> For the Internet to thrive, content providers must be paid for their work. The long-term prospects are good, but I expect a lot of disappointment in the short-term as content companies struggle to make money through advertising or subscriptions. It isn't working yet, and it may not for some time.
And it's only one of multiple myths in this piece. Creators don't need to be paid for their work, but to live. This is a crucial difference.
They may be additionally compensated for having created something (or contributing to the creation of something in a collective effort), but it's that stretch between conception and emergence that is most critical, and for which the market, as it stands, has no answer. And cannot have an answer.
Not quite. UBI is millions of people subsidizing everyone.
This is more like 300 fanatical content consumers deciding to give a certain person $5 a month so that they spend as much time as possible producing content.
Present global ad spend is on the order of $600 billion, distributed very roughly across the 1 billion wealthiest inhabitants of the world, or approximately the inhabitants of wealthy industrial nations. This works out to roughly $100 per person per year, or about $8.33/mo.
Allocating this as a tax would more than replace all present spending on authors, screenwriters, journalists, and musicians.
I think we do - advertising is still a perfectly legitimate way to pay for 'free' content., plus subscriptions where they make sense.
The current problem isn't that we can't or won't pay, or we can't or won't accept advertising. It's that each generation of adtech becomes more and more user-hostile until we're forced to fight back.
So the popup became the pop-under, and devolved into popup bombs until browsers were forced to act. Tracking has gone from associating an ad-view with its context, to growing that context across their entire ad network until they've profiled exactly what demographics and markets you fit into, and browsers are starting to fight back.
It's not that we won't accept advertising. It's that advertising is in a constant race to the bottom. And I think - I hope - we're about hitting the bottom of the current generation of adtech.
Hamilton Holt's excellent 1909 lecture, "Commercialism and Journalism", available from the Internet Archive, addresses most of the modern complaints against advertising, at a time when it was just beginning to massively re-shape (and, to be fair, enable) the modern media landscape.
The Government should guarantee the creation informative news, or what people usually call "hot news" (a tsunami, who's new president, a new law that changed, anything that is essential to keep the community informed).
It already happens in Portugal for eg. LUSA News Agency is a funded by the Government in order to guarantee exactly what I just described. LUSA is not perfect but it's role should be treated as a public good.
There's a surprising history here of which most people are almost wholly ignorant. Robert W. McChesney is among the few scholars who've explored this in depth in the US, see for example:
"The Debate Over Public Policy and the Emergence of Commercial Broadcasting in the United States, 1927-1935"
When the BBC was formed in the UK, the concept of allowing media ownership to be in the hands of private corporations was considered unthinkable.
Government funding has its own set of considerations, though in balance it seems generally preferable, most especially if funding and control are separated.
Most people won't pay for a subscription and most times the content is too sparse to organize as one despite providing some value (e.g. niche blogs).
I've 2 niche blogs and tried several ways of monetisation along the years. I only kept a direct ad (that adblocks can't detect) and amazon affiliates. I ditched Adsense (from 50€ it dropped to 1€/month) and tried donations (patreon, buymeacoffee, paypal) but it's not the right niche for that (art students).
Subscription only makes sense when the content is concentrated in 1-2 paid-for aggregators -- or if there's a single convenient way to pay for everything.
Not sure why we haven't added some such one-click "pay $0.2 for this article/video/etc" option to our web browsers. That was the whole promise of micropayments back in the day.
Subscription decouples the reward for quality from the consumer.
A good system would create payment by time && Lines Read minus some Rewared for Content produced as Result by the User (Not emotional Engagment drivel in some comment, but actually contributing to a discussion).
Good Content would be peer reviewed by its readers, like it happens here on HN, and those reviews would in return garant those contributing some discount or even reward.
We are so far away from that like earth from mars.
Wouldn't it be the other way around? The subscription explicitly ties the reward to the quality.
Imagine this: (1) The publisher starts writing quality content in order to gather as much subscribers as possible. (2) Th publisher gets a comfortable amount of subscribers. So it starts to wind down the content quality, thus reducing his costs. (3) Now the users aren't getting the quality they are paying for. (4) Maybe slowly, but surely the subscribers will cancel their subscriptions and ultimately lose their trust in the publication itself. (5) The world is balanced once again.
Now this last point is important, the relationship between the producer and the consumer is based on trust.
The marketplace of ideas idealism is interesting. It seems to crop up every now and then as the aspirational model for how ideas should propagate especially with technological mediation. But I'm not sure how valid it is, given that the reasoning is by definition circular (that the best idea is the most popular and the most popular idea is the best).
But either way, maybe the world would be better if content wasn't free, if it wasn't trivial and inexpensive to artificially inflate access to attention. As it stands our "marketplace of ideas" is at best a market for lemons.
When did we go from the shiny, utopian visions to this advert-overloaded cyberpunk future of attention hackers [1] and panoptic sousveillance?
> A major reason paying for content doesn't work very well yet is that it's not practical to charge small amounts. The cost and hassle of electronic transactions makes it impractical to charge less than a fairly high subscription rate.
> But within a year the mechanisms will be in place that allow content providers to charge just a cent or a few cents for information. If you decide to visit a page that costs a nickel, you won't be writing a check or getting a bill in the mail for a nickel. You'll just click on what you want, knowing you'll be charged a nickel on an aggregated basis.
> This technology will liberate publishers to charge small amounts of money, in the hope of attracting wide audiences.
> Those who succeed will propel the Internet forward as a marketplace of ideas, experiences, and products-a marketplace of content.
PayPal and credit card companies made paying online easier than the various micro-payment companies could, but weren't interested in the same business model.
There's still the model of sending content via MMS to smart phones (or even dumb phones) with carrier billing. Yes the one that has been used for selling custom ringtones in the 1990s. With Android's stagefreight bug a couple years ago Google managed to put it out of consideration such that people must go to app stores instead. But carrier billing has always been the obvious native payment method on the mobile web where telcos already have your details and a customer relationship.
I think search engines and social media happened. Basically, unless your work is distributed for free, your audience won't find it, since Google doesn't rank content well if it's got a mandatory paywall and people won't share stuff on social media if there's a good chance most others won't be able to read/consume it.
It's also possibly because the internet and content is in the midst of an endless race to the bottom. People are giving away their work for free, so people have come to expect that as the norm and are less incentivised to pay for anything further down the line (because if they do, their free competitors will eat their lunch). It's a lot like what's happening in the smartphone app market, where due to all the ad supported/free/99 cent apps available, anyone trying to sell an app for more than a few dollars is going to lose most of their audience.
"But to be successful online, a magazine can't just take what it has in print and move it to the electronic realm. There isn't enough depth or interactivity in print content to overcome the drawbacks of the online medium.
If people are to be expected to put up with turning on a computer to read a screen, they must be rewarded with deep and extremely up-to-date information that they can explore at will. They need to have audio, and possibly video. They need an opportunity for personal involvement that goes far beyond that offered through the letters-to-the-editor pages of print magazines."
Bill clearly didn't consider that the 'drawbacks of the online medium' would be eliminated by everyone having a computer in their pocket. I pay for online-only subscriptions to The Economist and The New York Times, and these apps are essentially just electronic copies of their paper cousins.
Bill also seems to have missed the possibility of not producing content but instead acting as a platform for others to produce content. The network effects of such platforms have led to wildly profitable enterprises such as YouTube, Facebook and Spotify. Given Microsoft's own network effects, it's strange that Bill didn't consider this angle.
Before search engines and open source CMSes were widely adopted, it was reasonable to expect that basic news sites were going to be insanely valuable. The barriers to entry were high but the reward was now exponentially higher with the global reach potential
> A major reason paying for content doesn't work very well yet is that it's not practical to charge small amounts. The cost and hassle of electronic transactions makes it impractical to charge less than a fairly high subscription rate.
> But within a year the mechanisms will be in place that allow content providers to charge just a cent or a few cents for information. If you decide to visit a page that costs a nickel, you won't be writing a check or getting a bill in the mail for a nickel. You'll just click on what you want, knowing you'll be charged a nickel on an aggregated basis.
To think this practice still isn't widespread 22 years later...!
I don't think that cryptocurrencies are the future, but I do think that patronage-based crowdfinance platforms (like Patreon) serve as a guide for where we should be heading, culturally.
They're trustless and borderless, and if something like Lightning Network works out, would be a great tool for microtransactions like the ones mentioned here.
It'd be much easier to get a bunch of sites to use a decentralized currency than have someone's payment service on a "MySQL server", not to mention that cryptocurrencies have a natural equilibrium for payment fees, while such a service would only be looking to squeeze out as much fees as possible from this theoretical new way of paying for content.
Yup I find the odlyzko article much more informative and prescient.
See for example recent article on front page here yesterday(?) about the music industry now making a fraction of its previous money. Or even the old numbers paling in comaprison to Google Facebook Amazon - information, social connection, and buying shit.
The content industry is just not that big, $$-wise, and never has been. Humans are social animals, it wins out.
At any given moment there usually seem to be one or two New York Times articles on the HN front page, which I assume means a reasonable proportion of us are subscribers.
I don't really see what's wrong with the subscription / paywall model, other than it means letting go of "information wants to be free" dogma and admitting Rupert Murdoch was right about something. At this point it seems preferable to the ad-driven business model.
One issue that is not addressed by the subscription model is the subsidizing effect that the ad-based model has:
The finance professional who lives in New York has very valuable page views. The African school girl does not. Yet, through advertising their values are averaged. The affluent subsidize the poor without even knowing it.
Putting content behind a pay-wall reduces this effect and creates an informational disparity that will only broaden the gap of equality between the two.
The New York finance professional just has to decide that the subscription is "worth" paying. The African school girl cannot make this same decision.
For me this is the only positive aspect of our ad-based Internet. It allows people with no money or means to use it - be it a poor African girl, or just me when I was a kid - to access the same information everyone else can. If we could solve that somehow, then killing off Internet advertising would immediately improve the world.
Libraries solve that need, so if there's a way to help fund that type of initiative, especially if it already exists, we should all promote it aggressively.
The more often I see this piece, the more I'm impressed by how poorly it's aged, the errors it contains, and how much ignorance and/or covert attempts at media monopolisation it reveals.
Beginning with the title: though often attributed to Gates, the phrase probably originates with Viacom's Sumner Redstone, a man whose wealth and fortune came not from content by by distribution -- control over content.
Information and markets are a poor match. Market pricing works best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price.
Information goods violate virtually all these assumptions.
* Quality is highly variable.
* Quality assessment is difficult, and often frustrated by other factors.
* Quality isn't, and often cannot, be known in advance.
* Variance of individual instances is high enough that averages rarely suffice.
* Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.
* Variable costs of production (e.g., publication) are low.
* Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", advertising, or weapons research.
David Brin is amongst those who've argued for micropayments. He, along with others, is wrong.
Nick Szabo, Clay Shirky, and Andrew Odlyzko have all argued this point better than I.
Successful media payment systems tend to be:
* Subscription or serial based.
* Bundle based.
* Patronage based.
(That is: they look a hell of a lot like a Viacom cable or Microsoft Office 365 service plan, not a micropayments scheme.)
The idea that content creators should be paid by the piece is another frequently-iterated myth. The purpose of compensation is to enable existence, and the intermittent and happenstance reward of creative activity is notorious for failing at this. Historically, solutions have tended toward patronage, independent wealth, control over a production venue (as with Shakespeare and his New Globe Theatre), or other forms of live performance in which the ticket booth serves as a literal gateway between audience and performer at which a toll may be levied. More recently, the notion of generally-supported creativity through public support, paid in taxes, has come into vogue, as with the UK's BBC and a small fraction of US works.
Adam Smith argued against piecework:
Workmen, on the contrary, when they are liberally paid by the piece, are very apt to overwork themselves, and to ruin their health and constitution in a few years.... We do not reckon our soldiers the most industrious set of people among us. Yet when soldiers have been employed in some particular sorts of work, and liberally paid by the piece, their officers have frequently been obliged to stipulate with the undertaker, that they should not be allowed to earn above a certain sum every day, according to the rate at which they were paid. Till this stipulation was made, mutual emulation and the desire of greater gain frequently prompted them to overwork themselves, and to hurt their health by excessive labour.
The notion that improved network speeds has been soundly refuted by experience. It turns out that William Stanley Jevons was right: reducings costs of a good or service (here, the time cost of information transfer) only serves to increase the consumption (or production) of that good. Or, in this case, bad. Today's webpages rival Gates's 1990s-era operating systems in both data throw-weights and capabilities as malware-distribution and surveillance-enabling systems.
And that was back in 1996..