Distribution: Storefronts & Gatekeepers

Consumers and producers of software are connected today through an intermediary, the storefront. Decades ago, people would walk into retail stores and buy software that was imprinted onto a physical medium, such as Microsoft Windows.

In the 1990s and early 2000s, digital experiences were primarily hosted on desktops and laptops running Microsoft Windows. At the time Windows was a product in its own right in addition to serving as a foundation that enabled a market for other software, including software that Microsoft would make. This market was not in digital space, it was in the physical world, diffused across a pool of "brick and mortar" retail businesses. The supply of this software to the market was restricted by what these physical retailers were prepared to supply to their customers - these retailers were businesses with audiences of their own.

The emergence of digital marketplaces for digital software was constrained by network infrastructure and computational power of devices. In the 2000s they could be found on desktop computers running Windows (e.g. popular gaming storefront Steam), mobile devices (e.g. the App Store on iOS) as well as other classes of devices such as the digital games console, the Xbox 360 - this particular digital market was not a perfect reflection of the physical market in its earliest incarnations for technological reasons, instead it was largely stocked with content-related augmentations for software rather than executable software itself.

Digital storefronts have a number of things in common with other kinds of software platforms. They are operated by businesses and are associated with their own intellectual property. They may be one of many options in a market. Today on desktop platforms it is possible to access many storefronts that may sell identical products but only grant access rights through their distribution channel. Digital storefronts must also generally establish confidence in order to continue to generate revenue.

In other ways they are much less like other software. Many kinds of software products attempt to satisfy the same real world need, but I struggle to think of any other product class that attempts to do so in such a similar manner across many distinct projects. It's not too hard to find evidence of this - anyone can search online for a range of solutions to start your own digital storefront to sell physical goods via the world wide web within minutes. While it is possible from a technical perspective to create digital storefronts for software, companies are not generally enabled to do this. Enter the concept of gatekeepers.

Earlier I mentioned that on desktop platforms there is a market for storefronts. Desktop platforms have traditionally been considered open by software developers as it is possible in principle for anyone to produce and distribute software that others can run on their own compatible device. Digital games consoles and mobile platforms are by contrast considered closed platforms where this is not possible. As a software developer, you cannot reach an audience on these platforms without passing through a gatekeeper. This gatekeeper is in many cases the owner and maintainer of the software platform that software runs on. Apple, Google, Microsoft, Nintendo, Sony are all examples of gatekeepers to a closed platform.

To some extent this is easily defensible. For closed platforms, the storefronts and all of the software available through them inform the relationship that hosts have with their audience, and the hosts have a natural interest in managing that relationship. When an individual buys an iPhone, they are to some extent expressing confidence in Apple, the physical device, iOS, and the App Store. For producers in the digital market accessible through the App Store there is an ever-present precarity. At any moment, a gatekeeper can alter the deal and place new restrictions on a digital factory, which can bubble upward to impact projects, businesses and markets. Sometimes this happens with a significant notice period, and at other times it does not.

Where gatekeepers exist there is a power struggle over which relationship matters more - the one between a user and the host or the user and a particular unit of software that is hosted. Gatekeepers frequently place restrictions on precisely how users may be communicated with which certainly has an effect on the capacity to meet certain expectations at various layers. For instance, if an app must provide a commission on all purchases to a gatekeeper this will affect the economics of the project (and perhaps also the business and the overall market). If an app is unable to provide a link inviting users to join a focused community, this will also the ability to form an audience for the intellectual property and for a particular project. If an app is unable to communicate the requirements for access rights, such as when an app may change its business model, this could have similar material impacts. These are not hypotheses, these are contemporary issues that users are concerned about.

The power struggle continues.

Until next time.