little1 said:
It'll be interesting to see if internet content providers can figure out a way to monetize their product in a way that doesn' twhore them out the same way radio has whored itself out. Because it won't matter if it's easily available if they can't make money from it. Somebody has to pay for the hardware, the bandwidth, etc, and at some point a website has to make money.
I think there is only one way that is ultimately going to happen and it isn't going to be advertising. The answer is something people have been working on for awhile now and still have not managed to bring into being: micropayments. And by "micro" I mean MICRO as in pennies or even fractions of pennies.
If my little 1920s and 1930s music station were able to charge 2 cents per hour to listen, at its current listenership, it would be bringing in a little over $1,000 per month. A thousand bucks is, of course, tiny in the grand scheme of things. But I am just some nobody operating out of his house spinning 75 - 85 year old records of bands few people alive today are familiar with. And it is $1,000 more than I am bringing in now and certainly more than enough to cover the expenses I am currently forking over to keep it going. And imagine the implications for someone streaming something that has a significantly broader appeal.
How many people are likely to say: "Gee, I am in the mood for 1920s and 1930s music today and it would sure make my 30 minute commute to work more cheerful - but, at two cents per hour, that will cost me a full penny and the wife says I really need to be more frugal and stop spending so much."
Problem with advertising on the Internet is that the audience for MOST websites is tiny compared with old fashioned mass media audiences. And with music radio, it is all over the place geographically. Who really cares where one's music originates from? As I type this, according to current listener IP addresses on my servers, I have listeners tuned in from New Zealand, Australia, Japan, Russia, Sweden, Germany and Mexico. Those listeners would be worthless to almost any advertiser. But they do scarf up bandwidth and, if I were paying per song per listener RIAA royalties, they would be upping the tab on that in a very big way. But barring artificial obstacles such as taxes and tariffs set up by politicians in the various countries, there's no technological reason why it should be significantly more difficult to charge overseas listeners electronically than it would be to charge listeners here in the USA. I regularly buy stuff from the UK and occasionally elsewhere via PayPal - I simply get billed in British Pounds and PayPal does the currency conversion for me and debits my bank account accordingly. As far as I can tell, if there is any extra fee that I am charged for that conversion service, it is so small that I've not picked up on it.
I think that this is also the only way that other content providers such as newspapers are also going to make it.
The New York Times is planning to start charging a monthly fee for access to its website. They are kidding themselves if they think they are going to have anything other than a fairly small niche subscriber base. Who, in this day and age under age 40 is going to decide: "I think I am going to start using
The New York Times or the
Star-Telegram or
Morning News websites as my source for news." I get my news from all sorts of places. I DO visit all of those newspaper's websites and dozens of other newspaper's websites from time to time - and when I do it is most often a result of either Google News search results or links that other people have put up in message boards or blogs that I follow. And if it is a story that I am REALLY interested in, I am likely to follow it though MULTIPLE news sources. Exactly how many monthly subscriptions to various online newspapers can most people afford? Sure, you get unlimited access for those monthly subscriptions. But in a given month, the
Star-Telegram or
Morning News might have, at best, a handful of articles I am especially interested in. The rest I couldn't care less about - and I sure am not going to spend any time looking at it to "get my money's worth" because there is already more interesting and compelling information to be found on the Internet than I could ever have time to follow.
On the other hand, imagine if every time you followed a link from Google News or a message board to an article on a news website, the website could charge you some tiny amount that was so small as to almost be insignificant to you, even if you viewed a LOT of articles. Suddenly, newspapers would be in LOVE with Google News or anyone else who sends traffic their way. News organizations could perhaps charge a higher fee for an article for the first several hours of its existence when it is still "news" and at a lower rate when it is no longer considered current hot news.
Imagine that you write some sort of article on your website that is more or less timeless - for example, a "how to" article or an essay on a subject with a certain amount of appeal - and charge a penny per view. If you only get 100 views per day, that one single article will pay you $365 per year for every year it continues to attract visitors.
THAT is how the Internet will someday be monetized.
The problem right now is twofold: the fees for processing a single transaction cost significantly more than a penny and, even if there were no fees, the time it takes you just to make a payment online for ANY amount is probably worth far more than a penny. Imagine the hassle of simply having to log into every website you visit - including sites that you have no real plans to visit ever again after you get what you need. Thus for it to work, someone would have to come up with a micropayment system that works with one single login that is good across a very, very wide variety of websites and is able to charge you for it almost instantaneously without your having to do very much other than
perhaps clicking on an OK button. Or, perhaps someone could come up with a standardized system - for example, ALL streaming audio services that use, lets say, GoogleMicroPay agree to charge three cents per hour and all news organizations agree to charge a penny per story per view, etc. and it is simply understood you will be billed that amount if you access any such content while logged into GoogleMicroPay.
There are plenty of people right how who are trying to figure out how to make exactly that happen. And, eventually, someone WILL figure it out. And when that happens, THAT is when there will be money to be made providing content on the Internet.
Content in the future won't be free. But it will be ALMOST free. It is like when a house guest asks for a glass of tap water or uses your toilet. The water they consume is not free - you (or your landlord) ARE charged for it based on how much you use. Same with any toilet paper your guest might use. But who is going to worry about the bill at the end of the month based on a house guest getting a glass of water or flushing a toilet or even using the toilet paper? So you spend a dollar or so a month because you listen to this really, really cool 1920s & 1930s music station on your way to and from work every day at two pennies per hour. So what? So you are a news junkie and end up reading twenty news articles per day every day at a penny per pop. So you dropped $6 on something you enjoy. Big deal. But it will be a VERY big deal if you have a large enough audience and are collecting all the pennies.