Frameworks, Strategies and Tools
Edited by M. A. Quaddus and M. A.B. Siddique
Chapter 10: Customer Resources and Economic Sustainability of Online Channels
1 Oleg V. Pavlov INTRODUCTION The Internet boom of the 1990s ushered in a great number of online applications including web browsers, newsgroups, online shopping, and online auctions. While many Internet applications were embraced by the industry and the public and did not stir much controversy, two applications stand out for achieving the status of notoriety: the commercial e-mail and online peer-to-peer file-sharing networks. Commercial e-mail and filesharing networks enabled online marketing and distribution channels that have been growing in popularity and have been successful in overcoming threats to their economic sustainability. The production of commercial e-mail, or spam, has been increasing despite the minatory actions by regulators, Internet service providers, IT managers and vendors of anti-spam products (Economist, 2004; Kleiner, 2008). Spam was under 10 per cent of the global e-mail traffic in 2000, but it now constitutes over 90 per cent of all e-mail traffic. The inbox clutter due to spam has led to a strong sentiment in society against commercial e-mail. Some even go so far as to say that ‘spam has ruined the Internet’ (Fallows, 2003). But electronic mail has become an important marketing channel in many organizations (Gatti, 2004a). In 2007, marketers spent about $500 million on e-mail advertising and generated about $23 billion in sales (Magill, 2007). The music and movie industries resisted online file sharing on the grounds that it violates copyright laws, causes millions of dollars in lost music and movie sales and erodes the very financial incentives that sustain the creative...
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