An interesting news item caught my attention this week. I saw a piece on a lunch-time BBC news bulletin about a local group (Mesh 29 – see website) who have charted without a record company, a record deal, a distribution deal, or even producing anything more tangible than an internet link (see news feature). I found this to be an interesting example of disintermediation (cutting out the middle) that the internet has allowed. We might view it as the hollowed out organisation, or evidence of a flatter earth, or even an act in the long tail, but I see it just as an example of consumers getting much closer to producers.
Although the technology has allowed the spread of disintermediation, the growth of global markets has given the volume needed to cater for minority tastes. I often wonder if disintermediation – doing away with all of the middlemen (and women) – is an important corollary to globalisation. Could we have the one without the other?
Globalisation without disintermediation would represent the world of corporate hierarchies, where one mass unit would interact with another. This is the nightmare world of Orwell’s 1984, of Mussolini’s dream of a Fascist State. Equally, disintermediation without globalisation would be rather anarchic – a world of broken promises. In many respects the world was a bit like this during the dot-com boom of 2000 – orders made and taken, but with very serious problems in fulfilment. It is interesting to reflect on how far we have come in seven years.
This has some resonance for the future. There is nothing to suggest that the process of disintermediation has abated. Indeed, we speculate that part of the crisis in the retail end of the financial services industry is that people simply want to stay much closer to their savings. Additionally, despite the setbacks in the Middle East, the world is still adding connections rather than disconnecting them. If so, the future trend would be for a continuation of companies needing to be much closer to their customers.
Perhaps we all, eventually, will be represented by the switchboard business model where every consumer talks directly to every producer?