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Can there be a free Web if no one makes money?
40hz:
why is advertising suddenly not a viable model for sustainable web businesses
-JavaJones (December 04, 2009, 03:04 PM)
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Primarily because it's too easy to evade advertisements either by blocking the ad content - or going to an alternative site that doesn't have ads.
Advertisers want guarantees that their copy will be seen. That's why network ratings and circulation figures are so critical to the people who want to sell add space or time slots. Ad rates are based on the number of eyeballs the ads will likely be seen by. And since you can no longer provide audited viewer statistics or circulation numbers, the advertisers have all become less willing to accept quoted ad rates without question as they once did.
Back when there were three networks to choose from, an no effective blocking technology, TV viewers basically had to choose between watching entertainment (with ads) or not watching at all.
With the advent of cable, and later the web, all that changed.
zridling:
That's true, cable brought us HBO back in the 70s. I pay $5.99/month for DishNetwork's NFL RedZone channel, which is only broadcast Sunday afternoon for seven hours, showing every play (and lots more, such as after game coaches/player interviews, extended series of key games, etc.) within the 20-yard line and every score of the day as it happens. With NO COMMERCIALS, it's absolute heaven. Imagine the world free from ads!
But if everything is going digital, going onto the Net, where is the money for advertising going to come from?
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During the first Hackers' Conference in 1984, Stewart Brand uttered the infamous maxim, Information wants to be free. But he meant freedom, not necessarily price.
Entities like Rupert Murdoch's newspapers and TV stations don't "own" the news they cover. RARELY do they write anything original, unless you consider a columnist such. Thus, whatever Rupert's selling, so are many others, but then I can also obtain "it" (the story, the news, the info) for free from other sources (such as daily company press releases). News is not treated as property such as a physical music CD, a book, or a film. Apple's solution is to control access and destination points, which as we all know is expensive.
* Musicians will have to go on tour.
* Newspapers will have to go digital by selling a futuristic digital reader activated by your fingerprint, and then uploading fresh content to it 24/7.
* Novelists are making the transition to ebooks and actually getting paid more per book than paper copies.
* Actors will have to work for $50,000 rather than $25mn per picture; oh, the horror!
I could go on, but the 21st century is a digitized one. Guys like Murdoch and Mandelson (look up "ACTA") prefer the analog economy of the 20th century, where business titans can control supply and artificially leverage their profits at the expense of the consumer. (Bought any computer memory in the past 20 years?!) In a digital economy, some people will have to go back to work and not live off of copyright lawsuits.
JavaJones:
zridling, I think you've hit on a key point: control. It's not just about profits, it's about control, and of course the profits that such control allows. But the key is the control. Even if you were to show newspapers, or other big media, a way to make as much or more money from their products than ever before, they wouldn't be likely to accept it unless they could exercise the same amount of control they've always had. And I grant that, from a business perspective, a revenue source without control is less attractive than one with control, even given the same amount of revenue. The problem is their control is now illusory and that's exactly why they're losing market, profit, and relevancy. The revolutionary changes that digital anything makes to the world are pretty well uncontrollable by any one entity, at least not for long. So they'll need to find a way to work *with* it not against it. So far organizations that are doing that well seem to be succeeding...
As for ad pricing, etc. being different from newspapers, TV, etc yes that's true. But TV has widespread ad blocking now too with TiVo, etc. And the ad model on the Internet is based on a young market. It may mature into something similar to what newspapers had. In fact some of the most successful sites are not the "throw any PPC ad up there" type, rather they are like newspapers in that they select the ads that go up, and position them semi-carefully within their content. Look at www.penny-arcade.com for a prime example of an effective new model for online advertising. For example the PA guys frequently draw art and write copy for the ads on their site, making them more interesting to their visitors. And hey, isn't advertising online more trackable than print or TV ever *really* were? The viewership/readership stats of newspapers and TV were illusory, mere extrapolations at best, but advertisers bought into it because they had no other choice. Now they have choice, the value per-ad is diminished, but the ability to serve relevant and contextual ads and a lot more variety of ads is improved. So I think things will stabilize over time. The best thing people like Murdoch could do is work towards a more stable online advertising market I think.
The bottom line is I think the flagging success of major media can be demonstrably tied to their lack of embrace of changing times. This is all the more compelling because it's happened many, many times before, and it's always virtually the same story. Life goes on, the big titans of the day die off, and new titans replace them. Maybe Google is one of those titans, who knows. But unless Murdoch and company change their approach, they won't be, that's for sure.
Above all it's important to remember it is not some new and uniquely pernicious thing, this interwebs and its series of tubes. Technology has always challenged the status-quo, and upset the establishment. That's a good thing. Without it we would still be listening to live piano players in movie houses with silent movies, there would be no record sales because recording music is the devil's work, and etc, etc.
P.S. Can you imagine how the lamp lighting industry suffered when electric lights came along? Youch! :D
- Oshyan
40hz:
During the first Hackers' Conference in 1984, Stewart Brand uttered the infamous maxim, Information wants to be free. But he meant freedom, not necessarily price.
-zridling (December 04, 2009, 05:04 PM)
--- End quote ---
He later added a second comment to his original:
"Information wants to be free. Information also wants to be expensive."
And there, in a nutshell, is the paradox lurking behind the problem.
And as Stu Brand also noted: "That tension will not go away."
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In a digital economy, some people will have to go back to work and not live off of copyright lawsuits.
-zridling (December 04, 2009, 05:04 PM)
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Have to be careful about going to far with that argument.
While what you're saying might be true in some cases, in many more cases the following will be even more true:
In a digital economy, no one will receive any compensation for digitized copies (i.e. audio, video, image) of their original creative works since copyright law has been rendered unenforceable by new technologies for the digital duplication and transmission of such works.
The other thing we need to be careful about is allowing people to hide behind the anti-DRM flag in order to mask what they're actually doing.
DRM gets bandied about as the big reason for bucking the recording industry. But I think what's going on for most people has very little to do with DRM or the recording industry.
What I think is really going on is fundamental shift in public perception. Basically, the general public is reaching a point where it no longer views recorded anything as property.
Simple truth of the matter is a huge number of people are basically saying they're no longer willing to pay for musical recordings. Period. That's not to say that they no longer want those recordings. It's just that they don't see the need to pay for them - and furthermore - they won't pay for them. Period.
And that is going to hurt everyone in the long run.
JavaJones:
Here's an interesting, topical article by a former Salon.com Managing Editor about his experience with putting up, then taking down "paywalls": http://www.guardian.co.uk/media/2009/dec/03/memories-paywall-pioneer (by way of Slashdot)
- Oshyan
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