posted by Mufasa on Tue 13th Jul 2010 15:57 UTC
IconI read David's post worrying about the end of the free internet and I had to respond, as I strongly disagree that free and advertising-supported content is the future. If anything, it is advertising-supported content that is destined to be a niche strategy, because of new internet technology that enables entirely new models and empowers consumers to have exactly what they want. Advertising will not support much content creation, so I suggest what will.

First, let's dispense with some of the sillier arguments that David puts forward. David asserts that tracking "who is entitled to what" would impose onerous costs but advertising-supported sites also have to track content authorship and renumerate creators, otherwise they will not have much content very soon, as creators will pull all their material. As for tracking users, ad sites track them very closely already. Further, tracking of any sort is cheap to do now that we have software to do it for us. Most people who use the internet can afford to pay plenty for the content they receive, just as they pay hundreds of dollars every month for their cable TV, internet, cellular, telephone, and newspaper subscriptions. For David to spend a penny on each site and pay more than his house payment, he'd have to go to hundreds of thousands of sites every month, a feat that is humanly impossible.

Advertising has long defrayed the costs of content but that was determined by past technology, broadcast technology. With antiquated broadcast communications, such as over-the-air television, radio, or printing presses, the exact same content had to be distributed to everyone, as it wasn't cost-effective to create niche versions for every small group nor for users to repackage content in any way they saw fit. That low-information environment from decades past is the opposite of internet technology today, where a giant forest of information niches flourishes and it is both technically and economically feasible to create a customized feed for one very small niche, you. Back when we all had to watch the same three TV channels, it made sense to lower prices by making users pay with time spent watching ads. No doubt there were many users who would have preferred to have paid more and skipped the ads but that wasn't possible with the tech in the first TV sets and radios, plus the users who preferred to pay less in money and more in time may have been a majority back then. However, now that we definitely do not live in a low-information environment and are much more mindful of our time, many of us use Tivo or browser adblockers to get rid of ads. Many people rent or buy full seasons of TV shows on DVD or Amazon/Netflix/iTunes rather than having to waste their time sitting through ads. Just as with file-sharing, the ad-blocking genie is out of the bottle. Advertising will be dead within a decade or two, because it is now possible to avoid ads and most consumers want to avoid them.

It is true that the internet has cut distribution and some other content costs dramatically, but there are still many content creators and editors who need to get paid for their work and online advertising has come nowhere close to paying them. Total newspaper advertising revenue has crashed to 1963 levels and online advertising is still only around 5-10% of newspaper advertising revenue. There will always be sites like OSNews that are primarily free and voluntary but the question isn't how we pay for OSNews: it's how we pay for the myriad sites that OSNews links to every day, that pay their writers to report the news or analyze it. Without those sites paying their writers to ferret out new information and write about it, OSNews would have much less to link to.

As for the claim that information wants to be free, I cannot imagine a dumber or more overused saying from the last couple decades. First, saying information wants to be free is as inane as saying oranges want to be free. The truth is that the lowered costs of information distribution have opened up media monopolies to rabid competition for the first time, but it still costs money to find, report, and edit news and produce other content, activity that advertising will not support. I will go further than David and assert that no existing media firm will survive the transition online, because media is now a highly competitive environment that they are wholly unfamiliar with. That's not to say that similar content won't be created and paid for, it just won't be created by the media behemoths of the past. In this turmoil during the transition online, David may want to hop from free site to free site, watching each one die off after a little while, but soon there will be no free news sites left, when all their old print subscribers are dead and unable to subsidize his free habit.

So what's the solution for paying content creators? Micropayments. The internet wouldn't have to become AOL to sustain a paid model, all you'd have to do is deploy micropayments, ie every blog that you go to takes a fraction of a cent from your micropayments account for every post that you read. Technically, micropayments are fairly easy to implement: the only reason it hasn't been widely deployed is because it has to be dead simple to use, UI isses that the few past micropayments startups haven't been up to addressing (for a comparison, we still don't have a common single sign-on system, despite the obvious need for it), and because of the currently mildly popular cult of free that reflexively dismisses paying for content. The AOL model, where all content is served from a single technology platform or walled garden that compels payment, is long since dead and never coming back, but that doesn't mean we can't come up with a better paid model to replace it.

However, we do not have micropayments yet, so what is the way forward? Per-site subscription and micropayment systems are a workable intermediate step. Content sites like OSNews or Ars Technica could implement a subscription system, where I pay $10 up front and have access to paid articles either for a limited time or based on how many articles I click on. I have paid for a subscription to OSNews in the past, I'd do so again if there were content worth buying. As more sites start using subscriptions, particularly in the form of an internal micropayment system, it would be a natural transition for third-party micropayment providers to consolidate this functionality over time, so that you wouldn't have to log in separately for every paid site that you frequent.

There are many people who don't accept that they must pay for content and will summarily dismiss anyone who claims otherwise. I remind them of the old saying, "You get what you pay for." If we were all unwilling to pay for content, anyone who is good enough to make money from creating content would be driven to other professions, where they can actually get paid. We have already gotten a vision of what that would look like and it is not a pretty sight. The way forward is to pay for content, initially through subscriptions and soon through micropayments.

e p (4)    47 Comment(s)

Technology White Papers

See More