I admit, it was weird when my monthly MasterCard bill first arrived with a total charge of 99 cents for a single music download. I wasn't raised to use credit for such a small purchase. Am I allowed to have such a tiny transaction? Don't they discourage that kind of spending and can MasterCard afford to do that?
Of course they can. It's Chris Anderson's book, The Long Tail that describes how you make a lot more money selling lots of small things rather than a few big ones. My MP3 download was just anther tiny but accepted data transaction that, in the business-to-business and business-to-consumer worlds, you can expect a lot more of. You may not see this behind the apps on your iPhone, but it is already happening.
In this month's magazine I contributed a full-length feature on Web data services. Not Web services or data services, but Web data services. This is a tricky definitional area for me and a lot of others (and I couldn't come up with a better term). But what I'm referring to are Web-based providers that directly or indirectly distribute or support desired feeds of data.
It's a long article and was a lot of work. I might have bitten off too much, but what it boils down to is this: the rise of granular data services and the spread of open application programming interfaces (APIs) has set the stage for a transaction-based data economy.
Yes, the data transaction model already exists, just ask "Free" creditreport.com. Anyone can buy or sell data on the Web. But what triggered this line of thought was partly the rise of mobile apps that combine many data feeds into one presentation, and mostly the dramatic increase of API traffic I keep hearing about from people I talk to. The point is, the emphasis has already shifted from Web site or portal presentations of masses of data to discrete API feeds of granular data to mix and match for a mobile app or mashup.
Most of all, the API is a gateway to collect or spend money (along with its other control and management functions), a kind of point-of-sale data cash register for the Web. That's what I mean by a transaction-based Web data service economy.
Maybe you charge 1/1000th of a penny for a bit of information, maybe a nickel. It's a transaction like any other that depends on the perceived value of the information and the market is already sorting it out.
So, you're not going to need a subscription to freecreditreport.com in the future. You'll likely be more interested in what American Express is saying about your account at the moment than your whole credit history. You'll be able to pay for just that bit of information once only and mix it up with other services for your bank balance and investment plans. You won't even have to figure out how to make it useful for yourself because service providers are going to figure it out for you.
All kinds of new cloud-based and other SaaS providers are jumping on this idea to offer bits of data, analytics, or storage on a use-as-you-need basis that may cost a tiny amount of money. But so are a lot of mainstream businesses and there are several examples in the article. You'll find plenty more examples elsewhere if you look for them. Even Chris Anderson's book is quicker and easier to buy as a data feed than as a hard product if you want it right now.
The long tail of data is upon us.