Types of E-Commerce

Interestingly, P2P (Peer-to-Peer) is listed as one of the major types of e-commerce in my recommended textbook for a module which introduces what e-commerce is. It states:

Since 1999, entrepreneurs and venture capitalists have attempted to adapt various aspects of peer-to-peer technology into P2P e-commerce. To date there have been very few successful commercial applications of P2P e-commerce with the notable exception of illegal downloading of copyrighted music.

The text then continued to give Napster, a file sharing service created in 1999, as an example.

Strictly speaking, the text is not accurate in two counts:

  • Firstly, although it’s true that Napster uses P2P technology, Napster was not created to perform e-commerce. The founder Shawn Fanning created Napster just to have an easier method of finding digital music. In fact, I would suggest that P2P e-commerce was non-existent at that period of time.
  • Secondly, “to date” means 2006, which was the date that the textbook was published; and the P2P e-commerce scene has since then changed. This is why I never believe in buying technology related reference books. They are usually outdated by the time they are published.

Anyways, I’ve decided that I shall feature one of the commercial applications of P2P e-commerce.

Joost

From Wikipedia:

Joost is a system for distributing TV shows and other forms of video over the Web using peer-to-peer TV technology, created by Niklas Zennström and Janus Friis (founders of Skype and Kazaa) […] The program is based on P2PTV technology and is expected to deliver (relaying) near-TV resolution images.

P2P technology was chosen because it can greatly reduce the cost of delivering the bandwidth demanding content to users. P2P allows the servers to serve only a handful of clients. Each of the clients is in turn responsible for propagating the stream to more downstream clients and so on. This moves the distribution costs from the channel owner to the user.

By making exclusive deals with companies such as Warner Music, MTV Networks and film studio Paramount Pictures, Joost was setup with the aim of becoming an Internet TV channel by streaming their video content over the Internet. Currently, Joost generates its revenues mainly from streaming advertisements in between the shows, just like traditional TV channels. Till date, Joost has 40 advertisers including Sony Pictures, BMW, and Sprite. The only limitation Joost has right now is the lack of internation licencing arrangement. Most content are available for streaming in the U.S. only and that leaves users from other countries (such as Singapore) stuck with rather minimal content.

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