10 ms·

"If you are not paying for it..."

142 points by acangiano 16y ago

gkoberger 16y ago
We've created a culture where we want everything for free, even going as far as to block ads with AdBlock... and then we complain when things don't go our way. This can't be sustained forever. If we want legitimate content producers to take the Internet seriously as a platform, we need to start forking over money. Edit: To anyone replying to me, we can debate this forever. The Chris Anderson v Malcolm Gladwell debate proved it's a controversial topic. However, I don't know where you're getting "close to zero." A good engineer or other employee is at least $100k a year. It may cost almost nothing for new headlines to show up on Digg every day, however Diggs 100 or so employees all need to put food on the table somehow.
- kiba 16y ago
  On the contrary, free stuff is the overriding trend for stuff that have the marginal cost of replication close to zero. It is not so much culture that is driving it, but the economic forces that does. Also, the allegedly common complainers who only want free stuff is unquantified. You will need some evidence to show that most people are conscious freeloaders who complain a lot.
  - siglesias 16y ago
    The marginal cost of replication for things like news, drugs, and software, especially software, have always been close to zero, and your economics would suggest that these would have trended toward marginal costs of a few bucks per CD, but that's the wrong way to think about it. Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here.
    - pchristensen 16y ago
      It's the lack of straightforward substitutes that keep prices high on software and drugs. The large fixed cost of development only means that (proprietary) software won't get written or drugs won't be discovered and put through FDA trials if prices fall due to competition. Take commercial C compilers. Used to be a thriving industry, but once Gcc got good enough, people stopped paying.
      - kiba 16y ago
        Right, copyright often retard and frustrate attempt to get it to marginal cost. Still, there are pirated goods, which are often inferior products due to inconvenient access. The one exception that I had already mentioned are translated Japanese manga and to less extent other Asia originated comics such as China and Korea. Generally, they act more as advertising and brake to competitor substitute goods that could otherwise gain momentum.
        rick888 16y ago
        "which are often inferior products due to inconvenient access" It's interesting because DRM and the "inconvenient access" you speak of were created as a direct result of mass piracy.
      - neutronicus 16y ago
        People certainly still pay for intel's C compiler.
        kiba 16y ago
        So it doesn't completely displace most compiler, but it does displace a lot? On the flip side, how many people actually use Intel's C compiler as opposed to people who just use GCC?
        hvs 16y ago
        On Windows, GCC is not a very viable option (yes, I'm aware of Cygwin, MinGW, etc) for production software right now. And you'll be hard pressed to find a solid compiler that ISN'T proprietary.
    - kiba 16y ago
      Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here. Just because something cost a lot of money to produce doesn't mean you get to price it "cost + profit margin". Reality doesn't work that way. And things does get driven down to zero. Look at pirates who offer download of vista for free on bittorrent. Webcomics are free. Most Asian comics that are available in English are in actual, pirated and scanlated, but are often available in way more convenient format than the legitimate things(which are often not translated and probably never will make it to the shore of foreign countries). Most stuff on the internet are free anyway, which should be ample evidence for my argument.
      - siglesias 16y ago
        Most stuff on the internet are free anyway, which should be ample evidence for my argument. What stuff? Stuff that's paid for with advertisement dollars? Do you think this stuff would still be free or marginal cost without those advertisement dollars? I think the fact that so much software and media (probably well over 90%) is paid for in some fashion by consumers (either through advertisers or directly) is evidence to the contrary of what you are saying. There's no such thing as a free lunch. Econ 101.
        kiba 16y ago
        Things would still be driven down to marginal cost. It would instead be pirated, rather than be supported by advertising dollars. It would mean that people would have to find alternative business models. So, it does not void my arguments at all.
        deleted 16y ago
        [deleted]
        siglesias 16y ago
        The risk of being fined makes the cost of piracy non zero.
        16y ago
    - rick888 16y ago
      "On the contrary, free stuff is the overriding trend for stuff that have the marginal cost of replication close to zero. It is not so much culture that is driving it, but the economic forces that does." Currency also has little value (and is relatively easy and cheap to replicate). It's just ink and paper, but we value it as much higher. If you bought software from me and I sent you random bytes instead, would you be satisfied? According to you, they have the same value. You aren't paying for the bits that are assorted in a specific order. You are paying for the time, effort, and knowledge it took to assort those bits (which is still unique as the average person can't press a button and create Photoshop with no effort). "Also, the allegedly common complainers who only want free stuff is unquantified. You will need some evidence to show that most people are conscious freeloaders who complain a lot." As a simple example, look at some of the startups here on HN. Many have gotten rid of the freemium model. The reason? Freeloaders are taking up resources and they can't afford it. Freeloaders are driving the cost of software to $0. Because software isn't something tangible, its value is based on what people think it's worth. If anybody can download your app for free (because freeloaders have downloaded it and spread it around), the perceived value will rapidly approach $0. The general attitude about getting everything for free will just lead to less commercial software. Personally, I'm not selling software anymore. I'm selling SaaS. So Instead of paying a flat-fee for software, my users will now be paying a monthly fee. Business owners aren't stupid. They will eventually realize that piracy is impossible to defend against. The consequences are less freedom for the customer/end user.
      - kiba 16y ago
        The general attitude about getting everything for free will just lead to less commercial software. Personally, I'm not selling software anymore. I'm selling SaaS. So Instead of paying a flat-fee for software, my users will now be paying a monthly fee. Business owners aren't stupid. They will eventually realize that piracy is impossible to defend against. The consequences are less freedom for the customer/end user. My opinion is that commercial software will just change, not be less and less. I also thought some people are too dumb to realize that piracy is impossible to defend against and will be swept away in changes. I just realize that I wasn't looking at the right kind of people. Internet savy and those who are aware of the nature of software economic already realize this. SaaS is exactly the conclusion that I come up for a web application that I was supposed and still angling to complete.
    - davidw 16y ago
      Once something is a 'commodity', and the sunk costs have been recouped, the price will trend towards the marginal cost. This comes straight from Varian and Shapiro's "Information Rules" by the way - it's not just something I'm making up.
      - polynomial 16y ago
        "Intellectual Property" is the dam that keeps the waters of commodification at bay (where you have products with a negligible cost of replication.)
        kiba 16y ago
        It's more like a leaky dam that will eventually burst and explode. It slows down commodification of software, sometime to a significant degrees.
- Xk 16y ago
  I disagree, and your comment is a case in point. An incredibly large portion of the valuable content on the internet is written by people who expect no payoff in the traditional sense of the word. You don't get anything money by writing that comment, yet you write it none the less. This is becoming more and more the case.
  - _delirium 16y ago
    Indeed, if anything I notice a slight negative correlation. The most unabashedly "capitalist" content providers, in the sense of doing it mainly for the money, are the tabloidish blogs: gawker, valleywag, gizmodo, etc. They produce pretty mediocre content (and we don't even have to discuss the content farms). The top content imo comes mostly from folks not being paid, at least not being paid directly for the content: university professors, essayists like Paul Graham, tech bloggers like Yosef K, and so on, who write about stuff that interests them, and publish it online. Some of them do some low-level monetization of their content via Amazon links and a few ads, but many don't even do that. It's not a pure anti-correlation, because there is good commercial stuff and crappy free stuff, but I certainly don't see a strong positive correlation either.
    - Paulomus 16y ago
      Yes, Wikipedia would be another example. It is one of the most useful destinations on the web, but does not charge anything. So too are web-comics, just about all of which are free to view, while the creators make their money elsewhere (through donations, t-shirt/book sales etc.). In these kind of things it is the voluntary readership/participation that makes the site/blog/comic a success. The existance of a community of users is a valuable resource that should not be alienated lightly.
    - loewenskind 16y ago
      >essayists like Paul Graham pg doesn't get paid directly from the essays on his site (afaik), but he does gain reputation and credibility. How many more books did he sell because of his essays (e.g. I bought On Lisp after reading "beating the averages")? The market has been more sophisticated than "give me X and I'll give you money" for a very long time.
- rokhayakebe 16y ago
  we need to start forking over money I like how you say we should pay, as opposed to we should ask users to pay. The funny thing about internet entrepreneurs is we want to get everything for free, yet charge users for something.
  - acangiano 16y ago
    > The funny thing about internet entrepreneurs is we want to get everything for free On the contrary, I'd say that entrepreneurs love rewarding fellow entrepreneurs who create a valuable service or product.
    - StavrosK 16y ago
      I used to want to get everything for free, until I made historious. Now, my mindset is "these guys deserve my money for their product" (if the product is good enough, obviously).
- w1ntermute 16y ago
  > We've created a culture where we want everything for free, even going as far as to block ads with AdBlock... and then we complain when things don't go our way. I think you're overestimating the power of AdBlock. In fact, I know friends who aren't tech savvy to whom I've shown AdBlock, and when they get a new computer, they don't even remember to install AdBlock. We tend to be annoyed by web ads because we're tech savvy, but many average users couldn't care less that they're being bombarded by a constant stream of corporate propaganda. Because of this, while it might be exceedingly difficult to monetize a site geared towards tech savvy users (Reddit, for example), many other sites (like Facebook) get by just fine.
  - edanm 16y ago
    I'm a techie who doesn't use AdBlock. And I've actually noticed something very different. I rarely look at ads on most sites, but on Tech-oriented sites, the ads tend to be much better. This is because they're more focused on my niche. For example, I've clicked on dozens of ads on Stack Overflow, and even subscribed to a few things that way. I honestly think turning on AdBlock is depriving me of valuable information, on those sites at least.
    - Supermighty 16y ago
      This is an example of where advertising should go. Highly targeted ads tailored to specific individuals. If there is an ad for something I would genuinely want to learn about then by all means show it to me. The catch is that we have to reveal a lot of personal information before the ads can become highly targeted.
      - tnorthcutt 16y ago
        The catch is that we have to reveal a lot of personal information before the ads can become highly targeted. Not necessarily, unless that also includes revealing a lot of personal information by virtue of the site you're visiting. For example, a site focused on a specific sports team could fairly easily target their advertising to their typical user, and be showing ads that are actually relevant to their users.
- sliverstorm 16y ago
  > Diggs 100 or so employees all need to put food on the table somehow. I think that's the real problem here. People don't give a damn whether Digg's employees can afford food; they want what they want, when they want it, and for the price that they want it. That, or they expect someone else to do the paying for it.
- deleted 16y ago
  [deleted]
- greenlblue 16y ago
  There is another reason people expect stuff to be free and it's because business people in general don't know of any other way of framing things. The last 50 years has been all about advertising and so the business culture knows how to tie ads with content but they don't know how to create great content and convince users to pay for it.
  - eru 16y ago
    Are you sure? I buy my books without ads.
    - greenlblue 16y ago
      Flip to the last few pages of any technical book. I know for a fact that O'Reilly books put a plug for other related O'Reilly books in the last few pages and I'm certain most other books to the same thing and some even have them up front. Technical books I think qualify as good content.
      - eru 16y ago
        OK. But you have to look for them. And the original comment was about all content, not some.
- Alex3917 16y ago
  "This can't be sustained forever. If we want legitimate content producers to take the Internet seriously as a platform, we need to start forking over money." Right now there's only a tiny trickle of good content being created on the Internet. Of the hundreds of thousands of posts being written each day, there are maybe 5 at best that don't completely suck. What we really need is a system where the authors of the best 25 articles of the day each take home 100K or so. For the nominal cost of less than a billion dollars a year we could spark an intellectual renaissance to rival any other in human history.
  - billybob 16y ago
    "Of the hundreds of thousands of posts being written each day, there are maybe 5 at best that don't completely suck." I'm sorry, but that's just silly. 1) You're not reading the whole internet, 2) you're not the intended audience for much of what's written, and 3) opinions vary. Are you proposing we replace the free market of authors and readers with some central judging authority? How would these people filter through all this content, on what basis would they judge it, and how would they be funded? How do we protected against government meddling and political bias? This is a pretty big problem you're creating to replace a system which, basically, seems to work fine. It would be nice to help creators make money, but you can't fix human taste.
    - Alex3917 16y ago
      "Are you proposing we replace the free market of authors and readers" We don't have a free market of authors and readers. Readers don't currently pay authors, this is what needs to change. "How would these people filter through all this content, on what basis would they judge it, and how would they be funded? How do we protected against government meddling and political bias?" Not sure. "This is a pretty big problem you're creating to replace a system which, basically, seems to work fine." I don't think it works fine at all, judging by the fact that all of our biggest problems are marketing problems. In any given area of society the science is between 25 and 100 years ahead of the status quo.
      - 16y ago
- nollidge 16y ago
  The only reason I use AdBlock is to eliminate distractions from the page. I don't mind being marketed to, but I do mind it when it gets in the way.
_delirium 16y ago
Sometimes even if you are paying for it, if someone else is paying more. For example, newspaper subscribers are closer to being products than customers, since ad revenue is typically much larger than subscription revenue.
- wuputah 16y ago
  Great example. I delivered newspapers for a summer, and I realized that the cost of the newspaper was about the same as what I made for delivering it, as I got paid per subscriber. This doesn't factor in the fact that I was working for a third party company, whose goal was to made a profit on the operation. So, it seemed the paper actually pays more just to get the paper delivered than the subscriber paid for it. Advertising pays for everything else. (I'm curious how newsstands and other outlets work, but I'd have to guess that the papers/magazines are provided at very low cost as well, with most of the price on the sale going to the stand operator.)
  - _delirium 16y ago
    I recall reading somewhere that this is one reason there's so many ways to get magazines for free via various promotions and third-party deals and frequent-flyer miles and such. Magazines charge mostly as a way of convincing advertisers that their readership numbers are legit, rather than for the actual revenue--- if you ship 100,000 copies to people who actually shelled out $30 each, that's more convincing evidence to advertisers that people are actually reading it, versus if you mailed out 100,000 free copies. But magazines are always trying to game the system by finding various ways to get magazines to people while having them still count as "paying subscriber".
- nanairo 16y ago
  Very true. As I've been studying this topic lately I can even provide you some hard data. A financially stable newspaper gets around 75-80% of its gross revenue from advertisements. That's why advertisers have so much power over content, even news content. I don't know the exact figure for magazines, and it could very well be lower, but this should give you an idea. In fact if you check the literature you'll see that a common idea is that newspapers are in the business of selling customers to advertisers, and they will try to attract a certain type of reader in order to get certain type of advertisers.
zach 16y ago
This needs to be memorialized. Understanding this, of course, explains Google's approach to customer, er, consumer service. Much to their nonpaying consumers' chagrin, naturally. Because consumers' support and service expectation does scale with the price they pay, but not all the way to zero! On the business side, nonpaying consumers are cheaper to scale up than any product you can sell. Which is a blessing and a curse...
- bpm140 16y ago
  The guy who said it is Andrew Lewis. Might I suggest "Lewis's Law"?
  - zach 16y ago
    I would've thought there would be a legitimate claim on the name already, but it appears not. Lewis's Law it is!
- michaelfairley 16y ago
  Google still isn't particularly good at dealing with their paying customers though. AdWords support is OK at best, but lack of support basically killed the Nexus One.
kiba 16y ago
This is negative news and media is biased toward negative stuff. Moreover, it is a mention of a few well known companies and sites. I hypothesize that the players are merely changing and that their strategy of getting large userbase fail because the quality of content is falling, rather than rising, thus decreasing the traffic quality. This is also in conjuncture with the hypothesis that specialized interests tend to convert better than general social interests because specialized interests tend to have product related items they like to buy.
- natep 16y ago
  I think you're responding to the article, when the post links to a comment by blue_beetle, FYI.
pbw 16y ago
Even if you are paying for it you might be the product being sold. Consider hip night club or a star trek convention, in both cases people pay to get in, but the crowd is really the main attraction. People spend hours getting ready for these things. I'm told. Any crowd is going to be part of the product being sold and the market you sell into. Any crowd, online or off, is going to draw performers, whether for free or professional. People like to be seen, they like to be noticed, they like to contribute. I don't see user-generated sites as some kind of slave mine. Most people are online of their own free will.
- Qz 16y ago
  Amended: "If you're not paying what it's worth, ..."
  - ZeroGravitas 16y ago
    Apple announces on stage as part of its keynotes how many credit cards it has on file. In other words they're selling you right there in the open. Can you really argue that you're getting your contract AT&T iPhone for less than it's worth?
    - nanairo 16y ago
      But Apple cannot sell your credit card number to other people, they still need to get you to pay for it. Advertisement is different. Advertisers pay the newspaper immediately in order to appear on the newspaper/magazine. And because they pay so much more than people buying the actual newspaper/magazine, it can be a great business for the later to attract more people... even going as far as giving the newspaper away for free. Apple (pre iAds) was making money from you buying the phone: compared to that making money from apps sold is peanuts. So much so that it can be beneficial to let app developers in for free just to get more people buying the phone. To summarise: Apple tries to attract customers with apps, newspapers try to attract advertisers with customers. Customers don't buy more newspapers because there are more ads, but advertisers buy more ads space if there are more customers.
    - 16y ago
jbert 16y ago
...you're either the product being sold or you're enjoying a publically provided service whose costs are met by the taxpaying base.
- run4yourlives 16y ago
  i.e. You.
ugh 16y ago
That seems like an overly simplistic portrayal to me. You might not pay anything for using Google but that doesn’t mean that Google can do whatever they want. The relationship between Google and yourself wouldn’t change much if they did away with the ads and charged you money. They want to keep you happy whether you are a customer (i.e. directly pay them money) or not. Paying customer or ad target, it doesn’t really matter all that much. Two sided markets with their network effects are certainly fascinating [+] but they are also nothing new, nothing extraordinary and certainly not abusive. [+] It is possible to get negative prices (whenever you get anything for free you can immediately start to look for the two sided market and network effects) and prices that would otherwise be above monopoly prices.

142 points by acangiano 16y ago

We've created a culture where we want everything for free, even going as far as to block ads with AdBlock... and then we complain when things don't go our way. This can't be sustained forever. If we want legitimate content producers to take the Internet seriously as a platform, we need to start forking over money. Edit: To anyone replying to me, we can debate this forever. The Chris Anderson v Malcolm Gladwell debate proved it's a controversial topic. However, I don't know where you're getting "close to zero." A good engineer or other employee is at least $100k a year. It may cost almost nothing for new headlines to show up on Digg every day, however Diggs 100 or so employees all need to put food on the table somehow.

kiba 16y ago
On the contrary, free stuff is the overriding trend for stuff that have the marginal cost of replication close to zero. It is not so much culture that is driving it, but the economic forces that does. Also, the allegedly common complainers who only want free stuff is unquantified. You will need some evidence to show that most people are conscious freeloaders who complain a lot.
- siglesias 16y ago
  The marginal cost of replication for things like news, drugs, and software, especially software, have always been close to zero, and your economics would suggest that these would have trended toward marginal costs of a few bucks per CD, but that's the wrong way to think about it. Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here.
  - pchristensen 16y ago
    It's the lack of straightforward substitutes that keep prices high on software and drugs. The large fixed cost of development only means that (proprietary) software won't get written or drugs won't be discovered and put through FDA trials if prices fall due to competition. Take commercial C compilers. Used to be a thriving industry, but once Gcc got good enough, people stopped paying.
    - kiba 16y ago
      Right, copyright often retard and frustrate attempt to get it to marginal cost. Still, there are pirated goods, which are often inferior products due to inconvenient access. The one exception that I had already mentioned are translated Japanese manga and to less extent other Asia originated comics such as China and Korea. Generally, they act more as advertising and brake to competitor substitute goods that could otherwise gain momentum.
      - rick888 16y ago
        "which are often inferior products due to inconvenient access" It's interesting because DRM and the "inconvenient access" you speak of were created as a direct result of mass piracy.
    - neutronicus 16y ago
      People certainly still pay for intel's C compiler.
      - kiba 16y ago
        So it doesn't completely displace most compiler, but it does displace a lot? On the flip side, how many people actually use Intel's C compiler as opposed to people who just use GCC?
        hvs 16y ago
        On Windows, GCC is not a very viable option (yes, I'm aware of Cygwin, MinGW, etc) for production software right now. And you'll be hard pressed to find a solid compiler that ISN'T proprietary.
  - kiba 16y ago
    Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here. Just because something cost a lot of money to produce doesn't mean you get to price it "cost + profit margin". Reality doesn't work that way. And things does get driven down to zero. Look at pirates who offer download of vista for free on bittorrent. Webcomics are free. Most Asian comics that are available in English are in actual, pirated and scanlated, but are often available in way more convenient format than the legitimate things(which are often not translated and probably never will make it to the shore of foreign countries). Most stuff on the internet are free anyway, which should be ample evidence for my argument.
    - siglesias 16y ago
      Most stuff on the internet are free anyway, which should be ample evidence for my argument. What stuff? Stuff that's paid for with advertisement dollars? Do you think this stuff would still be free or marginal cost without those advertisement dollars? I think the fact that so much software and media (probably well over 90%) is paid for in some fashion by consumers (either through advertisers or directly) is evidence to the contrary of what you are saying. There's no such thing as a free lunch. Econ 101.
      - kiba 16y ago
        Things would still be driven down to marginal cost. It would instead be pirated, rather than be supported by advertising dollars. It would mean that people would have to find alternative business models. So, it does not void my arguments at all.
        deleted 16y ago
        [deleted]
      - siglesias 16y ago
        The risk of being fined makes the cost of piracy non zero.
        16y ago
  - rick888 16y ago
    "On the contrary, free stuff is the overriding trend for stuff that have the marginal cost of replication close to zero. It is not so much culture that is driving it, but the economic forces that does." Currency also has little value (and is relatively easy and cheap to replicate). It's just ink and paper, but we value it as much higher. If you bought software from me and I sent you random bytes instead, would you be satisfied? According to you, they have the same value. You aren't paying for the bits that are assorted in a specific order. You are paying for the time, effort, and knowledge it took to assort those bits (which is still unique as the average person can't press a button and create Photoshop with no effort). "Also, the allegedly common complainers who only want free stuff is unquantified. You will need some evidence to show that most people are conscious freeloaders who complain a lot." As a simple example, look at some of the startups here on HN. Many have gotten rid of the freemium model. The reason? Freeloaders are taking up resources and they can't afford it. Freeloaders are driving the cost of software to $0. Because software isn't something tangible, its value is based on what people think it's worth. If anybody can download your app for free (because freeloaders have downloaded it and spread it around), the perceived value will rapidly approach $0. The general attitude about getting everything for free will just lead to less commercial software. Personally, I'm not selling software anymore. I'm selling SaaS. So Instead of paying a flat-fee for software, my users will now be paying a monthly fee. Business owners aren't stupid. They will eventually realize that piracy is impossible to defend against. The consequences are less freedom for the customer/end user.
    - kiba 16y ago
      The general attitude about getting everything for free will just lead to less commercial software. Personally, I'm not selling software anymore. I'm selling SaaS. So Instead of paying a flat-fee for software, my users will now be paying a monthly fee. Business owners aren't stupid. They will eventually realize that piracy is impossible to defend against. The consequences are less freedom for the customer/end user. My opinion is that commercial software will just change, not be less and less. I also thought some people are too dumb to realize that piracy is impossible to defend against and will be swept away in changes. I just realize that I wasn't looking at the right kind of people. Internet savy and those who are aware of the nature of software economic already realize this. SaaS is exactly the conclusion that I come up for a web application that I was supposed and still angling to complete.
  - davidw 16y ago
    Once something is a 'commodity', and the sunk costs have been recouped, the price will trend towards the marginal cost. This comes straight from Varian and Shapiro's "Information Rules" by the way - it's not just something I'm making up.
    - polynomial 16y ago
      "Intellectual Property" is the dam that keeps the waters of commodification at bay (where you have products with a negligible cost of replication.)
      - kiba 16y ago
        It's more like a leaky dam that will eventually burst and explode. It slows down commodification of software, sometime to a significant degrees.
Xk 16y ago
I disagree, and your comment is a case in point. An incredibly large portion of the valuable content on the internet is written by people who expect no payoff in the traditional sense of the word. You don't get anything money by writing that comment, yet you write it none the less. This is becoming more and more the case.
- _delirium 16y ago
  Indeed, if anything I notice a slight negative correlation. The most unabashedly "capitalist" content providers, in the sense of doing it mainly for the money, are the tabloidish blogs: gawker, valleywag, gizmodo, etc. They produce pretty mediocre content (and we don't even have to discuss the content farms). The top content imo comes mostly from folks not being paid, at least not being paid directly for the content: university professors, essayists like Paul Graham, tech bloggers like Yosef K, and so on, who write about stuff that interests them, and publish it online. Some of them do some low-level monetization of their content via Amazon links and a few ads, but many don't even do that. It's not a pure anti-correlation, because there is good commercial stuff and crappy free stuff, but I certainly don't see a strong positive correlation either.
  - Paulomus 16y ago
    Yes, Wikipedia would be another example. It is one of the most useful destinations on the web, but does not charge anything. So too are web-comics, just about all of which are free to view, while the creators make their money elsewhere (through donations, t-shirt/book sales etc.). In these kind of things it is the voluntary readership/participation that makes the site/blog/comic a success. The existance of a community of users is a valuable resource that should not be alienated lightly.
  - loewenskind 16y ago
    >essayists like Paul Graham pg doesn't get paid directly from the essays on his site (afaik), but he does gain reputation and credibility. How many more books did he sell because of his essays (e.g. I bought On Lisp after reading "beating the averages")? The market has been more sophisticated than "give me X and I'll give you money" for a very long time.
rokhayakebe 16y ago
we need to start forking over money I like how you say we should pay, as opposed to we should ask users to pay. The funny thing about internet entrepreneurs is we want to get everything for free, yet charge users for something.
- acangiano 16y ago
  > The funny thing about internet entrepreneurs is we want to get everything for free On the contrary, I'd say that entrepreneurs love rewarding fellow entrepreneurs who create a valuable service or product.
  - StavrosK 16y ago
    I used to want to get everything for free, until I made historious. Now, my mindset is "these guys deserve my money for their product" (if the product is good enough, obviously).
w1ntermute 16y ago
> We've created a culture where we want everything for free, even going as far as to block ads with AdBlock... and then we complain when things don't go our way. I think you're overestimating the power of AdBlock. In fact, I know friends who aren't tech savvy to whom I've shown AdBlock, and when they get a new computer, they don't even remember to install AdBlock. We tend to be annoyed by web ads because we're tech savvy, but many average users couldn't care less that they're being bombarded by a constant stream of corporate propaganda. Because of this, while it might be exceedingly difficult to monetize a site geared towards tech savvy users (Reddit, for example), many other sites (like Facebook) get by just fine.
- edanm 16y ago
  I'm a techie who doesn't use AdBlock. And I've actually noticed something very different. I rarely look at ads on most sites, but on Tech-oriented sites, the ads tend to be much better. This is because they're more focused on my niche. For example, I've clicked on dozens of ads on Stack Overflow, and even subscribed to a few things that way. I honestly think turning on AdBlock is depriving me of valuable information, on those sites at least.
  - Supermighty 16y ago
    This is an example of where advertising should go. Highly targeted ads tailored to specific individuals. If there is an ad for something I would genuinely want to learn about then by all means show it to me. The catch is that we have to reveal a lot of personal information before the ads can become highly targeted.
    - tnorthcutt 16y ago
      The catch is that we have to reveal a lot of personal information before the ads can become highly targeted. Not necessarily, unless that also includes revealing a lot of personal information by virtue of the site you're visiting. For example, a site focused on a specific sports team could fairly easily target their advertising to their typical user, and be showing ads that are actually relevant to their users.
sliverstorm 16y ago
> Diggs 100 or so employees all need to put food on the table somehow. I think that's the real problem here. People don't give a damn whether Digg's employees can afford food; they want what they want, when they want it, and for the price that they want it. That, or they expect someone else to do the paying for it.
deleted 16y ago
[deleted]
greenlblue 16y ago
There is another reason people expect stuff to be free and it's because business people in general don't know of any other way of framing things. The last 50 years has been all about advertising and so the business culture knows how to tie ads with content but they don't know how to create great content and convince users to pay for it.
- eru 16y ago
  Are you sure? I buy my books without ads.
  - greenlblue 16y ago
    Flip to the last few pages of any technical book. I know for a fact that O'Reilly books put a plug for other related O'Reilly books in the last few pages and I'm certain most other books to the same thing and some even have them up front. Technical books I think qualify as good content.
    - eru 16y ago
      OK. But you have to look for them. And the original comment was about all content, not some.
Alex3917 16y ago
"This can't be sustained forever. If we want legitimate content producers to take the Internet seriously as a platform, we need to start forking over money." Right now there's only a tiny trickle of good content being created on the Internet. Of the hundreds of thousands of posts being written each day, there are maybe 5 at best that don't completely suck. What we really need is a system where the authors of the best 25 articles of the day each take home 100K or so. For the nominal cost of less than a billion dollars a year we could spark an intellectual renaissance to rival any other in human history.
- billybob 16y ago
  "Of the hundreds of thousands of posts being written each day, there are maybe 5 at best that don't completely suck." I'm sorry, but that's just silly. 1) You're not reading the whole internet, 2) you're not the intended audience for much of what's written, and 3) opinions vary. Are you proposing we replace the free market of authors and readers with some central judging authority? How would these people filter through all this content, on what basis would they judge it, and how would they be funded? How do we protected against government meddling and political bias? This is a pretty big problem you're creating to replace a system which, basically, seems to work fine. It would be nice to help creators make money, but you can't fix human taste.
  - Alex3917 16y ago
    "Are you proposing we replace the free market of authors and readers" We don't have a free market of authors and readers. Readers don't currently pay authors, this is what needs to change. "How would these people filter through all this content, on what basis would they judge it, and how would they be funded? How do we protected against government meddling and political bias?" Not sure. "This is a pretty big problem you're creating to replace a system which, basically, seems to work fine." I don't think it works fine at all, judging by the fact that all of our biggest problems are marketing problems. In any given area of society the science is between 25 and 100 years ahead of the status quo.
    - 16y ago
nollidge 16y ago
The only reason I use AdBlock is to eliminate distractions from the page. I don't mind being marketed to, but I do mind it when it gets in the way.

_delirium 16y ago

Sometimes even if you are paying for it, if someone else is paying more. For example, newspaper subscribers are closer to being products than customers, since ad revenue is typically much larger than subscription revenue.

wuputah 16y ago
Great example. I delivered newspapers for a summer, and I realized that the cost of the newspaper was about the same as what I made for delivering it, as I got paid per subscriber. This doesn't factor in the fact that I was working for a third party company, whose goal was to made a profit on the operation. So, it seemed the paper actually pays more just to get the paper delivered than the subscriber paid for it. Advertising pays for everything else. (I'm curious how newsstands and other outlets work, but I'd have to guess that the papers/magazines are provided at very low cost as well, with most of the price on the sale going to the stand operator.)
- _delirium 16y ago
  I recall reading somewhere that this is one reason there's so many ways to get magazines for free via various promotions and third-party deals and frequent-flyer miles and such. Magazines charge mostly as a way of convincing advertisers that their readership numbers are legit, rather than for the actual revenue--- if you ship 100,000 copies to people who actually shelled out $30 each, that's more convincing evidence to advertisers that people are actually reading it, versus if you mailed out 100,000 free copies. But magazines are always trying to game the system by finding various ways to get magazines to people while having them still count as "paying subscriber".
nanairo 16y ago
Very true. As I've been studying this topic lately I can even provide you some hard data. A financially stable newspaper gets around 75-80% of its gross revenue from advertisements. That's why advertisers have so much power over content, even news content. I don't know the exact figure for magazines, and it could very well be lower, but this should give you an idea. In fact if you check the literature you'll see that a common idea is that newspapers are in the business of selling customers to advertisers, and they will try to attract a certain type of reader in order to get certain type of advertisers.

zach 16y ago

This needs to be memorialized. Understanding this, of course, explains Google's approach to customer, er, consumer service. Much to their nonpaying consumers' chagrin, naturally. Because consumers' support and service expectation does scale with the price they pay, but not all the way to zero! On the business side, nonpaying consumers are cheaper to scale up than any product you can sell. Which is a blessing and a curse...

bpm140 16y ago
The guy who said it is Andrew Lewis. Might I suggest "Lewis's Law"?
- zach 16y ago
  I would've thought there would be a legitimate claim on the name already, but it appears not. Lewis's Law it is!
michaelfairley 16y ago
Google still isn't particularly good at dealing with their paying customers though. AdWords support is OK at best, but lack of support basically killed the Nexus One.

kiba 16y ago

This is negative news and media is biased toward negative stuff. Moreover, it is a mention of a few well known companies and sites. I hypothesize that the players are merely changing and that their strategy of getting large userbase fail because the quality of content is falling, rather than rising, thus decreasing the traffic quality. This is also in conjuncture with the hypothesis that specialized interests tend to convert better than general social interests because specialized interests tend to have product related items they like to buy.

natep 16y ago
I think you're responding to the article, when the post links to a comment by blue_beetle, FYI.

pbw 16y ago

Even if you are paying for it you might be the product being sold. Consider hip night club or a star trek convention, in both cases people pay to get in, but the crowd is really the main attraction. People spend hours getting ready for these things. I'm told. Any crowd is going to be part of the product being sold and the market you sell into. Any crowd, online or off, is going to draw performers, whether for free or professional. People like to be seen, they like to be noticed, they like to contribute. I don't see user-generated sites as some kind of slave mine. Most people are online of their own free will.

Qz 16y ago
Amended: "If you're not paying what it's worth, ..."
- ZeroGravitas 16y ago
  Apple announces on stage as part of its keynotes how many credit cards it has on file. In other words they're selling you right there in the open. Can you really argue that you're getting your contract AT&T iPhone for less than it's worth?
  - nanairo 16y ago
    But Apple cannot sell your credit card number to other people, they still need to get you to pay for it. Advertisement is different. Advertisers pay the newspaper immediately in order to appear on the newspaper/magazine. And because they pay so much more than people buying the actual newspaper/magazine, it can be a great business for the later to attract more people... even going as far as giving the newspaper away for free. Apple (pre iAds) was making money from you buying the phone: compared to that making money from apps sold is peanuts. So much so that it can be beneficial to let app developers in for free just to get more people buying the phone. To summarise: Apple tries to attract customers with apps, newspapers try to attract advertisers with customers. Customers don't buy more newspapers because there are more ads, but advertisers buy more ads space if there are more customers.
  - 16y ago

jbert 16y ago

...you're either the product being sold or you're enjoying a publically provided service whose costs are met by the taxpaying base.

run4yourlives 16y ago
i.e. You.

ugh 16y ago

That seems like an overly simplistic portrayal to me. You might not pay anything for using Google but that doesn’t mean that Google can do whatever they want. The relationship between Google and yourself wouldn’t change much if they did away with the ads and charged you money. They want to keep you happy whether you are a customer (i.e. directly pay them money) or not. Paying customer or ad target, it doesn’t really matter all that much. Two sided markets with their network effects are certainly fascinating [+] but they are also nothing new, nothing extraordinary and certainly not abusive. [+] It is possible to get negative prices (whenever you get anything for free you can immediately start to look for the two sided market and network effects) and prices that would otherwise be above monopoly prices.