.

That doesn't mean there there aren't lots of successful examples of real disintermediation. They range from the smallest (such as independent recording artists who have their own Web sites and sell songs, t-shirts and CDs directly to their fans) to the largest (such as airlines and rental car companies that let customers buy airline tickets and reserve car rentals directly).

But the most popular online and successful examples of online commerce aren't real disintermediators - they're just new middle men. And what that tells me is that people who make things often aren't the people best suited to market and distribute them - even when the product is digital. So even though anyone can easily set up their own Web site to market and sell their own products, that is probably not going to be their best task to success.

I'm betting there are also good examples of "re-intermediation" where middle men have re-entered the buying process because they add value that those who have tried selling directly find that they (and their customers) need what the middle men can provide. More on that in the next blog.

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