Creative Economy faces challenge of ‘Digital Divide’

Valerie | 27 Apr 2009, 14:02

The New York Times has published an article about big online companies such as Facebook and YouTube struggling to make profits in countries other than the USA and those of Western Europe.

UK policy makers have for a long time wrestled with the challenge of a “digital divide” between consumers with ready access to high-speed internet and those without.  But internationally, a growing digital divide between nations is skewing the development of the creative economy between markets with high-speed, low-cost digital distribution and low-speed, high-cost markets.

Michelangelo Volpi, chief executive of Joost, a video site with half its audience outside the United States said:

“It’s a problem every Internet company has. Whenever you have a lot of user-generated material, your bandwidth gets utilised in Asia, the Middle East, Latin America, where bandwidth is expensive and ad rates are ridiculously low.

“If Web companies “really want to make money, they would shut off all those countries.”

Sites such as Hulu are already blocking content to most countries of the world because of copyright reasons, while video sharing site Veoh recently blocked its service from users in Africa, Asia, Latin America and Eastern Europe.  MySpace is following a different approach and trialing a feature for countries with slower Internet connections called Profile Lite, a stripped-down version of the site that is less expensive to display because it requires less bandwidth.

Mashable believes that if other sites such as YouTube and Facebook start to drastically alter their presentation and content for visitors from certain countries, there may soon be not one, but several very different Internets. It is calling for international co-operation to address this challenge, once again underlining the importance of a forum for international discussion of these issues - something which c&binet aims to provide.