The next four industries to be revolutionized by the Internet

The next four industries to be revolutionized by the Internet

Summary: While the Internet has already had a powerful democratizing effect on the world, it’s far from finished in reshaping industries.

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It's been 15 years since the Internet became a mainstream phenomenon and began revolutionizing modern life in so many different ways -- from how we find information to how we communicate with other people to how we consume news to to how we buy books and music to how we find a compatible life partner.

Along the way, the Internet has completely upended entire industries, killing off or reducing many of the existing power brokers, removing the middle men, and ushering in new leaders -- the digital powerhouses of the 21st century.

Still, it's easy to forget that, from a broader perspective, we're only in the second or third inning of the Internet. There's a lot of transformation that's waiting to happen in the years ahead. In the same way that the Internet has unleashed sweeping changes in newspapers and magazines, music sales, and book sales, there are entire industries that have been only lightly touched so far but are destined to be caught in the eye of the storm eventually. Here are four of them.

1. Movies

The movie industry has been under intense pressure over the past decade as large-screen television sets have come down in price and high definition movies have made the home experience feel more and more like a small movie theater.

However, the movie industry has been through this before. The arrival of the television, the VCR, and the DVD were all predicted to kill the movie theater at one point or another, but it never happened for two reasons -- 1) Going to a movie is an experience where people purposefully want to get out of the house, and 2) The most anticipated films still show up in the theaters months before they come to pay-per-view, disc, and premium channels.

The latter is the most important reason why movie theaters still have such a strong business. It's all about controlling distribution of the content. That's likely to change soon. Hollywood is experimenting with the idea of selling movies directly to consumers at home (streamed over the Internet) at the same time the movies arrive in theaters.

Of course, movie studios will charge a higher fee (possibly $30). But, since many families already pay $50 or more to go to the movies and others would rather save time and watch it in the comfort of their own homes, there is definitely consumer demand for direct delivery. Thirty dollars may be too high, but this will happen eventually, and it will likely result in more people watching movies from home than traveling to a theater. Theaters won't go away, but they will likely decrease in number and turn into much more of a premium experience.

2. Healthcare

It's pretty embarrassing that in 2011 we're still talking about automating healthcare. It's an industry that thrives on the latest scientific research and cutting edge equipment to improve people's health, but can't adequately transfer patient information between healthcare providers and remains snowed under an avalanche of inefficient paperwork that drives up costs and wastes time -- at least that's the case in the U.S.

However, the U.S. government is trying to push for an electronic medical record (EMR) for everyone in the U.S. by 2014. Although this latest push has already been over two years in the making, the details are still working themselves out and there are some legitimate concerns about it. Nevertheless, the move to electronic medical records -- and a portable EMR that the patient (not the healthcare provider) controls -- is long overdue. And, when it happens, it will not only shift the investment in healthcare dollars away from old processes and products and into a lot more IT systems, but it also has the potential to give patients more ownership of their own healthcare experience, which could have unforeseen consequences for pricing, provider choice, and provider accountability.

In short, this is a major industry game-changer waiting to happen, and not just in the ways that the politicians are yapping about (see: Memo to the health care industry: The jig is up).

3. Book publishing

Amazon has completely changed the way most people buy books, and it's done it in two ways. First, it made it fast and easy to buy books online, and at a huge discount. Because of Amazon, book-buying was one of the first things people become comfortable purchasing over the Internet. A big part of that was because Amazon offered deep discounts like the big chain stores, Barnes & Noble and Borders, but carried a much larger selection of obscure titles like many of the independent booksellers.

Second, Amazon's Kindle has popularized e-books, which takes the process of delivering paper goods completely out of the equation. Instead, the Kindle delivers electronic files over the Internet to an e-reader, tablet, or smartphone.

While this has been a revolution for consumers, the Internet has done very little to revolutionize the publishing process for books. It is still ruled by publishing houses, who serve as the gatekeepers and filters for what gets published and decide which titles deserve the most promotion (and potential sales).

However, just as it did for news publishing, the Internet is about to completely democratize the publishing process for books. The combination of e-readers, electronic audiobooks, and print-on-demand have lowered the barriers to entry and made it so that authors no longer need publishing houses. They can take their work straight to the masses -- or, more accurately, straight to their niche audiences, in most cases.

This completely changes the economics of book publishing for an author by making it very profitable to sell only 5,000-10,000 books. In the old publishing world, that's about the average for most books and the author makes hardly any money and the publishing house considers it unsuccessful (the big titles are responsible for most of the sales and most of the payments for authors).

In the new Internet world, there are going to be a lot more books published (as e-books) and lot more titles to sort through, but it's also going to become a much more democratic process and there will be room for more people to make a living as niche authors. The traditional publishers will morph into promotional agents for the really big titles.

4. Financial payments

It's not that financial transactions have been completely unaffected by the Internet. Stock trading has been totally revolutionized. PayPal and eBay have had a major impact on the peer-to-peer exchange of goods between people and how they pay each other for them. Most people now use online banking to track their accounts, and a lot of them use it to pay their bills.

However, the way most people pay for stuff have been largely untouched by the Internet. Most of us still carry a wallet full of plastic cards with magnetic strips in order to connect with a merchant and tell it which account to draw from in order to pay for a purchase. That's about to change, thanks to a combination of smartphones and the mobile Internet. In what is sometimes called the "electronic wallet" or "digital wallet," consumers will soon be able to carry all of their accounts as digital tokens in their smartphones and then interface with a merchant to verify identity (with two-factor authentication) and choose which account to pay from.

There are lots of systems and standards that are competing for a way to make this work. Near Field Communications (NFC) is a technology that is designed for this, but it requires new chips that would have to be integrated into all future smartphones. Visa is running digital wallet trials, but they'll want to take their traditional cut of the action. I have to think that both merchants and consumers will look for a way to cut Visa (as well as Mastercard and American Express) out of the picture and find a standard transaction system that can work using existing smartphones, which now make up 40% of all cellphones in the U.S. (and an even higher percentage in parts of Europe and Asia).

This phenomenon will also make it easier for small businesses to quickly and inexpensively go into business and be able to accept payments. So again, this is the Internet having another democratizing effect on modern society.

This was originally published on TechRepublic.

Topics: Browser, Amazon, CXO, Health, Legal, IT Employment

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  • Bastille Day is when ?

    We are very much mid-term in the course of the Internet Industrial Revolution with at least another generation (25 years) of change to go yet. My fear is that, unlike previous revolutions, where the incumbents all went out of business or receded into the background ... Governments are so feeble, the populace is so apathetic and the media so complicit, that we will be forced to endure continued monopolisation by the existing powers that be ... instead of a vastly more efficient and cheaper architecture.

    Take the design of symform for example: a service to replace exhorbitantly expensive enterprise storage.

    And how much better it would be if, in the same fashion, a new broker appeared to replace banks and card companies like VISA and AMEX: for what is banking nowadays other than a few messages between computers? One of which I have already paid for!!

    No, the real revolution comes when the current institutions fall: they have a shockingly poor record in terms of stability and honesty in any event. Remind me: when is Bastille Day?
    jacksonjohn
  • RE: The next four industries to be revolutionized by the Internet

    Two things. One: Have you ever bought a digital book? And if you have...have you ever bought a physical one? Because saying Amazon sells ebooks at a big discount is a joke. New releases are typically about the same price as the hardcover in a store, and most of the older stuff you can pick up a physical copy from Amazon for way cheaper than a digital copy, to the point where the shipping is actually the most expensive part...especially since a lot of those books can cost pennies.

    As for digital wallets for in store purchases...I really don't see the appeal. You're introducing a lot of insecurities (as everything that's connected to the internet has some) for something that does pretty much the exact same thing as a credit card, except with multiple steps, instead of just "Take card->Swipe". I guess I might see the appeal if you're one of those folks with twenty different cards in his wallet, but for us sensible folk, it's just an extra hassle.

    Not to mention the obvious...what happens when the battery on your phone dies? Oops, lemme just go to my car and get my charger... If we went entirely to smartphones for EFT payments, we would use our smartphones less on the offchance that we want to buy something later in the day.
    Aerowind
    • RE: The next four industries to be revolutionized by the Internet

      @Aerowind With universal chargers being introduce by most Mobile manufactures, I betting a lot of shops will have them installed, something charging pads on the counters.

      If we are even using shops to do our shopping, I expect to be doing most of my shopping online, indeed I expect it can be and probably will be a fully automated system for food.
      Knowles2
    • RE: The next four industries to be revolutionized by the Internet

      @Aerowind "Not to mention the obvious...what happens when the battery on your phone dies? Oops, lemme just go to my car and get my charger... If we went entirely to smartphones for EFT payments, we would use our smartphones less on the offchance that we want to buy something later in the day."

      LMAO I think this is the most feeble counter argument to this technology that i have ever heard. The digital wallet wil be a reality. You can be assured of this.
      Scarface Claw
  • Financial Payments: HUGE maybe

    Credit card = consumer protection and tough regulations. Smart phone swipe = no protection and no regulations (plus numerous bill cramming allegations against Telco's which makes me not want to trust their billing anyway.) Convenience will win for very small purchases (like a soda) that I'll never dispute. For anything else, don't leave home without your credit card...
    veit@...
  • political impact

    I think you missed a big one. In the same way that the internet is curcumventing the main stream media (newspapers, tv networks, etc), it's also going to curcumvent our two-party political system. At some point people will be so disgusted with the two mainstream political parties that they will start looking elsewhere for leadership inspiration...like YouTube or Facebook. We as a people will no longer feel constrained to the old political party systems.

    Of course I could be wrong. Perhaps it's just wishful thinking on my part.

    gary
    gdstark13
  • RE: The next four industries to be revolutionized by the Internet

    "Books" should have been extended to any craft industry.

    www.nakedwines.com (my business) has created a unique business model, where 50,000 Angels invest ?1m a month in independent winemakers, in exchange for preferential pricing.

    www.made.com is selling designer furniture cheap - if hundreds buy it together

    www.unbound.com is raising the funds for authors to complete their books.
    rowbags
  • RE: The next four industries to be revolutionized by the Internet

    It killed travel agents and ham radios too.
    gtatransam@...
  • RE: The next four industries to be revolutionized by the Internet

    "However, the movie industry has been through this before. The arrival of the television, the VCR, and the DVD were all predicted to kill the movie theater at one point or another, but it never happened"

    None of these or future external influences will kill movie theatres, they will kill them selves by offering an ever declining user experience and an ever expanding cost. Has anyone been to a movie theatre lately, the screens sizes are pathetic, barely justifying the term "On The Big Screen", you can hear the movie playing in the theatre next door on occasion and for this lowering of the user experience ticket prices continue to grow exponentially. Eventually a tipping point will be reached when people decide the experience doesnt justify the cost.
    Scarface Claw
    • declining movie experience

      @Scarface Claw I reached that tipping point quite some time ago when ticket prices topped 10 bucks. I have occasionally gone since and even seen some decent movies but never one that had justified the exorbitant price of entry. 15 bucks for a ticket and they can't even assure me a good seat.
      carlson1@...
  • RE: The next four industries to be revolutionized by the Internet

    One line says it all: "Along the way, the Internet has completely upended entire industries, killing off or reducing many of the existing power brokers"

    That's the reason all this doesn't happen faster. The post office never got a clue about email until it was too late (remember when they actually offered a service to transmit mail electronically, print it out, and then deliver it the old-fashioned way?), thinking their government sponsored monopoly would protect them. Every one of the industries mentioned in the article is fighting back via laws and whatever roadblocks they can throw up. Nobody in the future is ever going to be asleep when the internet threatens them. Change will be a lot harder.

    Also, with the health industry legal concerns cause a lot of the problems. It doesn't matter that somebody else took your medical history or ran a particular test. Sharing information still doesn't remove you from legal liability. When you wind up in court with a malpractice suit, the question is always why didn't you run that test yourself and catch whatever mistake got you sued?
    wilback
  • RE: The next four industries to be revolutionized by the Internet

    I fail to see how any of this in any way 'new' these revolutions took place (in most areas) some time ago. Perhaps there's some new angles from the smartphone app side of things, but overall nothing that hasn't been around for a couple of years or more.

    There are many other industries that have greater implications pending (to my mind)..... Gaming, Shopping, Security etc..
    AxelWiresmith