The fight for free data – but who will make money from it?

Written by on February 22, 2016 in Guest Blog with 0 Comments

big data, file transfes and sharing filesNetflix plans to tighten its country control, ensuring people can no longer use VPNs to watch another country’s content. Many people feel it is hard to understand why content offerings are restricted in one country, when the internet could offer things globally and content is just data in a certain format.

There are many other actors, for example stock exchanges and even academic organizations, which try their hardest to limit who gets access to their data. Data is becoming a fundamental part of business and companies should find new scalable models to do business with it and accelerate innovation.

Music and movie companies have had a long and quite successful fight to limit the distribution of content. People find it hard to understand that they cannot even on a holiday trip in another country watch their home internet TV services. The reason is that distribution rights and pricing are typically limited to one country. People have used VPNs to avoid these limits, but now, for example, Netflix – probably under the pressure of copyright owners – must start to limit VPN watching.

TV and movies are the best known example of limits to data distribution. There are many other examples too, not necessary exactly the same border and limits, but similar ones. One example is how stock markets try to limit access to real time data.

It is understandable that they want to charge for the data. The problem is very complex models for distributing data and pricing it. Data is typically distributed through third parties, but the end-user organization must make an agreement with the distributor and the stock exchange, and agreements often include large and expensive regular audits for use of the data.

The pricing has a lot of variables, especially if the end-user offer includes online service to customers. There are parties that could use that data, develop many new services and make good business for all parties, but the agreements and arrangements are too complex and get in the way.

A researcher, Alexandra Elbakyan, has set up a service to freely publish more than 48 million science papers. Sci-Hub is a kind of Pirate Bay for scientific papers. A New York district court ordered the site to close, but Elbakyan has decided to fight and also raised a question about availability of scientific data and its ownership. Even top universities can no longer afford access to all science papers their researchers and students would like to use, when the publications that own copyrights have put such high price tags on the articles.

Many companies and also public sector organizations have got excellent results from open data policy. Third parties have developed services and information on the data that bring value to the owner of the data too. It has enabled a networked API economy model for the data and accelerated innovations and new business models.

The question is not really that all parties should give their data for free. It is not the optimal and sustainable model in most cases. Especially in the public sector the free data can work, if it gets services, society and traffic to work better and brings value in that way. But in many cases the data owner must get a reasonable compensation for its data and its effort to collect, format, analyze and offer the data. But what is always fundamental in the API economy is to offer easy access, reasonable prices, and simple terms and conditions to make the model scalable and really then get a lot of users and also third parties that can develop new services based on the data.

Immigration and free movement are now big issues around the world. It is about human beings. But when we talk about digitization and the fourth industrial revolution, which were hot topics also this year in Davos, it is actually not only about whether people can move. If data, digital services and digital money moves in the internet, people can offer and use any service anywhere. It starts to be as big thing for business than the movement of people. It can also offer more equal opportunities around the world.

It is always so that some organizations try to delay changes to protect their own business. Often those delaying organizations are doomed to fail in the longer run, when they were not willing to adapt to the new situation. Now companies and other organizations must adapt to digitization. An important part of that is to find new models to offer and use data and live in the API ecosystem. It especially requires models that are easy to scale globally, achieve volume and accelerate and utilize innovations of third parties. It means clear terms and conditions, reasonable prices and VISA free movement for data and digital services.

Tags: , , ,

About the Author

About the Author: Jouko Ahvenainen is a serial-entrepreneur and Co-Founder of Grow VC Group, a holding entity including over 10 companies, a pioneer in digital finance, fintech and data analytics solutions. Jouko started his work with digital finance and fintech models in 2008 and listed world-class influencer. He participated in changing US finance regulation, getting the Senate and President to allow JOBS Act and has worked with EU and Asian finance regulation. .


If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.