Long live the middleman as agents become distributors and researchers become retailers

Market researchers can be a frustrated bunch. They're always arriving after their clients have chosen their products. All retailers want is for the clever advertisers to sell as much of this stuff as possible.

Forward3D, an internet search marketing firm, has turned that model on its head and become an online retailer. In a recent Wired article the firm explained how they set about doing this.

"The agency analysed the click data of huge volumes of search queries, looking for search terms with a high volume of traffic but a low density of ads for those search terms," says Olivia Solon of Wired.

They chose bird-cages and dog kennels as being things people look for online but cannot usually find. They set up basic websites and, within 12 months, have turned R25 million.

What Forward3D has done is part of a growing trend. Those with direct access to information or services now have the potential to disintermediate established firms.

Andrew Wylie, a literary agent representing Salman Rushdie and Kofi Anan, amongst others, has struck a deal with Amazon to publish electronic versions of books by several of his authors. Random House and HarperCollins, two of the world's biggest publishers, promptly declared their outrage and have threatened to stop publishing any of the authors represented by Wylie.

This would, ordinarily, be sufficient to get any recalcitrant agent back in line. But times are different.

Stieg Larsson, author of the Millennium trilogy, has just sold over 1 million electronic books via the online retailer. All told, Amazon has sold 500,000 of its Kindle electronic readers, and some authors now sell more digital versions of their books than print.

Amazon and Facebook, which only last week announced that it now has 500 million members, have teamed up to offer custom book recommendations.

Wylie may well have felt that he had no choice. The most established writers don't need publishers or agents if they can go straight to the biggest book retailer in the world. New writers may leverage their connections in Facebook to sell direct.

The music industry is already at the mercy of Apple and its ubiquitous iTunes service. New bands think nothing of launching a website and selling their music themselves. Sure, there is still safety in having big music producers bankroll those initial marketing costs but that advantage has been under threat for years.

The first movers will gain the most. We will soon be hearing stories of lucky unknowns selling millions of ebooks cheaply from their Facebook pages.

And then it will become just as chaotic as the long-form blog has become. The first bloggers could garner millions of readers and tremendous excitement. Now, with no barriers to entry, there are so many blogs on so many subjects and of zero literary value.

Expect the same to happen to books.

While there is much opportunity, there is also a lack of maturity.

"Old media" journalists learned the hard way to protect their sources and do their best not to compromise a solid scoop by endangering lives. Wikileaks, which specialises in whistle-blowing and scandal, has just posted 90,000 documents harvested from the CIA on the war in Afghanistan. The names of hundreds of Aghanis working with the US military were published exposing them and their families to potential assassination.

That is an unforgivable breach of ethics by a new media organisation. Not that old media is always noble. Asne Seierstad, Norwegian author of The Bookseller of Kabul, was found guilty of defaming the Afghanistani family who hosted her and became the subject of her best-selling novel.

Never mind, today's rebellious upstarts are tomorrow's crotchety establishment. Many of them will embarrass themselves along the way but such disruption is the lifeblood of innovation.

These are exciting times and, in all this chaos, maybe you too will find an opportunity.