When the Internet was first created, there was the notion that some sort of payment scheme such as micropayments might be forthcoming, allowing content producers on the net to easily get paid for the content they produce. That didn't happen. Portal providers such as AOL seemd to quickly learn that their users really didn't care that the content of the Internet wasn't provided by those companies. Users of the net were willing to pay the AOLs of the world for access to the net, and they came to expect most things beyond that access point to be free.
Here's an idea to help the economy...
What if we went back to
buying and selling
things we value?
... instead of giving things away free
and then expecting things free.
I mention this because today I saw Jen Swanson's blog noting that the Seattle Post-Intelligencer is up for sale. Nothing new in the grander sense of things. A lot of newspapers are going through this. But it still made me wonder, since the cited reason was problems with advertising.
The problem is that with the Internet, we give things away. It's a nice thing, I guess. A lot of people like it. Who wouldn't like getting things for free? But an extraordinary amount of value is available free because it is simply volunteered to others.
Open Salon is offered to us for free as a site, for example, and we offer articles back for free. Well, that's all nice. But one has to ask: Where is the money? Will people be offering food and housing for free? Of course not.
It used to be that people paid for things. And it would be nice to think we'd outgrown money. But we haven't. Rather, by volunteering things free, we're undercutting the ability of others to charge money. We're creating the sense in people that they are entitled to have stuff for free, and making it hard on people who want to charge money, as if they were villains for thinking of that.
And yet we have an economy that is ailing because people don't have ways to make money. What's wrong with that picture? If you're providing value, shouldn't someone be paying you? That's how it used to work. Money has somehow gotten a bad name, and yet all money is supposed to be is a way of keeping track of who's contributing and who's not in our society. Without money, there are people who contribute but aren't treated as contributors. That doesn't seem fair. Also, if we paid people for things, they'd have money to buy things, and they wouldn't mind it as much when they paid.
This affects international trade as well. When the Internet went online, a lot of knowledge was held by the richer countries, particularly the US. The easy availability of the net has helped to raise the level of knowledge and capability for countries the world over. And yet there's no accounting for the value that was offered and taken. It was offered out of a spirit of generosity. Will equivalent value return to us? There's no way to do the accounting in order to be sure. But I suspect not. I'd like to believe that doing a good deed for another results in them doing good deeds for you. But there are many places in the world, and especially the business world, where doing a good deed for someone else means you're a patsy who deserves to be separated from whatever value you may have had.
The problem is that it's hard to decide to do this as an individual action. I can't just say “I'm not writing articles unless you pay me.” because there are so many people who will just offer stuff for free, it won't have any effect (other than to leave me out of the writing world). It's not obvious how to fix that.
In some of the Star Trek episodes, there is a race of aliens called the Ferengi that practice an economics called the “Rules of Acquisition” in which it is profitability is required in all transactions and people get in trouble if they do things for free. I suppose it would be extreme for me to suggest that, and yet in a world without jobs, there's a weird kind of appeal in the thought of it.
I don't have a good answer, actually. But I think it's a worthy question to spend a few minutes contemplating.
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Comments
Perhaps our economy would be better served by a sharp delineation between volunteerism and capitalism.
BTW, I quite liked your Ferengi reference--although the Ferengi were only a poorly sketched point of fun in the Next Generation, they were fleshed out well in Deep Space Nine (my favorite of The Treks due to its breadth, depth, and engrossing story arcs).
O'Kathryn, yeah, they're much better explained in DS9. The Next Generation sort of rescued them from a pathetic first few episodes and then tried to retrofit the new description over the original few shows in which they appeared.
What does it mean to give things away? For example, if I read the news on the CNN web site and am thus exposed to their on-line advertising, CNN makes money by selling my viewing of the ad, or however one would put it, and the advertisers make money presumably because people buy the products and services thus advertised.
"Open Salon is offered to us for free as a site . . . "
Just yesterday I had a conversation about that with a friend who is also an OS member. We both agreed that we would be more than willing to pay a monthly membership fee -- BUT we would expect other things in return. Like customer service, for example. And some better features.
You are no doubt familiar with the Pandora service. They have an interesting model in which anyone can have a free account with ads on the sidebar, or you can pay $30 per year to go without the ads. I suspect they also sell data on who listens to what music and for how long.
" . . . and we offer articles back for free."
Well, I don't know about that. For example, let's say that you and other interesting people hang out in a coffee shop, in order to discuss issues and exchange ideas. And people like me kind of hang out on the edges and listen to the interesting conversations and make the occasional comment. In a sense those conversations are "free," but it's not the kind of thing that someone would typically charge for anyway, unless you're someone such as Bill Maher who can make money having such conversations on TV.
Currently the on-line "coffee shop" is free, but as I mentioned I'd be happy to pay for it, and I assume others would too.
So the real problem with newspapers is that things like craigslist.com and monster.com, essentially ripped out the revenue base that they've used for a century. And there's really no fix to that business model. The subscription price you pay to get the newspaper, and the advertising dollars that companies pay for the graphic ads, don't come close to supporting the cost of reporters and editors and all the "content" that you think a newspaper is about.
Classified ads have been the invisible real business, subsidizing the content that most people think of as newspapers. And, alas for the business, classifieds work much better online.
In the long run, human socioeconomic structures as we know them are pretty much by definition unsustainable. They encourage endless consumption of, and appetite for, finite resources. A consumerist economy is the perfect engine for mining, manufacturing, and polluting ourselves onto the Endangered Species list.
We're stuck in a mental habit of assigning value to things rather than to efforts and services and problem-solving ideas.
I dunno the answer either, but when I step back and look at the global economic system, I'm convinced that if Satan were real, he would have been the one to design it, to ensure that we kill ourselves off--quicktime.
In my industry (film & TV production/distribution), we’ve only begun exploring all the avenues available for ‘monetizing’ the new distribution outlets that internet and digital platforms offer. That’s one of the reasons our guild agreements (and the strikes/possible strikes you may have heard about in the news) are so intractable – it’s still the Wild West out there; every month a new platform is being offered up by brand new vendors – each one with a new and unique ‘media’ type. The studios are experimenting with all of them. But no industry, including mine, would willingly slaughter its traditional lines of business while this transformation occurs. Though, for better or worse, the transformation will occur, and unless we (the greater world-society) leave our consumerist ideas behind, I have no doubt we’ll eventually have very definite compensation for just about everything of value traded digitally.
Interesting post, Kent. Thank you.
A few blogging sites -- LiveJournal comes to mind -- have offered tiered payment plans -- if you pay a fee per month or year, then no ads run on your blog, whereas if you choose the free option, ads appear.
I still think that the model exists for creating and supporting good written work online. Good work should attract higher numbers of visitors, and that traffic should result in more income from ads, all of that -- it's just that online advertising is still valued much lower than print ads, for reasons I don't understand. Until ad rates go up, I think we're stuck in the low- or no-pay for online work problem.
It's not that there isn't better and worse quality at different sites, it's that readers aren't that discerning in many cases. They'd often rather have several sites of free drek than one site of really good stuff... or maybe their metric of what's good is what many of us are griping about happening to the OS cover now... extra coverage of Big Love and not enough coverage of politics.
It's not that I don't think the world has more market for People magazine than hard news, it's that they've bothered to assemble a bunch of political writers here and I wish they'd make use of the fact rather than now say "oh, that's not what we wanted. go elsewhere."
In terms of this thread's discussion, I wish they'd figure out a pricing model that would (a) perhaps even help out the bloggers here that are attracting an audience and (b) charge people who are thirsty for that content. I think it's coincidentally true that the people who want politics also would probably pay for it because it's a scarce commodity, while the people who want Big Love probably won't pay for it, because you can get that kind of thing anywhere. But OS is treating it as the same thing and trying to conflate the two things as if they should have the same business model.
What Don said about classifieds is probably true for as far as it goes. It doesn't mean that the replacement model has to have only a single mode.
The economic problem with micropayments directly, appears to have been the mental effort required to decide whether to buy the content. People feel "nickel and dimed to death", when clicking on every link costs you a penny. Part of it is having trouble keeping a running total, knowing how much you're spending over months and years. Part of it is just the simple mental energy of trying to decide whether to pay more for more content. Often it just seems like too much bother, even for tiny fees. And there's also the judgment question: you're read a first paragraph of an essay (as a teaser), and you have to pay a penny to read the whole thing; will it be "worth it", or will you be disappointed?
I think this activation barrier of mental energy is what doomed the original micropayments. And there isn't a direct solution to that.
But still ... readers are getting value, and would (in principle) be willing to pay for better content. Maybe one approach is some kind of taxation and then government funding.
Probably the best answer is something more like music payments for radio airplay. You let everybody post content and read "for free", but then there is sampling about popularity of individual creations. And some kind of fund -- perhaps from license fees to just be online on the internet in the first place -- which gets divided up amongst the content creators according to observed popularity.
Does that idea seem feasible?
No one cares anymore, or at least very few do...
enjoy writing? it's a nice hobby, i like it myself. i think you have to write half of a very interesting sentence, and then insert a note about your paypal account. good luck.
but are you sure you know something of value?
This is a really interesting and plausible hypothesis, Don; thanks for mentioning it, because it's never occurred to me (though it should have, I think).