If you're a Web 2.0 devotee, your world is about to change.
According to Internet World Stats, as of March 31, 2009, there were approximately 1,596,270,108 people using the Internet, or 23.8 percent of the world's population. And with the explosive social networking component of the Internet just getting underway, future projections seem unfathomable.
Most of these users have enjoyed free content, making the Internet their indispensible tool for information, business, entertainment, news, analysis, and socializing.
We're hooked, hooked big time.
Companies that fuel this insatiable thirst for online content, including purveyors of entertainment (movies, music, videos, and television), share some common features:
They are firmly tied to our economy.
They are firmly entrenched in our social lives.
They take up a good percentage of our entertainment and recreational time.
As of now, for the most part, their services are free.
But the party train is coming to a screeching halt.
This is hardly news. As the financial crisis enters its second year and industry after industry topples, one can only assume the world will not be quite the same. International order will be rearranged, the economic rankings will be reshuffled, and business will no longer be done in the same haphazard manner.
Meanwhile, the Internet tears through the evolutionary process, gobbling up tremendous amounts of time, space, and terabytes. Clearly, online content providers cannot continue to take massive losses in perpetuity. Under present business models, they're losing millions of dollars annually. The whole game is in the midst of a major overhaul -- and it's going to be pay to play. No longer can brand-name Websites provide free content, support, and security for the sake of visitor numbers. With advertising suffering its worst slump in decades, revenues just don't support all the work and costs associated with multimillion-member sites.
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Reduced ad revenue isn't the only sign of strain. As made apparent in David Silversmith's latest blog, financial liabilities connected with bandwidth, content acquisitions, revenue sharing, data center costs, and administrative costs show the free lunch is over.
Further, providers of online entertainment have waged a raging battle for years over copyright infringement, illegal file-sharing, and blatant piracy. The losses bandied about annually are in the $20 billion range. Of course, digital piracy will continue as long as the hackers stay in front of the good guys, but those costs will be passed on to the consumer. Content providers have little choice but to put up pay walls to support their industries.
Taking another tack, Time Warner Cable is introducing consumption-based billing. The pricing model appears to target customers who download more than 40 Gbytes per month. If the rollout is met with little resistance, others will follow. In a similar vein, the AP's threatening stance on Internet portals and aggregators posting content without paying licensing fees forebodes sweeping changes.
The economy has forced the Internet's hand to act as a serious business, with all the responsibilities that go with success. For us as end users, it will take some getting used to, buying the milk when the cow was once free. But in these troubled times, we have little choice but to accept the inevitable. As President Obama's chief of staff is credited with saying, "Never let a serious crisis go to waste."
Apparently, Internet content providers are heeding a similar message.
— Chris Poley has been a professional trader for more than 20 years.
Thanks for taking the time to follow the threads comradity.
Personally, I have a problem with the behavioral technology. I became quite familiar with it back in 2000, when I would trade millions of shares of doubleclick. I find it intrusive yet pretty much gave into the concept that the Internet was getting their pond of flesh from one way or another.
In discussing paying for content, we've all had a pretty good ride of the backs of many creators of content. I believe in paying for premium content of my choosing. That said, I would much prefer a micropaayment system, equivalent to the "pulling off a band-aide approach", quick and painful.
I too am a fan of Jeff Bezos, despite that (infectious laugh). I think the technology and convenience of the Kindle is wonderful. It can provide so many opportunities, for people in remote locations to access to their library.
In the end, your right, everyone will come out ahead, when pay content becomes viable. Like a good book, magizine, newspaper, movie or music, if it's worth paying for....it's worth paying for.
Wow. I've spent a lot of time reading the entire thread of posts. The overall story is most interesting. I hear two frustrations. One is how slowly internet advertising is garnering a premium for more targeted messaging. The other is charging for content.
How do you feel about behavioral technology that surreptitiously follows you around the internet and pushes messages? I prefer to be targeted contextually based on what I voluntarily share about myself either when I register or participate. I do this when media uses a process for communicating that results in better quality, in terms of both content and audience participation.And I am happy to pay both for better quality content and organically developed content, especially because I am reassured that within a paying membership community, I need not tolerate free-loaders who seek to hi-jack the conversation.
Which brings me to the issue of paying for content.Doesn’t it all boil down to how creators of content/programming get paid? We all agree, I think, that the creators of content/programming should get paid. To be paid, they must retain ownership of their property. I believe that even UCG content ownership should be protected. What if Flickr publishes a coffee table book of the best of Flickr images and a publisher pays them a lot for the exclusive right to publish this book and you have to buy the book with your own pictures in it?
Bezos, who I admire greatly because he is one of few to create a new brand in the last 20 years, is again blazing the trail for the future business model.Have you tried Kindle? There's not much attention paid in the mainstream press to a detail that is revolutionary. To connect to buy a book, you just hit "buy a book." The kindle connects magically to the internet without you payng yet another connection fee. I assume he is reversing the system by sharing revenue from the book with Sprint, the publisher, and the creator, through the publisher.
I believe when the content/programming is what we are paying for, everyone will win. Our demand (what we are willing to pay) will determine how much more a great creative mind will be paid for quality work than a novelty artist gets for fun entertainment, and the distribution links in the value chain will get as much or more than they get now.
When the media industry is focused on selling its content/programming and gets good at it, it will also be a lot smarter, better at selling products on others’ behalf.Then they can charge a premium for performance based communications.With multiple revenue streams the price consumers pay will not need to skyrocket as consumption increases.
I'm hoping what content gets delivered in any media outlet is ultimately decided by the viewer or reader. Numbers derived through typical marketing mertics, surveys, Neilsen Media Research, Nielson BuzzzMetrics, Charter Communications, subscriberships, eyeball traffic ets...you get my drift.
You brought up Disney in your previous post so it seems consistent to look at distributors of content in any medium. My point was -- and is -- that you can't concentrate only on how the content is distributed if you are searching for a model for a financial discussion. In other words, who pays for what is delivered and how are the choices made on what gets delivered. Whether from a ISP, television cable or a printing press isn't the issue.
Or, shouldn't be. Otherwise you have no models for a new medium which is what the internet remains, NEW.
HawiiaBill, It's certainly not that I didn't read your thread carefully. I was addressing your question:
Why do we pay for web connections to services that don't, in return, fund those who provide the content provided? We pay even more for cable television. Does any of that money go for content?
The point I was trying to illustrate, in answering, why we pay for web connections, that don't provide the content provided, IN MY VIEW, in discussing Internet, not magizines, not catalogs, but specifically your question.
I'm trying to say, on the whole, there are ISPs providing installation service, ditributing bandwidth, speed capacity to the home as a business, Cablevision, Tmie Warner Cable, Comcast, AT&T, Verizon, Dish, EchoStar etc.
On ther other hand there are content providers, newspapers, movie studios, record labels, Internet magizines, etc. That is their core business, they, for the most part, don't provide ISP service. (or am I mistaken?)
I treat these businesses, although very much intertwined, as seperate industries.
From my standpoint, that addressed your question, not womens dresses in a Sears catalog.
I prefer my content to free, in the sense, that I don't want the carrier of my signal to also provide me with their content, they produce and distribute, to their end.
Look into what G.E. is doing with CNBC,MSNBC and NBC, they have been accused of pushing pro Obama stimulus, becuase G.E. is in a position to get huge contracts($billions) from the government.
Jeff Immelt head of NBC, not only read Rick Santelli, (who was credited with the movement of the Tax Tea Party) the riot act, but also sent him to classes to be "reoriented" with G.E policy.
As a side bar Bill, I take my blogs very seriously, and try to provide the most honest and forthright information possible. I especially try to address any and all threads with care and research. Yes, I have a very strong opinion, many times it might interfere with being as objective as possible. If I did that to you, please accept my sincerest apology.
Your link to the Slate site is clearly among the most valuable items in this discussion. It's always refreshing to finally find some actual research about the topic at hand. Too rare, even on ie.
It would have been good to have some figures on the porn memberships and traffic but that might not be available.
Perhaps you should read my post again. Then have a broader look around you because the world is full of enterprises that "distribute" materials for a fee. They call that 'wholesale' in the more prosaic products or -- for a quick example -- 'magazine publishing' for something similar to what cable provides.
Never mind catalogs. That would be way too close to cable fare because much of it useless no matter what the reader of viewer is actually looking for. You likely don't care about women's dresses in the Sears catalog, for example, and flip to the tools section.
On television, I'm immediately looking at one of the C-SPAN channels which, incidentally, are paid for by the cable operators nationally. They also subsidize five or six or so "public access" channels that are supposed to provide video of local interest. For free! And isn't that on point for this discussion?
Many areas of the country have Time-Warner and RoadRunner. They bring me television and the internet and my land-line telephone in one billing. While their cable system subsidizes content both nationally and locally I can't find any similar service on RoadRunner or the PUC regulated DSL offered by the regular land-line phone service.
HawaiiBill, In attempting to answer your almost esoteric question, I can only assume, companies that focus on their core competence in the fields of both technology and entertainment shouldn't drift into other diciplines.
Disney, may be one of the few success stories. They provide both content and distribution operations. The Media Networks segment consists of broadcast network (ABC) tevelvion production and distribution operations, cable network, (ESPN,Disney Channel....), Not to mention , studio's, theme parks, cruise lines etc...
I think as a rule you would not want your content provider owning the content the provide. That business model did not work well in Russia, China, or any other communist country.
Amy, as a subscriber, you probably know that you can receive The New Yorker online. It's free to subscribers and they are working bugs out of the software. I prefer it to the printed copy.
Same with Scientific American. Same with The New York Times.
The best quality about on-line subscriptions is rarely mentioned in discussions but is -- to me -- all-important. It's archived! You can stack up magazines and newspapers to a point of no return but you can't find that article about Something-or-Other that appeared "a little bit ago." On-line, that's a piece of cake.
Sad to say for the future of our nation, it might not be valuable to very many of our present Here-and-Now population.
This nation that no longer teaches civics is rapidly running out of history, too. Like it or not, it is the fundamental cause for the serious decline of America and -- try as he might -- President Obama may not be in time to save us from ourselves.
That's especially true when you live out here in the middle of the ocean where, for the most part, nobody knows anything. There is virtually no planning for the future in Hawai`i. Though we could grow all the food we need and much more, agriculture is waning for lack of support. Rather than plant seed, we throw our money into the ocean and wait for ships to bring us food.
The primary question I have is: Why do we pay for web connections to services that don't, in return, fund those who provide the content provided? We pay even more for cable television. Does any of that money go for content?
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