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[P]
Content is not king

By mpawlo in Internet
Wed Jun 06, 2001 at 05:46:02 PM EST
Tags: Internet (all tags)
Internet

Users are willing to pay for point-to-point communication. They are not willing to pay for content. How will your favourite web site survive?


The web made the Internet a new media phenomena. However, the business model for web content is still to be determined. Web advertising is not yet a huge thing. It is not disappearing though, Internet ad spending in the US increased 78 percent in 2000 over the previous years total of $4.6 billion, according to new numbers from the Interactive Advertising Bureau (formerly known as the Internet Advertising Bureau).

The figure may sound impressive, but compare it to NABs estimations on TV advertising. The amount the NAB estimated TV station owners would make in advertising in 2000 was USD 25 billion. It's hard to find an exact figure, but this is probably on the conservative side. Other tv advertising studies speaks of USD 40 billion spent in 1999 to advertise on broadcast television.

In Sweden and in the US, web sites providing content now die the dotcom death. This is because of a number of reasons, such as reliance on venture capital, poorly managed companies, but also because of lack of payment for content. The latter is both in respect of users and advertisers.

AT&T researcher Andrew Odlyzko thinks that people are willing to pay for point-to-point communication but rarely for content. Odlyzko concludes this from historical obsverations. IBM has published a summary of Odlyzkos findings.

On a related note, Slashdot ran a story on Telstras new pricing policy. In short, Telstra is restricting data download to three gigabytes per month with additional downloading attracting a hefty 35-cent fee per megabyte ($AU). Usage after that 3 gigabyte allowance is limited to the internal network if the customer does not choose to pay the fees for excess traffic.

Content is king, but distribution is King Kong.

However, if Telstra is charging it's members for download, why shouldn't content providers charge the ISPs and access providers for download?

I want my favourite web site to survive. Someone has to pay for it. Micropayments seems to be far away. Thus, I won't be able to pay on a pay-per-view or download basis. Subscriptions are very difficult to administrate, especially on a global basis. Advertising is going slow. So I suggest that the ISPs should pay for our beloved content.

However, this is not very likely. An access provider won't gain from paying for content. Download will only increase it's costs. So maybe the access provider will pay for content, but then the customer will immediately be charged with the download. I have to agree with Odlyzko, most customers are not willing to pay for content like that.

My conclusion is that resistance is futile. Your favourite web site will eventually die or at least be substantially downsized. And I will have to settle with web sites funded by bundling and other revenue streams (such as magazine subscriptions and commercial messages) and web sites run by enthusiasts.

I would be very interested in other views from K5 members. Fortunately, you can think of models that will keep your favourite web site alive.

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Poll
How will you pay for content?
o Not at all 41%
o With my VISA 6%
o Micropayments 22%
o Annual subscription 10%
o Through my access provider on a statistical basis 4%
o Through my access provider on an actual use basis 6%
o Other pay-per-view/download model 0%
o Couldn't care less 8%

Votes: 48
Results | Other Polls

Related Links
o Slashdot
o Internet ad spending
o Interactiv e Advertising Bureau
o NABs estimations
o Other tv advertising studies
o Andrew Odlyzko
o Odlyzkos findings
o Telstras new pricing policy
o resistance is futile
o Also by mpawlo


Display: Sort:
Content is not king | 57 comments (57 topical, editorial, 0 hidden)
Feh (4.00 / 5) (#1)
by DesiredUsername on Wed Jun 06, 2001 at 03:23:18 PM EST

Except for K5, I do almost all my browsing on sites "run by enthusiasts". Which is exactly why I, and presumably a lot of other people, don't want to pay for content--we don't have to.

For instance, right now I am working through a (quite large) physics problem set. It has answers with explanations, download Interactive Physics demos and MPEG movies thereof. All for free from the University of Berkeley.

Sure, I used Google, a "commercial" service, to find it. But if Google didn't exist, I'd just write my own search bot. I'd also probably post my results to the web and pool them with other people doing the same--eventually we'd be performing, for free as enthusiasts, the same service that Google performs.

The Internet is the ultimate (so far) capitalist marketplace. Information (about prices, etc) spreads so fast and manufacturing costs (typing up a webpage) are so low that prices are forced almost exactly as low as the lowest asking price of all sellers. And people are finding out that that number is indistinguishable from zero. Which is driving businesses out of business. But so what? The actual providers (the ones charging nothing) are remaining in "business"--so the web won't die.

Play 囲碁
Except for K5...? (none / 0) (#3)
by fluffy grue on Wed Jun 06, 2001 at 03:28:26 PM EST

Except for K5, I do almost all my browsing on sites "run by enthusiasts". Which is exactly why I, and presumably a lot of other people, don't want to pay for content--we don't have to.

I hope you realize that K5 is also run by enthusiasts.


--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

Amateurs != Enthusiasts (4.00 / 1) (#9)
by rusty on Wed Jun 06, 2001 at 04:46:11 PM EST

We may be amateurs, but I stopped being an enthusiast a long time ago. Now all of you shut up and get the hell out of my yard!

;-)

____
Not the real rusty
[ Parent ]

Aggressive popups (2.00 / 1) (#2)
by AgentGray on Wed Jun 06, 2001 at 03:26:42 PM EST

What really gets me are the popups that follow you around or make you wait by using some type of java or DHTML animation.

Say you go to a news site and you can't read the news because some stupid ad is covering the text. You have to sit there and wait for it to do it's crap. I think Yahoo is experimenting with this.

I've even heard of instances where someone will close their browser and the popup will open 30-60 seconds later, say, while the user was typing in Word.

Of course, they were all running IE, but I imagine it'll soon happen in other browsers.

Yes, I voted on this too. I'm such a hypocrite.

This can be stopped cold (none / 0) (#10)
by localroger on Wed Jun 06, 2001 at 05:45:35 PM EST

There is no way at all for websites to overcome the use of proxy-based web rewriters. Adbusters is a simple example; the amazing Proxomitron is a much more versatile example. Basically the proxy software actually reads the webpage, and your browser (set to some port other than 80, so it contacts the proxy server instead of the real web) gets what the proxy server hashes out of it. The Proxomitron allows very selective automatic rewriting of the Web. You can disable all those javascript methods that are so annoying while still reading the real content, and if they come up with new methods you can come up with new filters to block them. The only way around this is for the entire Web to switch to some standard other than HTML where you aren't downloading source any more.

I can haz blog!
[ Parent ]

What popups? (none / 0) (#14)
by greycat on Thu Jun 07, 2001 at 10:59:31 AM EST

Edit -> Preferences... -> Advanced (not the arrow, the actual word)
[ ] Enable Java
[ ] Enable JavaScript


Adjust to fit your browser. Your mileage may vary.

[ Parent ]
Giving the ISP control over what the user can see (3.50 / 2) (#4)
by ajf on Wed Jun 06, 2001 at 03:49:29 PM EST

The idea sounds unworkable, and detrimental to the web's diversity.

Suppose I go to example.com, a news site about the new .lemur domain. None of my ISP's other customers have ever visited the site, so the ISP doesn't have an existing business relationship with example.com. How much does the ISP pay example.com? How do they pay it? What happens if the ISP thinks example.com wants too much?

It seems like this would limit the end user to the sites their ISP wants to deal with. "Sorry, Mr AOL User, you can't visit MSNBC's web site. Perhaps you'd like to see the news at CNN instead?"



"I have no idea if it is true or not, but given what you read on the Web, it seems to be a valid concern." -jjayson
Fragmentation (3.00 / 1) (#5)
by mpawlo on Wed Jun 06, 2001 at 03:57:24 PM EST

Indeed, fragmentation is a logical consequence to the suggested development. This is visible in the cable tv payment model. When I spent a lot of time in New York last year I was always frustrated over the fact that I couldn't get HBO to watch Sopranos. This could happen to the web, sepecially in respect of the development of broadband services. These services are often provided by the cable cabal (not to be confused with the K5 cabal) so I guess they will think of the business model pretty soon.

Every heard of broadband portals?
They are very much a la mode in Sweden.
Pawlo.com
[ Parent ]

small tax? (3.00 / 1) (#6)
by ODiV on Wed Jun 06, 2001 at 04:12:46 PM EST

Mmmmm, socialism.

How about a small tax that is payed along with your ISP fee (small as in really small). This money is devided amongst websites that are listed as "Non-corporate content providers" based on use.

Immediate problems I see with this is the hassle involved (for ISPs if they collected and distributed the money, although having it automated would be pretty cool). Having to register as a "Non-corporate content provider" and the people you pay to keep a list of who is and who isn't... and who's just pretending to be. I guess there's nothing wrong with being corporate and wanting to get paid this way... but there are some sites that would opt out of this (advertisment sites) you would think.

An extra dollar or two on your Internet bill won't kill you. Interesting idea anyway, not to say that I know how to make it work (or even if it can).


--
[ odiv.net ]
Taxation and distributed wealth (3.00 / 1) (#8)
by mpawlo on Wed Jun 06, 2001 at 04:42:06 PM EST

You raise a very interesting question. In respect of such taxation, would the tax be distributed to the major web sites or the small ones? Or maybe to all?

In my mind, I thought that the web sites with the most visitors should share the collected funds. However, if I understand you right, the funds should be distributed to small and non-commercial web sites?

Very interesting, indeed. You could also draw a parallell to tape taxation. I don't know the tax law in the US, but in Europe many countries now have tape taxation, meaning that tape manufacturers need to pay a special fee to the record industry. Thus, in order to sell an empty tape, you need to pay a fee in a sort of pre-emptive strike towards music piracy. Maybe we will see something similar on the Internet content arena?
Pawlo.com
[ Parent ]

Re: small tax? (none / 0) (#13)
by greycat on Thu Jun 07, 2001 at 10:49:31 AM EST

How about a small tax that is payed along with your ISP fee (small as in really small). This money is devided amongst websites that are listed as "Non-corporate content providers" based on use.

So we'd have... from each according to his bandwidth use, to each according to his hit counter?

It's already bad enough that commercial "content providers" are destroying the ability to cache the Web, just so that they can generate more ad hits. This proposed tax would actually encourage people to further destroy cacheability by directly paying them for doing so!

Just imagine how slow the World Wide Wait would be if you had to download every image on every page, every time you visited that page. Are you planning to pay people for each byte they transmit? That will encourage people to make huge dynamic pages, with dozens of images (and a timestamp in each one's URL), so that just visiting their site's front page causes a bandwidth burden of a megabyte or more. Or are you planning to pay people for the number of pages they transmit? Welcome to 27-page new stories with one paragraph on each page!



[ Parent ]
Micropayments (3.00 / 1) (#7)
by maveness on Wed Jun 06, 2001 at 04:39:29 PM EST

In the long run, small independent websites without deep pockets will need micropayments to survive. Unless they have a niche audience that is both sufficiently enthusiastic and flush enough to pony up subscription fees, the small sites will die without a steady trickle of income from page views. Putting up a webpage is NOT free -- putting up a webpage with interesting, fresh, and sophisticated content can be quite expensive. Unless we want the web to become even more starkly divided between giant corporate owners and highly educated hobbyists with time on their hands, some form of payment is going to have to change hands on a regular basis. But the advertising model from broadcast just doesn't work well in this medium. I'm imagining some kind of browser-level micropayment plug-in, set up in conjunction with online banking systems. It's a rats nest of issues (Hailstorm, anyone? Aaaaagh.) -- not the least of which is ensuring privacy and security.

*********
Latest fortune cookie: "The current year will bring you much happiness." As if.

Pay-Per-View for Digital Content: RIP? (4.00 / 1) (#11)
by quam on Wed Jun 06, 2001 at 07:31:24 PM EST

After reading this article, it seems death's drum finished beating for the pay-per-view model with digital content. Has it? What sites require, or have required, payment for individual content on the Web?

For instance, is there a site which attempted to charge for the viewing of an individual article? Sites such as TheStreet and WSJ Interactive have implemented a subscription based model, but not a pay-per-view model. Also, pr0n sites generally implement a subscription model rather than pay-per-view. Unless I am unaware of numerous other sites on the Web (which is likely), on the Web's face, it seems most sites have not begun to experiment with an implementation of a pay-per-view model and, therefore, death's drum has not actually sounded.

While I am unacquainted with such sites, it seems the pay-per-view model would work with some types of sites, such as sites selling college essays/papers.

-- U.S. Patent 5443036 concerns a device for encouraging a cat to exercise by chasing a light spot.
Micropayments (4.00 / 1) (#12)
by strumco on Thu Jun 07, 2001 at 05:14:11 AM EST

it seems death's drum finished beating for the pay-per-view model with digital content. Has it?
It seems to me that in the Net community we are often too quick to write off the immediate past as the last word on a given subject ("The browser wars are over; Netscape won! Ooops.")

We've been waiting for a viable micro-payments/pay-per-view system for so long, we've assumed that it ain't going to happen.

But, the reality is that we haven't been waiting that long. Further, the reality is that we could have micropayments now if customers were prepared to use it. The general (probably correct) perception amongst content providers is that customers won't, just yet.

There's still too much free stuff for most web users to have any incentive to shell out money. And existing micropayments systems are still a little too clunky to be friendly to the majority. Free stuff isn't just free - it's easier.

It may be that micropayments will first emerge in an environment where subscription already operates; customers will be reluctant to pay a yearly subscription to read single articles, the content provider will regret each lost "sale", and will look to micropayments as a parallel provision to subscription.

{Disclosure: I work for a company working on micropayments solutions}
{Further disclosure: I've always wanted to have something to disclose.}

DC
http://www.strum.co.uk
[ Parent ]

Content is still there (none / 0) (#15)
by prostoalex on Fri Jun 08, 2001 at 12:59:55 AM EST

Well, the pendulum of the Internet advertising has been swinging back and forth, with the bandwagons that "content is the king" to the bandwagons of people who believe that content doesn't really matter.

Perhaps we are forgetting that advertising model isn't that flawed for a content publication, many magazines, newspapers, and television stations operate purely on the advertising principles. Subscription pays, but the publications try to keep the subscription rates low to avoid the users dropping the subscriptions.

Communication is useless unless you have something to communicate about and I think that currently people become used to the Internet as a free content distribution network. If a site wants to survive, either they got to offer a better deal to advertisers, or attrack the subscribing users, which won't be paying for something they can get else somewhere else for free.

Here is a misconception (none / 0) (#16)
by vla1den on Sun Jun 10, 2001 at 06:45:25 PM EST

You state that web advertising, micro-payments, and subscriptions are not going to pay for your website to survive. You also observe that "people are willing to pay for point-to-point communication".
Your conclusion: resistance is futile.
Why?
If you can determine what people are willing to pay money for, then ask yourself a simple question: is your site providing this to people? Is your site any help to point-to-point communication? If it is not - then why bother thinking about "web advertising, micro-payments, and subscriptions"? You just stated this pretty clear: value is in point-to-point communication. If your site does not have value why do you expect it to survive? Or, If you want your site to survive why not to add some value to it? Work on providing point-to-point communication service on your site, that should be a solution for you.

I would agree that content is not a king. Service is. And I do believe that web site can be a great communication service. Not exactly point-to-point, but point-to-pointS - that's for sure.



...what the next best thing is going to be?
I'm sailing away (1.66 / 3) (#17)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:09:32 AM EST

I'm sailing away

Here we go (1.66 / 3) (#18)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:10:12 AM EST

With more of the same

And she's climbing (1.66 / 3) (#19)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:12:21 AM EST

A stairway to heaven

Come on (1.66 / 3) (#20)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:14:57 AM EST

do the locomotion with me

American girls are mean (1.66 / 3) (#21)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:19:25 AM EST

why are american girls mean

but if you hurt what's mine (1.66 / 3) (#22)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:26:14 AM EST

I'll sure as hell retaliate

Say mister (1.66 / 3) (#23)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:27:56 AM EST

have you seen a silver poodle with a ribbon in his hair

Lease an Audi (1.66 / 3) (#24)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:30:46 AM EST

for $499 per month for 3 years

I disagree (1.66 / 3) (#25)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:32:48 AM EST

I think that it's all a matter of proper planning and proper execution. It's fast and easy with no obligations. Call now

I ask again (1.66 / 3) (#26)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:38:44 AM EST

why are american girls so rough?

If you want to make out (1.66 / 3) (#27)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:41:23 AM EST

you gotta take her out

It's a weekend getaway (1.66 / 3) (#28)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:43:11 AM EST

we're giving away a trip for two every week, including a trip to the Bahamas.

next time you make pland to fly (1.66 / 3) (#29)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:44:47 AM EST

settle for nothing less

Tomorrow tomorrow (1.66 / 3) (#30)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:50:41 AM EST

It's only a day away

Pizza (1.66 / 3) (#31)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:55:57 AM EST

It's what's for breakfast.

Pizza (1.66 / 3) (#32)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:57:53 AM EST

It's the other white meat

Pizza (1.66 / 3) (#33)
by Frank L Rizzo on Thu Aug 09, 2001 at 09:59:11 AM EST

It's what's for dinner

Hello (1.40 / 5) (#34)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:03:14 AM EST

World

If you feel like leaving (1.66 / 3) (#35)
by Frank L Rizzo on Thu Aug 09, 2001 at 10:05:20 AM EST

you know you can go

It's you and me forever (1.40 / 5) (#36)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:06:01 AM EST

Sarah, smile.

Enjoy (1.40 / 5) (#37)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:06:40 AM EST

Coca-Cola

Mmmmm this tastes (1.66 / 3) (#38)
by Frank L Rizzo on Thu Aug 09, 2001 at 10:07:23 AM EST

just like chicken

Which begs the question (1.40 / 5) (#39)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:08:00 AM EST

What does chicken taste like?

No, no, no. (5.00 / 1) (#57)
by CaptainZornchugger on Tue Aug 14, 2001 at 08:00:04 PM EST

It raises that question, not begs it. Begging the question is something completely different.


Look at that chord structure. There's sadness in that chord structure.
[ Parent ]
la de da (1.66 / 3) (#40)
by Frank L Rizzo on Thu Aug 09, 2001 at 10:23:10 AM EST

tra la la

fa la la (1.40 / 5) (#41)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:23:24 AM EST

dum de dum dum

And one for good measure (1.66 / 3) (#42)
by Frank L Rizzo on Thu Aug 09, 2001 at 10:24:16 AM EST

he's just lost his mind

I see now (1.40 / 5) (#43)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:24:56 AM EST

So that's how it goes

Posting comments (1.50 / 4) (#44)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:26:34 AM EST

posting comments for Jesus

It's not the heat (1.40 / 5) (#45)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:27:18 AM EST

It's the humidity

I won't quit (1.40 / 5) (#46)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:33:16 AM EST

till I'm a star, On Broadway

I wanna (1.40 / 5) (#47)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:35:15 AM EST

rock and roll all night, and party every day

It was COD (1.40 / 5) (#48)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:42:22 AM EST

but they can't find it. crap

You ga give me (1.40 / 5) (#49)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:45:28 AM EST

the sweetest taboo

It's 85 degrees (1.40 / 5) (#50)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:50:08 AM EST

with a high expected of near 95 today.

Pizza (1.40 / 5) (#51)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:51:53 AM EST

it's what's for lunch

Pizza (1.40 / 5) (#52)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:55:40 AM EST

It's what's for mid morning snack

Pizza (1.40 / 5) (#53)
by Frank J Rizzo on Thu Aug 09, 2001 at 10:59:48 AM EST

It's what's for late afternoon snack. It's also the other white meat

Take me to the river (1.40 / 5) (#54)
by Frank J Rizzo on Thu Aug 09, 2001 at 11:02:02 AM EST

drop me in the water

Pizza (1.40 / 5) (#55)
by Frank J Rizzo on Thu Aug 09, 2001 at 11:16:43 AM EST

Lucky for you there's BP connect

Almost there (1.40 / 5) (#56)
by Frank J Rizzo on Thu Aug 09, 2001 at 11:21:04 AM EST

ha ha ha

Content is not king | 57 comments (57 topical, 0 editorial, 0 hidden)
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