Back in the '80s I had an account at NCSU with Internet access. The Web didn't exist yet, you used Gopher and searched via Veronica. There certainly wasn't any advertising and the only thing I remember being Internet accessible and pay-per-use was Lexis/Nexus, which is still pay-per-use today - and doing fine, as far as I know.
The funny thing is, I haven't noticed a substantial increase in content quality since then. Today k5 and /. have some cool discussions. Back then, Usenet was spam-free and had volumes of high quality, well-written posts. Usenet in the 80s was actually better than /. and k5 today. You didn't have to compose your messages in a crappy little Web form. Your newsreader was vastly more powerful and capable than Slash or Scoop. Killfiles took the place of moderation, and were actually more functional because you could tailor your killfile to your own preferences. And though I don't know exactly why, it just seemed that the base quality of content was much higher quality than it is today.
Back then, nobody had the remotest concept that you could make money selling "content," even if you had a lot of it. Hell, even porn was free. However, in the late '90s many businesses were founded on the crazy and unproven--in fact, disproven--idea that if you put up a Web page with high-dollar content, somehow money trucks would beat a path to your door. Why? I don't know.
The problem isn't structural, it isn't the payment system, it isn't that "we've permitted users the expectation of free content," it isn't that reading an article on Salon without clicking on ads is somehow socially irresponsible (a thorougly bizarre notion if I may say so). It's simple economics. Let me elaborate.
Every business faces a demand curve and a supply curve. Both of these hit content producers pretty hard. The supply curve is how many units they are willing to produce at any given price. In the case of a Web site this is pretty simple: The marginal cost of supplying one more "hit" is so small as to be negligible, therefore producers are willing to supply the entire appetite of the market, whatever price they can get. What this means is that if any firm exists and is charging any given price, any other firm which believes its product to be equivalent is well advised to charge slightly less money; they will then capture the entire market. The race to the bottom ends when price equals marginal cost, which in this case is zero. Or in other words, no matter how good you think your content is, if someone else is giving away essentially the same thing, you can't charge for it.
The demand curve is how many units consumers are willing to purchase, at any given price. Obviously if a product is available for free, somewhere between few and none will buy it - but we already covered that problem. Consider the demand curve for the content industry as a whole, not for any single firm. If all content is free, people consume a lot of content - whenever you have some spare time, fire up a browser and read some damn thing, even if it isn't very interesting. Why not? However, the moment any amount of money is involved, consumers must make a value judgement; most of the time, the result of that will be "hey - I'm just bored, I'm not really interested in this, maybe I'll go walk the dog." So the curve between $0.00 and $0.01 falls off incredibly quickly. At least half the people who would click on something for free will not click on it if it costs even a penny. (I have no research to back this up - I'm just making an assertion based on my own perceptions. I'd welcome anyone to dispute it.) Presumably as the prices go up the demand falls off prety quickly.
So the question is, what's the total amount of money the _entire_ WWW could _possibly_ expect to earn through pay-for-content? I'll bet if you crunched the numbers you would get a remarkably low figure. Certainly far less than is being spent today by the content companies. And of course, having calculated the total value of Web content if the buying public were to pay for it directly (and assuming your calculations are correct), adding a layer of indirection (advertising) can't possibly increase the total value of the system.
So, quite frankly, _any_ pure content play is doomed, as a business. But that doesn't mean the Internet will cease to have valuable content. Businesses aren't structured to spend their time just talking to people; at the end of the day they have to sell a product. So without the content firms, we'll just go back to having people talking to people--which is really quite a lot more interesting anyway.
No big deal, unless you work for one of them.
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