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The NYTimes ran an article this morning:
And discusses how developing countries are “hungry for content” but do not contribute much to revenues. They call this the International Paradox. While developing countries are increasing traffic on the web, individual users are still on low bandwidth connections. This combined with the generally lower incomes in developing countries, makes it very expensive for web 2.0 companies to deliver their content to these areas. While TechForProgress works solely on a non-profit basis, we understand the necessity for strong, but sustainable business models to fuel growth.
It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but are increasingly finding that the economics of that vision just do not work.
What’s happening is that some companies are wholely blocking developing countries(which is unacceptable), and others are coming up with “lite” versions of their content for low bandwidth users. These, however, band-aide solutions to a more endemic problem: high cost, low bandwidth internet. As some communities/countries are just getting online for the first time in the last several years there is no short term solution to this problem, so what’s really needed is a change in the business model:
Internet start-ups that came of age during the Web 2.0 era, roughly from 2004 to the beginning of the recession at the end of 2007, generally subscribed to a widely accepted blueprint: build huge global audiences with a free service, and let advertising pay the bills.
Developing countries are actually rich countries, resource wise, and a change of thinking is necessary on how to capitalize(sustainably, of course) on this.