The problem with mobile C2C

Joe Wee, founder & CTO, Chillingo
22 Dec 2006

"Consumer-to-consumer" or C2C is permeating the world of mobile content. In some circles, we catch a glimpse of illusions of grandeur in the shape of mountains of revenue opportunities hyped by the success of socio-networking sites such as MySpace and YouTube.

How can the industry benefit from a mobile socio-networking phenomenon‾ Indeed, are we witnessing the beginning of the next digital mobile goldrush‾

Companies ranging from network operators to content aggregators/platform enablers have already begun to dip their toes into this concept with varying degrees of success.

Some operators are letting their subscribers sell home-bred video-clips to other subscribers on a revenue-sharing basis. Certain content platform enablers have created community "content market" sites built solely for consumers to sign up and make available digital mobile content for sale, charging a commission per sale for this privilege.

The prevailing model seems to be a framework that electronically facilitates transactions between consumers, while making a nice cut from these transactions. At the outset, it all makes a lot of sense.

Problems surface

Closer scrutiny of the model shows a remarkable resemblance to the successful online auctioning businesses such as eBay that have been prevalent for many years now.

Consumers sign up for an account and flog their wares to other consumers through an account payment system called PayPal. The infrastructure provider washes its hands of responsibility for the wares on offer.

In an auctioning model, C2C seems to work. Consumers buy and sell, and the facilitator reaps the incremental rewards. Nice and simple - job done, everyone's happy. But for mobile content different, some dangers lurk in the cracks of this model, in particular the lack of liability.

According to the law of the land in modern capitalistic countries, companies are bound by contractual and tortuous liability - a situation where they are legally responsible for breach of obligations imposed by the law. Hence, there exists a mature legal framework in business law that gives protection to rights owners from companies that choose to infringe those rights.

If the consumer infringes these rights by choosing to sell someone else's wares without permission, wouldn't piracy be prevalent if unchecked‾ Community-based P2P sharing sites have demonstrated the wide-ranging damage done to business if the mass market decides to condone piracy.

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