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Is the Internet free-ride over?

By cable in Internet
Tue May 01, 2001 at 05:07:08 PM EST
Tags: Internet (all tags)

Over the past year or two I have noticed that many services on the Internet have changed to a pay-only, or limiting the features to free accounts and offering features that used to be free for extra money.

I call this the "Gotchya! Now you'll have to pay to continue, or else!" model of business. Basically the same thing that drug dealers do, give out samples for free, and then later start charging for them after people are hooked. Most Internet Users want web sites and services to be free, and paid for with banner ads or whatnot. It seems our personal info keeps being sold to spammers from most web sites we registered for.

How long before free web hosters and online forums etc start changing policies to a pay-or-get-out policy? Will K5 and others like it, change to a fee based service? Would you still use it if you had to pay for it? Would free sites be run by individuals and non-profit organizations and the rest are just in it for the money?

Is the free ride really over? Or will it take 5 years or more to get there?

I predict that many users are upset that they no longer have free access, and that the Internet is slowly turning into a corporate pay-per-use service. Many Free ISPS either went out of business, limit the free access, or went to pay-only access.

I am guessing that banner ads, sending us spam-mail, and other gimmicks are not earning companies enough money to keep services free?


Voxel dot net
o Managed Hosting
o VoxCAST Content Delivery
o Raw Infrastructure


Are you upset by free Internet services going pay-only?
o Yes, I want my Internet, and I want it free! 21%
o No, we should pay to access everything. 10%
o Don't know 4%
o Maybe, but some sites should be free and others pay only. 24%
o I refuse to answer such a silly question! 9%
o All your Internet Service are belong to us! 19%
o I don't use the Internet, I am sending this via Mind-Waves. 6%
o What do I know, I am just a clueless newbie? Wanna join my AOL Buddy List? 6%

Votes: 99
Results | Other Polls

Related Links
o Also by cable

Display: Sort:
Is the Internet free-ride over? | 42 comments (30 topical, 12 editorial, 0 hidden)
.com (4.40 / 5) (#1)
by J'raxis on Thu Apr 26, 2001 at 05:52:26 PM EST

I call this the "Gotchya! Now you'll have to pay to continue, or else!" model of business. Basically the same thing that drug dealers do, give out samples for free, and then later start charging for them after people are hooked.
You seem to be assuming any of these dotcoms had a long-term business plan to begin with. :)

-- The Raxis

[ J’raxis·Com | Liberty in your lifetime ]

Then again... (none / 0) (#36)
by Armaphine on Thu May 03, 2001 at 11:12:54 AM EST

The drug dealers seem to be continuing in a fairly brisk trade, despite gov't regulation. Maybe the dotcoms shoudl be so lucky...

Question authority. Don't ask why, just do it.
[ Parent ]

.org (3.50 / 2) (#5)
by error 404 on Thu Apr 26, 2001 at 06:18:18 PM EST

There used to be some free stuff on the web because somebody had an idea, and it could be done either with resources that fell into roundoff error land (personal web sites used a tiny piece of a university or research lab system that was there for other reasons, and people put interesting stuff there) or could be financed as a hobby. Or to promote an organization or idea.

Some of those still exist. And some, while weird, are far from lame. Take a look at ,a href="http://www.sito.org">sito for example. That won't ever make money, and nobody cares because it isn't about money and never was.

Then it started being The New Frontier, and of course you have to be able to make a bunch of money off of it. Never mind how, figure that out once you have your claim staked.

And now, it pretty much is what it is. There will be innovations, sure. But little ones. There will be a next big thing. And it might even be on the web, and maybe even be about the web in some way. It won't be the web. It won't be yet another site, although it will probably have a web site. It isn't that the web failed, it is that it has become what it is. And what it it isn't the money machine that everybody from Canter and Seigel to Bill Gates said it would be.

The web has had lots of different profound effects on our culture, and will continue to. But there is no new economy. People and companies continue to succeed by selling goods and services for a little more than it costs them to produce them, and fail by selling them for a little less or not at all. The net will be a good tool for some. And a money pit for others.

Electrical banana is bound to be the very next phase
- Donovan

You're Right (4.00 / 2) (#7)
by lucas on Thu Apr 26, 2001 at 07:20:50 PM EST

It's a bait-and-switch service plan, sure, but that was the accepted way to do business a year ago. You don't have a business plan, you're going to make up for your VC by selling in volume... you want as much widespread coverage as possible.

This isn't the case now. Companies can't afford to give stuff away for free; those that have are either out of business or are going out of business.

Taiwan made the crappiest stuff in 1999-2000... quality control was terrible. Why? There was a rush to do volume and for the cheapest price possible. Companies were giving out hardware and selling services with it. My ISP (Flashcom, now out of business) gave me a very nice router for free that, thankfully, is still working, but we went through several routers that were bad. I think the router manufacturer is gone, too.

So, while you felt empowered as a consumer (e.g., you were getting a "free ride"), from my point of view, it was at a cost of quality and many other intangible costs. I think about the programmers who signed onto dot-coms and worked ludicrous hours at the expense of their families and lives.

Well... I hope so... kinda (4.00 / 2) (#8)
by cbatt on Thu Apr 26, 2001 at 08:53:12 PM EST

That way we can have a profitable web, in certain sectors. Which means continued employment for me and my kind. Which means the ability to purchase access plans to those sites that I need to frequent... oh, and food.

I don't work for free, so I don't expect to get things for free. When I do, like here at k5, it sure is appreciated. However, I don't expect it.

If the services I require begin to cost, then I'll just have to ask my employer for more money so that I can continue to access those services. My employer should understand that they should give me more money because they are now making a bit more money due to the fact that their clients are actually surviving and they now have an established revenue stream. However, it never works that way unless you've got stock in the company or some other profit sharing scheme, because it takes forever for change to trickle throughout the system.

whatever whatever.

Before you can understand recursion
you must understand recursion.

The free ride could continue (4.25 / 4) (#10)
by RandomPeon on Fri Apr 27, 2001 at 02:34:31 AM EST

Television and radio have been "free rides" or close thereto(cable is a good deal if you like TV) for decades. There are no celeberties to pay here, no RICA (Recording Industry Cartel of America) to pay off, it's a relatively cheap format compared to TV/radio. If they can survive on ads, so can many websites.

The problem is banner ads, which let advertisers gauge immediate feedback from their ads. This ignores everything we know about brand-recognition and other advertising concepts. I've watched over two decades of car commercials and until recently I never thought about "clicking through" ie taking immediate action, on one of them. Now that I'm in the market for a new car, all of that advertising by GM and Ford et al will be worthwile. But if GM ran banner ads, they would conclude they were a dismal failure since I had never clicked one and the ad agency would demand a miniscule rate since clickthrough rates were so low.

Historical note: Radio programs were usually sponsored by one company in the pre-television era, and the ads were sometimes integrated into the show (sort of like the blatant Pepsi/Coke placements in modern movies). This kind of advertising was tried very briefly with television, but the revenue just wasn't high enough, so TV switched to the "magazine format" -many brief, unintegrated ads - that we use today. Websites, a relatively cheap medium where banners are easy to ignore, might go back to the radio format - "And now, a 10 sec flash animation from our sponsor"

Banner ads probably need to mature still, they've got to keep up with ad blockers(host the ads from dynamically shifting IPs, host them from the content provider's domain, whatever), and they've got to become appealing, not annoying. Slashdot and K5 advertisers are doing well, I've clicked through on quite a few, either because I wanted to look at the product or because they were intriguing (Like, "Good Evening Mr. Gates, I'll be your server"). Or we need to come up with a new, non-infuriating ad that is harder to ignore - a quick 5 sec ad when you first visit a domain that day or soemthing....

No, it's not.. (4.00 / 2) (#13)
by chuqui on Fri Apr 27, 2001 at 03:14:51 AM EST

>Television and radio have been "free rides" or close thereto No, it's not. never has been -- you need to study some basic economics. Every time they put a commercial on TV, a company pays for it. The company pays for it out of money it gets from people who buy their product. That money comes from -- you. So every time you buy a beer, or a box of corn flakes, part of that money ends up in the ad budget that buys the ad that pays for the program that you watch on TV for "free". In fact you spend a lot of money every year on ads that pay for TV shows you don't watch and probably hate -- subsidizing other TV watchers habits. It's not free. you're paying for it. Heck, you're paying for stuff you don't watch, too. And they didn't even ask you what to spend it on, like PBS does.
-- Chuq Von Rospach, Internet Gnome <http://www.chuqui.com> <kuro@chuqui.com> "The first rule of holes: If you are in one, stop digging"
[ Parent ]
Duh (none / 0) (#18)
by RandomPeon on Fri Apr 27, 2001 at 11:18:03 AM EST

I meant "free ride" in the same sense as the author - the consumer pays nothing directly and the TV/radio station generates revenue selling ads. The question isn't whether web-advertising costs get passed onto consumers (of course), but whether websites can make money enough money selling just advertising.

[ Parent ]
1995 (3.25 / 4) (#11)
by lokmant on Fri Apr 27, 2001 at 02:47:41 AM EST

The 'Free Rides' stopped in 1995, the year the internet went commercial and the companies started to discover the internet.

One of the first examples, in 1996 anon.penet.fi stopped service, a famous anonymous re-mailer.

The latest example is Napster, being forced by commerce to adjust if not stop its service.

I admit there are alternatives to Napster, but are they as easy to use and have the same number of users? The alternatives are too defragmented, the usefullness of a network depends on its number of users (law of Metcalfe). When an alternative really does get its share of users, the record companies will shift their attention again, see Gnutella that is starting to attract attention despite that Gnutella is supposed to be 'invulnerable'.

It's a long trend that has been started since 1995. Not just now.
"fashionably sensitive, but too cool to care" (jewel)

Napster forced to commerce? (5.00 / 1) (#21)
by Carnage4Life on Fri Apr 27, 2001 at 05:47:04 PM EST

The latest example is Napster, being forced by commerce to adjust if not stop its service.

That is a rather incredibly naive statement to make. Do you think VCs were investing millions of dollars in a file sharing service because "information wants to be free?" Napster planned to be a pay service from day one, it is just convenient that they can now blame it one the record labels.

[ Parent ]
Good point (2.00 / 1) (#24)
by lokmant on Sat Apr 28, 2001 at 03:27:08 AM EST

You raise a good point, I certainly didn't mean to say that VCs invested in Napster so 'information could be free'. But I don't think Napster was meant to be a pay service from day one .. do you think Shawn Fanning intended to make big bucks when he initially wrote Napster?

Or if I _am_ really naive, wasn't it the situation, all the hype commerce created around the internet before the Crash, that drove him?

My idea is that Shawn Fanning wrote a program because he was frustrated with the solutions that were available back then. He states that he only realized the potential after Napster was put up on download.com so 'day one' would be a bit far-fetched.

Anyway, the point is that commerce is driving developments of the internet since 1995.

"fashionably sensitive, but too cool to care" (jewel)
[ Parent ]

There never was a free lunch. (4.50 / 6) (#12)
by chuqui on Fri Apr 27, 2001 at 03:08:11 AM EST

there never was a free lunch on the internet. Someone always paid the bill. Just because someone else buys lunch for the table doesn't mean lunch was free. And if you're at that table often enough, don't look surprised when the check lands on your placemat after a while... In the Good Old Days, the government subsidized parts of the net, and Big Nasty companies subsidized other parts, usually because someone in the tech department was hiding the costs in some obscure budget item in the IT department. But there was always a bill, and someone got to pay it. now -- it's your turn...
-- Chuq Von Rospach, Internet Gnome <http://www.chuqui.com> <kuro@chuqui.com> "The first rule of holes: If you are in one, stop digging"
Really? (4.00 / 2) (#14)
by ti dave on Fri Apr 27, 2001 at 03:28:35 AM EST

"Basically the same thing that drug dealers do, give out samples for free, and then later start charging for them after people are hooked."

For Free??

Damn, I only got a discount, then got jacked up to full price.
Lucky Bastard!


"If you dial," Iran said, eyes open and watching, "for greater venom, then I'll dial the same."

Jazz music (none / 0) (#17)
by meadows_p on Fri Apr 27, 2001 at 10:07:54 AM EST

...and then the dealer's will start playing that devils jazz music, and perhaps eat some babies.

[ Parent ]
or banks (none / 0) (#25)
by Sikpup on Sat Apr 28, 2001 at 04:47:33 AM EST

See the ATM fees...

[ Parent ]
Thoughts... (3.87 / 8) (#15)
by jd on Fri Apr 27, 2001 at 08:30:52 AM EST

Once upon a time, the Internet was essentially run by the US Government. Similar services, in other countries, were funded by their respective Governments.

In other words, we -did- technically pay, but we paid over a MUCH longer time-frame (1 year, as opposed to 10 milliseconds), and we paid evenly, making the =effective= cost, per pay period, as close to zero as makes no odds.

What's more, we paid for the bandwidth, NOT for the transaction. Which makes sense. If you have a 10 gigabit pipe, then the running costs are the same whether you have 1 transaction or 1,000,000. The optic fibre doesn't wear out, and any server is going to require the same level of maintenance, regardless of activity.

This system made considerable sense. Costs were located at the expenses, not at the services. Everyone benefitted, and everyone was happy. Well, everyone except the accountants, who hated and despised this type of model, as it was All Wrong And Evil And Didn't Line Their Feather Nests!

So, the Governments of the world have slowly (or, in the case of the US, quickly) dumped the Internet into the hands of said accountants, who now charge not only for the pipes, but for the content, the services, the accounts, the adverts, the licences and the kitchen sink.

What's happening is we're now paying sometimes as much as ten times over, to the same people, for the same information. Why? Because these people can get away with it.

The Internet costs practically nothing to run. You use a bit of electricity, sure. You need to replace a few wires & fibres, here and there, true. Every 5-10 years, you might even need to replace a hard drive. But as far as the physical infrastructure is concerned, that's it.

For the content, most sites distribute stuff they found on other sites, or stuff they were going to sell via traditional outlets anyway. In the case of news sites, it's often both.

But what about server crashes? See: Watchdog cards. Ok, what about upgrades? Usually only required through sloppy design. Slap a cache on the front, and see what happens. Crackers? If you're running everything SUID & super-user, have not isolated in any way, shape or form the services, have .rhosts files everywhere, no shadow passwords or other secure password mechanism, have no hosts.allow/deny, and make everything read/write/execute, I don't have much sympathy if someone breaks in. If you rolled around in an anthrax pit, and developed anthrax, does it make sense to blame the anthrax for getting in?

Invented figures can justify any argument (none / 0) (#29)
by adamsc on Sun Apr 29, 2001 at 09:12:39 PM EST

Your claim that we're paying for things 10 times over would be more plausible if you didn't underestimate the costs of operation by several times that margin. Any argument can "work" with invented numbers...

<FLAME>The real world has little in common with the simplistic picture painted in your post - if you think watchdog cards solve server crashes, upgrades are due to poor planning and proper security requires only running things non-root and deleting .rhosts, you desparately need to learn more about what a sysadmin really does</FLAME>

[ Parent ]
Another thought... (none / 0) (#32)
by jd on Mon Apr 30, 2001 at 11:25:54 AM EST

If you're going to flame someone, you might want to stop and think first. I've probably sys admined longer than you've known what a computer was.

And, yes, 99.999% of all problems, be they security or whatever, are due to trivial things and not obscure arcana.

There is NOTHING a system admin faces that cannot be fixed simply, quickly and cheaply. The only reason to complicate things is to up the budget estimates.

[ Parent ]

Search-Engines... (5.00 / 3) (#19)
by Parity on Fri Apr 27, 2001 at 04:13:41 PM EST

Personally, I could care less if 'content provider' sites become subscription only; maybe it'll increase the quality of the content if they have to work at keeping customers.

The frightening thing to me, is that search engines are charging to list your site. This makes personal web sites essentially unfindable, unless spidering includes them eventually from somewhere else. Of course there will be free listings, sponsored by civic-minded freedom-of-speech-press-and-software type groups; that's not the point - the point is that J. Random Internet Surfer isn't going to go there. Kinda like freedom of the press in the real world - there's plenty of community papers, college papers, etc, that do their own reporting (well, there -were- ... most community papers are conglomerate owned now...), but you can't find the Backwater Bugle at the newsstand (even if Backwater Village is the home of Senator Suchnsuch and prints up a biography of him using local knowledge; you'll have to read the 2-line summary of that biography in the New York Times and never know why you should vote for or against him, sorry...)

Okay, I'm tangenting; the point is, content providers have a right to charge for content; I'm more concerned about index providers creating a barrier to entry for content providers - a financial barrier to entry that will potentially make it essential to charge for content just to pay the listing fees.

Parity Odd

Search engines and paying for listings (none / 0) (#20)
by cable on Fri Apr 27, 2001 at 04:21:29 PM EST

Well there is always those open directory services like DMOZ that still allow free entries and editing by human beings.

Eventually if Listings have to be paid to get into search engines, the search engines will be showing mostly commercial pages instead of Joe Schmoes's pages. Which means that commercial web sites will get more hits, be visited more often, and make more money. Unless the majority changes to search engines that don't charge money for listings? Here again, the example comes in that paying for a service is cutting down what was available to the public. What next, users have to pay to use the searching services? Otherwise they can't search for web sites, or maybe only the first 10 hits are shown unless they are a paying customer?

Only you, can help prevent Neb Rage!
[ Parent ]

Or maybe Google will rule the world? (none / 0) (#38)
by sera on Fri May 11, 2001 at 03:02:27 PM EST

We'll have to see how it turns out. Yes, there are sites like GoTo.com that charge money for listings. But these days, everybody I know uses Google, not because of ads, but because it gives users what they want -- the right search results, with no bullshit.

Case in point: The other day I was reading a newspaper article that used "Google" as a verb. As in "When you Google my name ..." This was a general-interest, non-techie newspaper, and the interview was with a non-tech.

I think it's sensible to have at least a little optimism about internet users. To varying degrees, most of them will gravitate towards services that are genuinely good for them, although some will do it faster than others.

firmament.to: Every text is an index.
[ Parent ]

Capitalism 101 (4.00 / 2) (#28)
by adamsc on Sun Apr 29, 2001 at 06:56:57 AM EST

I don't know why this is at all surprising. Internet services and sites cost money to run. That money has to come from someone - either directly from a user or indirectly from an advertiser paying for that user's attention. If a source of revenue (advertising) isn't enough, others will have to be found. Congratulations, you've just rediscovered capitalism.

Remember when the free ISPs first started appearing? How everyone asked where the money was coming from? There were quite a few companies which existed only because VCs were pumping money in as quickly as they could - kind of like claiming pigs can fly because you strapped one to a rocket.

Shock! Horror! The Free Ride is Over! (none / 0) (#31)
by Maclir on Sun Apr 29, 2001 at 11:47:31 PM EST

So what do you expect? Who should pay for the server hardware, software, communication links, and the time and effort of people who put together all these services that you expect to use at no cost to yourself? Who will pay the salaries for the sysadmins, the web programmers, content authors?

In the "Good Old Days", governments paid for the Internet, and access was essentially limited to educational instutions, the military, and government and industry R&D areas. So, in effect we all paid, since the 'net was taxpayer funded then.

Simple fact of the capitalist system - you want something, you pay for it. I will provide something for you, you pay me, I make a profit. You want to access the Internet and associated services? Pay up. So what do you do when you get your weekly groceries at the supermarket - expect to just walk out of the store with everything you want for free?

Get real - and stop bellyaching.

a community of volunteers (4.00 / 1) (#34)
by fonebone on Wed May 02, 2001 at 02:05:17 AM EST

There's lots of services that are provided for free, and they can run with very little maintenance, with just server costs and that sort of thing. The busier sites realize they aren't able to profit, or at least make enough to pay the bills. They're then changing their strategy and business model, by charging for, at least, some aspect of their service.

What about all the people using these free services? What do they contribute back? Well, as free services disappear, people will start to learn that they need to replace these pay-sites with free sites. Almost everyone on the internet has some leftover webspace they can donate.. and many people have broadband and run linux, turning any computer into a server where services can be hosted.

Free services won't go away, they'll just be replaced with more smaller services linked together. This is no different from real-life communities (or, those of the long forgotten past) where people volunteer their time and efforts to make life better for everyone else. This is all the excitement of peer-to-peer, but it goes deeper when you realize, not everybody is out to make money.

PHP and Ajax Web Development
Is this really a surprise? (none / 0) (#35)
by Armaphine on Wed May 02, 2001 at 03:30:26 PM EST

Someone has to pay for the bandwidth, the servers, the electric bill, etc. This really seems to be as good of a system as we're going to get. And let's face it, if a pseudo-shareware internet is the best we get, then we're gonna be getting off lucky. At least some services will be free, and if you want more, you pay more. Really, it seems fair enough to me.

Question authority. Don't ask why, just do it.

But how much should I/we/they pay? (none / 0) (#39)
by cable on Fri May 11, 2001 at 06:03:41 PM EST

What would be a fair amount? Do having banner and pop-up ads pay for anything as well? How about having your email address sold to spammers to help pay for the service?

Would $1, $2, or $3 a month be a fair fee, or should it be more like $5 or $10 a month?

What about families that normally couldn't afford to pay Internet connect fees? Are we going to shut them out, or make an exception for them? Would it be more of a PBS/NPR type of deal where 10% of the users pay for 90% of the memberships? Or would it be more of a you don't get those extra features until you pay in advance?

I can see a future where even an ISP will charge extra for other services. Perhaps they will charge extra to access an IRC, Newsgroup, or FTP server? Or maybe they will have their own search engine, that the clients will have to pay for to access?

Some search engines are starting to charge to add web sites to their database. This service used to be free. Will it be weeding out most personal sites and make the search engines search only mostly commercial sites? Are we starting to shut out the low income people from part of the Internet when this starts happening?

Only you, can help prevent Neb Rage!
[ Parent ]

The Free ISPs are almost gone, fewer wired homes (none / 0) (#37)
by cable on Thu May 10, 2001 at 11:07:29 AM EST

At one time, families that couldn't afford to get on the Internet had used Free ISPs to get on. But now "Fewer wired homes as free ISPs vanish" from news.com shows that fewer families are getting on the Internet after the Free ISPs bailed on them.

So much for those low income families getting on the Internet, unless they want to pay for it. Welfarenet is gone! :)

Now comes the dawn of the $5, $10, $15, $20 a month ISP dialup accounts. Maybe the low income families will move to the almost dead BBS systems that don't require a fee. I recall one BBS had a "Hug a SYSOP today, our family thinks we are nuts." offering a free BBS service and paying that monthly phone and electric bill to keep the BBS running. The Internet almost killed the BBS, but some brave SYSOPS have kept some (few if any) running. Some BBSes even have limited Internet access, but those that do usually require a monthly fee to use it.

So what is a fair fee to charge for the service anyway? Is it a good thing that lower income people are being kept off the net unless they pay for it? Are these people considered Virtual Rednecks or Cyber Trailer Trash by some of you?

Only you, can help prevent Neb Rage!

The death of the free web! (5.00 / 1) (#40)
by cable on Mon Jun 04, 2001 at 05:03:50 PM EST

Death of the Free Web, now that the economy has suffered, the web services that were once free may be going away to pay services. Web sites used to be measured in terms of hits per day, they may be measured in how many dollars they generate a day as they go pay-only.

It had to happen eventually, the "free" web had to have someone pay for it. Will this also cut down on the amount of traffic to certain sites, I wonder? Will the only truly free web sites be owned by non-profit orgs and private individuals?

Only you, can help prevent Neb Rage!

Update, Bluelight.com dropping free access (none / 0) (#41)
by Orion Blastar on Tue Jul 31, 2001 at 02:10:56 PM EST

I hear that Bluelight.com is dropping their free 12 hour a month access and replacing it with a $6.95 a month special access for the first few months and then $8.95 a month after.

Any free internet services left? Is Juno next? A lot of my friends are asking me because they cannot afford an Internet service and cannot use it very often enough to justify the $7 to $15 to $20 a month to use the Internet services.
*** Anonymized by intolerant editors at K5 and also IWETHEY who are biased against the mentally ill ***

Free Internet services list (none / 0) (#42)
by Orion Blastar on Tue Jul 31, 2001 at 02:13:15 PM EST

I just found out about Freedom List for a list of Free ISPs and the news on them. I hope this helps anyone find a new free ISP.
*** Anonymized by intolerant editors at K5 and also IWETHEY who are biased against the mentally ill ***
Is the Internet free-ride over? | 42 comments (30 topical, 12 editorial, 0 hidden)
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