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News & Insights

News & Insights

Open and Closed

The models for information services are based on two basic revenue streams: advertising and subscriptions. There are a few free services based on donations (a loosey-goosey form of subscription), some pay-per-use services (a limited form of “subscription”), and a lot of services that blend the two streams in different proportions. So where does “open data” fit in to all of this?

Right now open data is primarily driving government information services. The model for these services is “free,” meaning they were built by private companies like Socrata and paid for by your tax dollars, but there is absolutely no reason open data sets could not be used by private firms to build more robust and feature-rich information services.

Key to making this happen is a new breed of open data evangelists in academia and nonprofits. These tech-savvy data scientists are busily connecting the dots that allow data that is “available,” but virtually unusable, into APIs that allow the level of granularity, normalization, and accessibility required to create functional information services. MIT’s Billion Prices Project, ProPublica, and Open Corporates are just three of these invaluable “middlemen” tapping donations, grants, and crowdsourcing to make open data more than just a promise.

As these APIs proliferate it is very likely that the private sector will jump in to create hundreds of new services. This intense competition due to the lower “barrier to entry” may lead to a generation of free, ad-supported services with add-on pay-per-use services associated with them. This in turn raises the bar for functional sophistication and could mean that we are in for a true renaissance of the promise of the Internet (deep, interlinked data, with minimal barriers to access) and the spoils of success going to those with the most functional and creative software.

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