Digital Regulation Platform
«
»
«
»

The evolving Internet value chain

31.08.2020

The Internet value chain combines various previously unrelated industries together on one platform, not just within a country but globally. To give just a few examples:

Traditionally, TV and movie content had their own delivery channel. Today, the Internet is the unifying content delivery platform. The broadcasting business model remains the same, based on subscriptions or advertisements, while the mode of delivery is increasingly shifting to the IP platform. This has advantages for consumers who are now able to control what, when, and where to watch, instead of having to plan their entertainment time around the programming schedule of broadcasters.

Kearney[1] compiled an Internet value chain analysis in 2010 and the study was updated in 2016 for the GSMA (GSMA 2016). The study distinguished five segments of the Internet value chain. The Internet value chain in the figure below has been extended to include the demand for digital services and user-generated content. Now the Internet value chain is seen not as a traditional set of sequential components but rather as a self-reinforcing circle.

Internet Value Circle

These six components are:

In the past, the data flow was from content owners to the end user via the public Internet. Today, users create content through social media applications and other ways of uploading data, thus contributing to the content that is being consumed.

Cloud computing, big data, blockchain, and AI enable value creation from the self-reinforcing Internet value circle. These technologies can profile users in terms of the content they consume and the content they produce, allowing online services to be individually targeted. The ability to provide targeted content, services, and advertising provides opportunities for a customized usage experience and new services and new business models.

Endnotes

  1. Internet Value Chain Economics, available here.

References

GSMA. 2016. The Internet Value Chain: A Study on the Economics of the Internet. London: GSMA. https://www.gsma.com/publicpolicy/wp-content/uploads/2016/09/GSMA2016_Report_TheInternetValueChain.pdf.

Last updated on: 02.09.2020