8 ms·

Right now there is a free rider problem with internet content. If this becomes more prevalent the market will have to adjust to deal with free riders. If you b

by ziszis 11y ago

Right now there is a free rider problem with internet content. If this becomes more prevalent the market will have to adjust to deal with free riders. If you believe that content creators have a right to earn money there are two ways that can happen: 1) directly - you pay directly for the content that you want to consume or 2) indirectly - you see ads or sell your data in some way. I wonder what people will choose if these are the choices. Right now you can ignore paywalls because relatively few sites employ them and they aren't robust.

easytiger 11y ago
If a huge proportion of the internet economy stopped existing, the only real losers would be the big ad firms like google. I think we can all happily live without 99% of youtube's shit
- awesomepantsm 11y ago
  If you blocked 99% of ads though, youtube couldn't exist. It would have to become pay to watch. Don't be stupid.
  - Grishnakh 11y ago
    I've said it before, and I'll say it again, though the last time I said it people thought I was a complete loon and down-modded me to oblivion: If we had real, viable micropayment services, where you could click a mouse button and spend $0.002 to read an in-depth news article or $0.008 to watch a YouTube video (these amounts are probably more than the content owners are getting per-impression from the ad networks), I think ads would mostly die out and these sites would be self-supporting.
    - iofj 11y ago
      Unfortunately there's 2 things that make this more complex and far more expensive. 1) any pricing that did this would have to replace ctr * ad_pricing(keyword, site) * (1 + VAT) + admin_cost(for keeping track of a billion customers) + cost per transaction from banks (2% + 0.25$ is typical) So to replace a 1% CTR 5$ keyword ad (anything relating to financials, insurance or credit cards) we're talking a "micro"payment of at least 0.25 + 0.050.2 1.21 = 0.31 EUR. This is ignoring a number of costs (such as chargebacks). (assuming 21% VAT) And here's how the money gets divided up in such a scenario: Bank: 17 cents Government: 10 cents Site owner: 4 cents Lowering the amount the site owner gets doesn't really reduce the amount the user pays. Anything less than about 30 cents is a non-starter. If you paid the site owner nothing, it would be 28 cents. If we go through ad networks instead, and companies pay for ads through bank transactions, bank gets nothing (aside from the fees on business accounts on both sides, which aren't per-transaction costs), and the government gets 8% (assuming 33% profit margin for the ad network, which is high, and 25% corporate tax). If you "avoid" tax like most ad networks do, the government gets very little, 1-2% at most. 2) Starting this up requires violating a Nash-equilibrium. A huge number of people need to seriously damage their own business in order to make this happen before it can happen. And that's ignoring problems that this would allow governments, banks, courts, ISPs and ... to block content based on controlling the financial system (which is a necessity to combat tax fraud anyway, blocking payments because either courts or governments don't agree with the transaction is something that constantly happens). You could of course try to get the government to drop 90% of their VAT for internet transactions, and banks to stop charging for payments, and ... but good luck with that.
      - Grishnakh 11y ago
        All you're doing is proving my point. The banks and government should not be getting $0.27 cents! That defies the whole definition of the word "micropayment". A micropayment has to be workable at less than $0.01, otherwise it's not a micropayment system. Basically, your whole argument is "it can't be done within the status quo". No shit, sherlock. If it could be done, someone would have done it already. That's why the status quo has to be changed.
throwawayukcyb 11y ago
> If you believe that content creators have a right to earn money there are two ways that can happen: 1) directly - you pay directly for the content that you want to consume or 2) indirectly - you see ads or sell your data in some way. I don't think this is a truism. Sites in the style of BBC/CNN/Fox/Yahoo/etc. may have a tough time with their online content if they aren't able to support those properties with ads. IME most content that's actually worth the time it takes to consume (e.g., well-composed articles and essays written by field experts) is not ad-supported. A lot is behind paywalls, and still more is provided on non-ad-supported websites. For example, distributed freely by fee-supported professional organizations or else by the author him/her-self as a tool for self-promotion/brand building. I don't see any reason why high-quality content can't survive on non-ad revenue, given that there are plenty of counter-examples. And that's just considering the ad-supported sites that are actually content-driven. A lot of online advertisement is not supporting original content creation at all.
- dwild 11y ago
  > For example, distributed freely by fee-supported professional organizations or else by the author him/her-self as a tool for self-promotion/brand building Content made to promote something, isn't that an ads? Sure that could happen but hell nothing stop ads from being more high quality right now. I much prefer to watch content that's primary goal is to entertain, teach, etc... and not to sell you stuff. > I don't see any reason why high-quality content can't survive on non-ad revenue, given that there are plenty of counter-examples. Well nothing stop them to exist right now. The reverse is false though, content funded by ads currently only exist based on that good ad targeting. Personally I seriously hope Google push more Youtube Red and Google Contributor. Ad work for people that can't pay for it (or don't want to), we only need something for people that doesn't want ads but can pay instead.
Omniusaspirer 11y ago
There's only a "free rider problem" if you view the internet as a tool to generate income, as opposed to a tool you can use to offer something to the world. If all ads were gone tomorrow I wouldn't see a single website I regularly use drop off the internet. I'm becoming increasingly convinced that the quality of web content on average would skyrocket if you couldn't make a dime off of ads.
- ziszis 11y ago
  I don't know which sites you use specifically - but i would guess many people on hn use at least one of the following: Google Search, Gmail, Facebook, Chrome/Firefox.
- dwild 11y ago
  How does ads affect this hypothetical world where quality of web content skyrocket? The web isn't a closed platform for a limited number of service. Multiple website are trying to survive without ads, Wikipedia is one of them. Nothing stop them. Ads allow for content creator that still need to pay rent, to actually produce content while still paying rent. You know like any job. The one that still can produce without anything, are still free to do it currently and plenty are actually doing it.
  - CaptSpify 11y ago
    Everyone ends up contributing to the ad-focused world, instead. How many people post on reddit/twitter/facebook, vs their own blog?
- CaptSpify 11y ago
  I plug this post enough I feel like I'm in advertising: "...essentially all of the ad supported sites I visit are diversions" - https://utcc.utoronto.ca/~cks/space/blog/web/AdSupportedWebDeathView https://utcc.utoronto.ca/~cks/space/blog/web/AdSupportedWebD...
  - Omniusaspirer 11y ago
    This blog post is exactly what I'm getting at. The best content comes from people who are passionate about the material, not the potential monetary income. Curiously those same people tend to have no shortage of people willing to step forward with funding to keep them doing their thing.

by ziszis 11y ago

easytiger 11y ago

If a huge proportion of the internet economy stopped existing, the only real losers would be the big ad firms like google. I think we can all happily live without 99% of youtube's shit

awesomepantsm 11y ago
If you blocked 99% of ads though, youtube couldn't exist. It would have to become pay to watch. Don't be stupid.
- Grishnakh 11y ago
  I've said it before, and I'll say it again, though the last time I said it people thought I was a complete loon and down-modded me to oblivion: If we had real, viable micropayment services, where you could click a mouse button and spend $0.002 to read an in-depth news article or $0.008 to watch a YouTube video (these amounts are probably more than the content owners are getting per-impression from the ad networks), I think ads would mostly die out and these sites would be self-supporting.
  - iofj 11y ago
    Unfortunately there's 2 things that make this more complex and far more expensive. 1) any pricing that did this would have to replace ctr * ad_pricing(keyword, site) * (1 + VAT) + admin_cost(for keeping track of a billion customers) + cost per transaction from banks (2% + 0.25$ is typical) So to replace a 1% CTR 5$ keyword ad (anything relating to financials, insurance or credit cards) we're talking a "micro"payment of at least 0.25 + 0.050.2 1.21 = 0.31 EUR. This is ignoring a number of costs (such as chargebacks). (assuming 21% VAT) And here's how the money gets divided up in such a scenario: Bank: 17 cents Government: 10 cents Site owner: 4 cents Lowering the amount the site owner gets doesn't really reduce the amount the user pays. Anything less than about 30 cents is a non-starter. If you paid the site owner nothing, it would be 28 cents. If we go through ad networks instead, and companies pay for ads through bank transactions, bank gets nothing (aside from the fees on business accounts on both sides, which aren't per-transaction costs), and the government gets 8% (assuming 33% profit margin for the ad network, which is high, and 25% corporate tax). If you "avoid" tax like most ad networks do, the government gets very little, 1-2% at most. 2) Starting this up requires violating a Nash-equilibrium. A huge number of people need to seriously damage their own business in order to make this happen before it can happen. And that's ignoring problems that this would allow governments, banks, courts, ISPs and ... to block content based on controlling the financial system (which is a necessity to combat tax fraud anyway, blocking payments because either courts or governments don't agree with the transaction is something that constantly happens). You could of course try to get the government to drop 90% of their VAT for internet transactions, and banks to stop charging for payments, and ... but good luck with that.
    - Grishnakh 11y ago
      All you're doing is proving my point. The banks and government should not be getting $0.27 cents! That defies the whole definition of the word "micropayment". A micropayment has to be workable at less than $0.01, otherwise it's not a micropayment system. Basically, your whole argument is "it can't be done within the status quo". No shit, sherlock. If it could be done, someone would have done it already. That's why the status quo has to be changed.

throwawayukcyb 11y ago

> If you believe that content creators have a right to earn money there are two ways that can happen: 1) directly - you pay directly for the content that you want to consume or 2) indirectly - you see ads or sell your data in some way. I don't think this is a truism. Sites in the style of BBC/CNN/Fox/Yahoo/etc. may have a tough time with their online content if they aren't able to support those properties with ads. IME most content that's actually worth the time it takes to consume (e.g., well-composed articles and essays written by field experts) is not ad-supported. A lot is behind paywalls, and still more is provided on non-ad-supported websites. For example, distributed freely by fee-supported professional organizations or else by the author him/her-self as a tool for self-promotion/brand building. I don't see any reason why high-quality content can't survive on non-ad revenue, given that there are plenty of counter-examples. And that's just considering the ad-supported sites that are actually content-driven. A lot of online advertisement is not supporting original content creation at all.

dwild 11y ago
> For example, distributed freely by fee-supported professional organizations or else by the author him/her-self as a tool for self-promotion/brand building Content made to promote something, isn't that an ads? Sure that could happen but hell nothing stop ads from being more high quality right now. I much prefer to watch content that's primary goal is to entertain, teach, etc... and not to sell you stuff. > I don't see any reason why high-quality content can't survive on non-ad revenue, given that there are plenty of counter-examples. Well nothing stop them to exist right now. The reverse is false though, content funded by ads currently only exist based on that good ad targeting. Personally I seriously hope Google push more Youtube Red and Google Contributor. Ad work for people that can't pay for it (or don't want to), we only need something for people that doesn't want ads but can pay instead.

Omniusaspirer 11y ago

There's only a "free rider problem" if you view the internet as a tool to generate income, as opposed to a tool you can use to offer something to the world. If all ads were gone tomorrow I wouldn't see a single website I regularly use drop off the internet. I'm becoming increasingly convinced that the quality of web content on average would skyrocket if you couldn't make a dime off of ads.

ziszis 11y ago
I don't know which sites you use specifically - but i would guess many people on hn use at least one of the following: Google Search, Gmail, Facebook, Chrome/Firefox.
dwild 11y ago
How does ads affect this hypothetical world where quality of web content skyrocket? The web isn't a closed platform for a limited number of service. Multiple website are trying to survive without ads, Wikipedia is one of them. Nothing stop them. Ads allow for content creator that still need to pay rent, to actually produce content while still paying rent. You know like any job. The one that still can produce without anything, are still free to do it currently and plenty are actually doing it.
- CaptSpify 11y ago
  Everyone ends up contributing to the ad-focused world, instead. How many people post on reddit/twitter/facebook, vs their own blog?
CaptSpify 11y ago
I plug this post enough I feel like I'm in advertising: "...essentially all of the ad supported sites I visit are diversions" - https://utcc.utoronto.ca/~cks/space/blog/web/AdSupportedWebDeathView https://utcc.utoronto.ca/~cks/space/blog/web/AdSupportedWebD...
- Omniusaspirer 11y ago
  This blog post is exactly what I'm getting at. The best content comes from people who are passionate about the material, not the potential monetary income. Curiously those same people tend to have no shortage of people willing to step forward with funding to keep them doing their thing.