The recent bloodbath among online content peddlers and digital media proselytisers can be traced to two deadly sins. The first was to assume that traffic equals sales. In other words, that a miraculous conversion will spontaneously occur among hordes of visitors to a web site. It was taken as an article of faith that a certain percentage of this mass will inevitably and nigh hypnotically reach for their bulging pocketbooks and purchase content, however packaged. Moreover, ad revenues (more reasonably) were assumed to be closely correlated with "eyeballs". This myth led to an obsession with counters, page hits, impressions, unique visitors, statistics and demographics.

It failed, however, to take into account dwindling efficacy of what Seth Godin, in his brilliant essay ("Unleashing IdeaVirus"), calls "Interruption Marketing" - ads, banners, spam and fliers. It also ignored, at its peril, ethos of free content and open source prevalent among Internet opinion leaders, movers and shapers. These two neglected aspects of Internet hype and culture led to trouncing of erstwhile promising web media companies while their business models were exposed as wishful thinking.

The second mistake was to exclusively cater to needs of a highly idiosyncratic group of people (Silicone Valley geeks and nerds). The assumption that USA (let alone rest of world) is Silicone Valley writ large proved to be calamitous to industry.

In one word: disintermediation

The gradual removal of layers of content brokering and intermediation - mainly in manufacturing marketing - is continuation of a long term trend. Consider music for instance. Streaming audio on internet ("soft radio"), or downloadable MP3 files may render CD obsolete - but they were preceded by radio music broadcasts. But novelty is that Internet provides a venue for marketing of niche products and reduces barriers to entry previously imposed by need to invest in costly "branding" campaigns and manufacturing and distribution activities.

This trend is also likely to restore balance between artists and commercial exploiters of their products. The very definition of "artist" will expand to encompass all creative people. One will seek to distinguish oneself, to "brand" oneself and to auction one's services, ideas, products, designs, experience, physique, or biography, etc. directly to end-users and consumers. This is a return to pre-industrial times when artisans ruled economic scene. Work stability will suffer and work mobility will increase in a landscape of shifting allegiances, head hunting, remote collaboration, and similar labour market trends.

But distributors, publishers, and record companies are not going to vanish. They are going to metamorphose. This is because they fulfil a few functions and provide a few services whose importance is only enhanced by "free for all" Internet culture.

Content intermediaries grade content and separate qualitative from ephemeral and atrocious. The deluge of self-published and vanity published e-books, music tracks and art works has generated few masterpieces and a lot of trash. The absence of judicious filtering has unjustly given a bad name to whole segments of industry (e.g., small, or web-based publishers). Consumers - inundated, disappointed and exhausted - will pay a premium for content rating services. Though driven by crass commercial considerations, most publishers and record companies do apply certain quality standards routinely and thus are positioned to provide these rating services reliably.