Will Digital Space ever be Profitable?


This may sound a little pompous but the fact is that Internet is the most revolutionary medium developed since television in the late 1940s and 50s. So far, Digital Marketers have been struggling to project this channel as an effective channel, but the fact is that its multidimensional adaptability supersedes that of any other medium. I took the plunge into digital marketing believing that Internet will soon gobal up the big fish and replace analogue media sooner than later. But guess little I realized that this business is still in the valuation mode, every second digital product you come across is only vying to acquire more and more users. Without much worrying about, the immediate impact on the business.

Globally you could count the companies in this space who are actually making money! Is the flaw in the business modeling or actually creating offerings which are attractive enough? Are enough marketers trying to understand the gaps and developing this space or the randomness is reining its control?

Technology’s Marketing Flaw!

At this juncture I feel obliged to mention a dicey disconnect between technology and marketing. There is a huge gulf between developing a new marvelous technology and finding a market for the technology. And this is not a new phenomenon, this has existed for years. I read somewhere that when the revolutionary ball point pens where introduced after World War II, one company promoted this product as being able to write underwater. The early pens coasted 10times much as fountain pens, so it was necessary to stress the USP. There was however no research identifying how many people would be really dying to write underwater! And obviously this was long before they discovered Scuba Diving!

The oxymoron was that while ballpoints could write underwater, what early versions lacked was writing under pressurized cabin of the plane. And the day a marketer realized that, ballpoint pens became most ubiquitous products in the universe. This is not one isolated incidence of technologies lack of marketing purposes.

Here is a recent example in 2000; a company by name Digital Convergence introduced a device called the CueCat. This was a small scanner shaped like cat (as opposed to mouse) that was to be connected to PCs. Many publishers like Forbes, obliged printing bar codes on their covers, in order to let the CueCat users to scan bar code and reach the web page on the internet. Digital Convergence and these benevolent publishers distributed over 10million CueCats. Device caught all kind of awareness parameters but met little enthusiasm with its consumers. It was clear that people just didn’t want to read magazines on the web! The business fell within 12 months of its birth, catalyzed by the technology bubble burst in 2000.

Digital Convergence still maintains a web page and urges consumers to hold on to their devices and use them, because one day technology will come back.

I guess proliferation of millions of channels within the Internet space is driving away the sanctity of the medium, though with current economic melt down funding have taken a back space but not for very long. I guess it’s become important for technologist to become technopologists, they not just understand the technology marvel but the interactive behavior of consumers with technology. At the core of every invention/innovation should be an inherent basic consumer need. That’s when a true model for this space will come alive. Time to go for presence in the space needs to be more sanctative.

On a lighter note last evening I met representative of one of the largest General Entertainment Channel (GEC) in India raring to enter the Digital Space. They would be aggregating our very own daily soaps from their channel and stream them on their portal. In hope that there will be millions who will throng this portal and watch summarized soap in the duration of 1-4mins!

Isn’t it time when the Digital fraternity stop inventing and innovating for the sake of valuation? Could we clearly identify the consumer needs and answer them well.

When Indian Railways can identify a clear need gap and make IRCTC offerings a grand success, why not others?

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