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Media The Almighty Buck

Will Internet Users Pay for Content? 419

securitas writes "One of the most challenging business problems is trying to figure out how to make money on the Internet, especially with content. Louis Borders believes that Internet users will pay for online content and explains in an interview the how and why. He is founder of Borders Group, a $3.4 billion company that is the second-largest bookseller in the USA, as well as the billion-dollar online grocer and dotcom flameout, Webvan. Borders thinks he has found the answers and has just launched KeepMedia, an online newsstand subscription service. As someone who has had spectacular success and failure in his career, Borders' latest venture will be an interesting one to watch."
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Will Internet Users Pay for Content?

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  • by sweeney37 ( 325921 ) * <mikesweeney.gmail@com> on Thursday August 07, 2003 @09:28AM (#6634091) Homepage Journal
    As a /. subscriber I guess I'm proof positive they will pay. Not only do people need to feel that they are actually getting something for the money they're paying, the price also has to be right.

    With /. being one of the largest content delivery systems on the net, I'd be curious to find out how much revenue they generate based upon subscribers alone.

    Perhaps Taco or one of the other "powers that be" would like to weigh in on this issue?

    Mike
  • by garcia ( 6573 ) * on Thursday August 07, 2003 @09:29AM (#6634102)
    Do you think the freeloader mentality on the Internet is ready for change?
    I think it's at the turn of the hockey stick, because it's at about 15 percent of the Web population that's paying for content right now--that's still a low number. Very soon, you'll see that the content that's left to be free is content that will not be trusted; content that has a bias. Just like when you pick up a magazine that's free, and you don't trust it.


    Umm, I don't trust sites on the web that I have to pay for. The only sites that I see on the web that have pay-for content are porn sites and I would MUCH rather use free sites like sublimedirectory or thehun.com just to avoid paying for stupid content. At least when I know that it is free and I am disappointed it's fine.

    Will you get cooperation from some of the big media conglomerates that already own a collection of big-brand magazines, such as AOL Time Warner and Conde Nast?
    Oh, we don't have them at launch, but we're thrilled to have 140 titles. We've had a lot of meetings with them--extremely positive meetings--and I'm sure they'll come into the platform in short order.


    You are thrilled to have 140 titles because no one is buying into your dotcom bullshit. If anyone is going to want to pay to read stuff online they are going to do it on that site only. Perusing the titles made me think, wow, this sucks hard. I will stick to news.google.com for now. At least I get free news that is basically interesting, and if it's not on the front page, I know I can quickly search for it.

    I see the Googles of the world like the freeways, where you're going from one place to the next, and that's the place to go. They have a very viable business being the main artery across the Internet. Our approach is to be a walled garden, where we bring in this very high-quality content. As a consumer, you would certainly want to use the freeway and the walled garden for different needs.
    I (and plenty of others, including NON-GEEKS) see Google as God of the Internet. If I want to find an article, I search google and it finds it fast (including newspapers, magazines on the web, etc). Why in the world would I want to search your index of pay-for stuff (and limited to 140 titles currently) when I can use google to search 140+ titles on a SINGLE TOPIC in seconds? This idea is going back to Library's and making you pay to use them. I don't think it's going to work.

    I just think that Google has cornered the market on this type of crap long before this guy could. news.google.com provides what everyone needs for EVERY media type.

    I will stick to free content thank you.

    Just my worthless .02
  • by alaric187 ( 633477 ) on Thursday August 07, 2003 @09:32AM (#6634125)
    Yeah, I think the problem is size. You need to start small and work your way up. That's what worked for ./ Most of the .coms started with $1 billion dollars and couldn't figure out why they didn't instantly have a huge customer base.

    Yeah, I love Amazon but I'd say 1 slightly successful company out of a thousand, probably doesn't make a good business model. Unless you are the Underpant Gnomes(tm), of course.
  • by garcia ( 6573 ) * on Thursday August 07, 2003 @09:33AM (#6634132)
    I subscribe. I don't do it for any of the "features" that subscribers get. I do it because I have freeloaded here forever. I use the site daily, all day, almost everyday.

    I need to give them something back. /. still allows you to read the content, post on the content, etc, w/o having to pay.

    This guy wants you to pay to read 140 titles of shit that you are most likely only going to read 5 or 6 of anyway.
  • On-the-side (Score:3, Interesting)

    by TheTomcat ( 53158 ) on Thursday August 07, 2003 @09:35AM (#6634155) Homepage
    I believe Web Content is much like Music when it comes to "making money".

    Bands rarely make cash by selling their CD, but often in side-offers like t-shirts, stickers, etc ("merch"), and ticket sales to shows.

    Web artists/authors/etc, rarely make (enough) cash by selling memberships/content, but often on side-offers, like ads, merch [yahoo.com], etc.

    S
  • by SUPAMODEL ( 601827 ) on Thursday August 07, 2003 @09:37AM (#6634164)
    The problem is that you need to actually provide something that's worth looking at for the price.
    I read my newspapers and shit online now, cause I don't want to pay AU$1 per day for a paper. I'd be interested in buying online newspapers etc and payng a lower fee every day, and one that represents the value that I am getting out of it. Just think about it - sure, you gotta have reporters and stuff. But all the stuff is typed into a computer, so it doesn't particularly cost much more to produce than it costs for the paper bit, and I ain't getting $1 worth of paper with it.
    iTunes has shown that at least apple people are prepared to pay for songs online, as long as they reflect their true value.
    Could it work for other things? Sure. Seems to work for some of the more major porn sites - some people don't want to have to troll (literally) thru usenet to get their daily fix. And as someone above pointed out, slashdot subscribers show this.
    The problem occurs when stuff is done online for the sake of doing it online, or published, but then charged exhoribitantly, and piracy is too easy. The pricing is the issue; users will only pay for what they think they are getting value for - and piracy becomes a more attractive option as the cost rises.
  • by imag0 ( 605684 ) on Thursday August 07, 2003 @09:40AM (#6634200) Homepage
    About the only way that I think I would happily toss down a monthly $fee for online content would be to have the content shipped to me on a (monthly, quarterly, whatever) basis on cd as well as the access.

    HTML is small, dynamic content can be shoe-horned into static, and you can always look back on the good old days (think LWN on cd. or Wikipedia, relive your first p0st over and over again on Slashdot the 99-01 collection, whatever).

    I think I would even pay a premium for such as service as well (20 bucks a year for online access, or, 40 and we ship you a quarterly cd as well!)

    Myself, I see the net being a little too ephemeral to be chucking down cash for something you will never get to touch or keep a library of for your own use.

    My 2 cents. Now, time to go read the article! ;)
  • by ewn ( 538392 ) <ernst-udo.wallenborn@freenet.de> on Thursday August 07, 2003 @09:43AM (#6634228) Homepage
    Every expensive product in human history that faced cheaper (free is just the extreme) competition has at one point resorted to insulting their customers by calling them cheapos. "Freeloader Mentality" is a very hollow word that describes the simple fact that people make many of their economic decisions in a surprisingly economic way: As long as major news sites are free (as in beer), people won't pay for yet another one that charges them. It's that simple and ist's called competition.Get used to it.
  • by gatkinso ( 15975 ) on Thursday August 07, 2003 @09:47AM (#6634268)
    We USED to get all TV for free.

    THEN we paid for cable - but that was ok because we got out boobs, 4 letter words, and gore... commercial free.

    NOW we pay MORE for cable, get twice the commercials, and have to watch edited versions of many movies.

    Go figure.

    So to those who say we will never pay for content on the net... what are you watching tonight, and how much are you paying again?

  • What I'm saying is that people on the internet are not likely going to pay for *just* content, unless it is something extremely specialized that is not accessible in print. But for the most part, publishing companies only make articles from their publications available online either an issue behind or only publishing some (and not all) articles in the recent issue. They are way too concerned about canabilizing their print readership. And if I have to pay, I'd still prefer the print format over reading from a computer (or any devices screen). Until there's some form of electronic paper I can take to the bathroom, on the train, or to the beach to read, I can't see paying for electronic-only content. And suprisingly, the paying print subscribers of magazines today hold no special priveleges over those who are not paying susbcribers when it comes to viewing content on the correspinding website of a print publication. If you subscribe, you should get the content in any format you want.

    If you're going to charge people for online only content, it's really got to be more that just what's available in print. Slashdot is not available in print and it is more than just news, it's an experience of discussion with a great deal of other like-minded people. I am part of a group that runs a successful non-porn (well maybe some) pay website [goofball.com]. In talking to our members, the main reason people subscribe to our site and keep renewing their subscriptions is the experience, not just the content. The experience being the activity in the various message forms, the ability to rate and comment on every piece of content, the ability to parametrically search and access all content for the past 6 years (online publicaitons rarely offer that), the ability to see who's currently online, etc.

    Sorry for the shameless plug, but it illustrates the point that you really can't charge for *just* content presented in the same way as print. I don't believe Salon executed successfully using this model, and I can't see how anyone else could either.

    Just my 2 cents ...

  • by glesga_kiss ( 596639 ) on Thursday August 07, 2003 @09:50AM (#6634298)
    Umm, I don't trust sites on the web that I have to pay for.

    Hell, I don't even trust sites that require a login. It's fair game if you post messages/articles on the site, or when you head to the checkout, but if they want me to log in just to read the content, then I'll be hitting that back button.

    And as Garcia says above, the chances are that the back button will be taking me back to a Google search, and I'm sure the next site in the list will be much more accessible. Their loss.

  • by aengblom ( 123492 ) on Thursday August 07, 2003 @09:59AM (#6634389) Homepage
    Yes, they will when they have to. When they start logging on to sites that just arn't there anymore.

    Now, I'm not going to pay for general news today. I can get it at the New York Times, the Washington Post, USA Today, CNN, MSNBC, LA Times etc. etc. etc. I'd pay if they all dissapeared, but they won't.

    NYTimes is profitable. The Washington Post's website is it's only real national edition and too strategically important. Others are similarly situated almost all are heading towards profitability. The WSJ is pay only and profitable. Salon is... well it just doesn't die ;-).

    But, you know what, I've put some bucks into political blogs I read to keep them moderately healthy. I'd hate to see them go and -- more importantly -- I'd pay a moderate fee if they went pay-per-view.

    The New Republic went mostly pay-per-view a couple months back. It gave me the little push I needed to subscribe to the deadtree version, which gives access to articles online.

    And I subscribe to ArsTech's forums, since I habitate there fairly often and I want to help keep that site alive.

    Finally, I work at a company that publishes $1,000/year newsletters via the internet. (Granted its PDF, not HTML) It content and people certainly pay, even if it isn't the general public.

    Yes, I'm ahead of the curve. I'm obviously willing to pay for pulp-based content as well, which many aren't even willing to do.

    For those stuck in 2001, believing you are the only one who "get's it" that the 90s were irrational exuberence and everything dotcom was dumb: Get off your high horse. Everyone knows, even those in business and things are improving. Profits are being squeezed out--even in the crappy economic times.

    The internet is just a different way to transmit information. There is nothing inherent about it that means people won't pay for entertainment and valuable information there.
  • by johnjay ( 230559 ) on Thursday August 07, 2003 @10:00AM (#6634394)
    There are two general types of content that could be on the web: highly specialized content, and rather generic content. The highly specialized content (wsj analysis, medical papers, etc.) can be sold on the internet because users know there's no other place to get it for free. For the generic content, there are tons of websites that are willing to provide free content just so they have visitors. As long as someone is willing to undersell on content, it will remain free.

    Free news sites are an understandable byproduct of this competition. Any news company could charge for access; after all, the information does take research and money to compile. But, since there are many news sites, and they're all competing for hits, they will continue to provide content for free as long as they can. Once you start charging, you'd better have a lot more to offer than just headlines and commentary.
  • by adzoox ( 615327 ) * on Thursday August 07, 2003 @10:04AM (#6634428) Journal
    An insightful set of posts popped up on /. a week ago about micro payments and the success or failure of them. This was the general direction I posted in this discussion, look at my post page for the full discussion:

    I regularly post to Slashdot. I am essentially a micro-content provider to Slashdot. I have posted over 300 comments, many of them high Karma scorers. If I made, say, one cent per Karma point, then I would be about 3 dollars better off by now! Woohoo!"

    Maybe a site like Slashdot could charge "micropayments" but rebate to it's users that have high moderation. This may have an effect on eliminating troll posts and encourage well thought out responses.

    I pride myself in the high moderation I get here & substantial page views/responses I get elsewhere. I mainly use this site & other Mac Chat/Forums sites as a way to "micro-advertise" my website & my eBay auctions. I figure, if people think I say something interesting I must be selling something interesting ;)

    Another take: If you actually sell something on eBay OR leave feedback for a transaction you are rebated or awarded a micropayment. This way, even eBay could CHARGE for content. Buy - you are deducted a micropayment - leave feedback - awarded/rebated a micropayment

  • by tmark ( 230091 ) on Thursday August 07, 2003 @10:04AM (#6634430)
    With /. being one of the largest content delivery systems on the net, I'd be curious to find out how much revenue they generate based upon subscribers alone.

    The dubious claim of /. being "one of the largest content delivery systems" aside, I don't think the testimonials of a few subscribers tells us very much about whether people in general are willing to subscribe to something or not. Someone is ALWAYS willing to do something, and this inevitability tells us nothing about the likely success of a given business practice catered to those people.

    Far more interesting and relevant questions are what proportion of /. (or Salon, or ...) readers actually subscribe ? What proportion of Mandrake downloads go to MandrakeClub members ? etc. It seems clear to me that here, anyways, subscribers constitute a very small proportion of readers which may well be inflated for a number of self-evident reasons (and the reader may have already noticed I do not subscribe). Does a subscription rate of .1%, .5%, 1% or 5% tell us more about people's willingness to pay, or about people's unwillingness to do the same ?
  • by HarveyBirdman ( 627248 ) on Thursday August 07, 2003 @10:12AM (#6634494) Journal
    There's just too much content these days. If someone goes to a pay model, there's always some alternative. I can't think of any content I frequent that I'd pay for (sorry Slashdot ;-)), but certain services are very useful.

    I've been using Yahoo BillPay for over a year now at $7 a month, and I'd never, EVER go back to writing checks and mailing bills. In fact, I visit a mailbox once every 3 months because I now handle all business and correspondence online. I still have all these old 34 cent stamps to which I have to add a sheaf of 1 cent stamps in order to mail anything.

    I also pay extra for Usenet access from a company that is dedicated to it. Gotta have those complete multi-part binaries, don't ya know. :) At least until the RIAA eventually goes there. :(

    And I pay a little extra for an email/web space combo.

    So I, personally, have no problem paying for services even thought I'm skeptical about paying for content. That's why I don't complain about advertising unless a page gives me more than one popup at a time. That's like two commercials playing at the same time on TV.

  • by Anonymous Coward on Thursday August 07, 2003 @10:21AM (#6634575)
    > We've been accustomed to free content and will tend to avoid payment whenever possible

    This doesn't sound good. The nice thing about the inrnet is that people also provide the content, unlike TV where there are a couple of big channels. Actually when I search for something on the internet I usually find it in free volunteer content (usent faqs, forums, list archives, user documents, collection of random texts, discussions, FAQs, hobist info, HOWTO, diaries, articles, etc).

    I myself have some data in my home page which somebody may fall into if searching google for specific terms. And they may be proved useful too.

    So why should I pay. It will break this nice scheme. Then the writer of a free document will say "wtf? why am I providing this for free while others make money".

    As for slashdot, its been said before: People don't come here to read the insighful comments of Michael or Jon Kaz. They come here for the comments: user supplied content.
  • I do pay (Score:3, Interesting)

    by nuggz ( 69912 ) on Thursday August 07, 2003 @10:27AM (#6634629) Homepage
    I do pay for some content.
    I have some subscriptions to some pay sites.
    But generally I don't because they overprice.
    I don't want several bill payments running through my credit card.

    Online subscriptions are too expensive, I only want to pay a few dollars a year. It should be easy and secure to pay. Automatically renewing subscriptions aren't ideal.

    It has to offer something better, and it should prove that it is better.
    Online prices should be cheaper then a comperable dead tree subscription, even if they offer additional services.

  • by sabinm ( 447146 ) on Thursday August 07, 2003 @10:27AM (#6634632) Homepage Journal
    Just not the content that most deliver. I can't stand sites that you pay for that give you a tiny screen with crappy compression or sound that cuts out every time you start dloading an iso.

    I think it funny that the big media providers can't play nice with the television makers and put built in decoders on TVs. Yeah I'd pay ten bucks extra to watch Star Wars on demand, yeah, I'd pay to play for decent content on video games. Nothing like Starwars Galxies where I have to pay 15/mo. just for the privledge of playing my game that I already purchased for 50.

    The problem is not that content is not available. THe problem is that the method of deliver is still sloppy and unprofessional or too expensive to maintain. It is STILL easier to go to BlockBuster and rent. It is STLL easier to put a lan party together, and often more fun. The only thing that was worthwhile, the radio broadcasters sucked the life out of (internet broadcasters). most of what you see these days (not all, mind you) are simply sites asking for money out of goodwill. While that might work for private, small and community-like ventures penny arcade [penny-arcade.com], that doesn't work for corporate America.

    TIMEWarner/AOL, NYT, Bloomberg, I will pay for content! Make it as easy as the TV, but make it better quality, and you'll make a fortune. People my age don't watch TV anymore. The net is my TV.
  • by Nurgled ( 63197 ) on Thursday August 07, 2003 @10:32AM (#6634681)

    The first thing that needs to be done is to get micropayments sorted out once and for all. Noone wants to pay a monthly subscription, they want to pay for what they actually use, and they'll probably not know their usage ahead of time. Of course, there's nothing to stop sites still offering cheaper subscription services for those who like that sort of thing.

    However, what will really make this work is to find some way to centralize this so that a person only has to pay a single organisation and will get some kind of bill, just like with the telephone system.

    The ultimate solution would be to somehow tie it into ISPs, so that the ISP is charged for the micropayments and then passes this cost onto the customer as part of their service. ISPs could bundle a certain amount of "free" service charges with their monthly fee and charge users for anything they use in excess of that, of course giving the customer some way to monitor their expenditure.

    People are paying their ISPs already, so they'll probably be less unhappy to pay them a little extra especially if they get some free credit to try before they buy. The problem is setting up the infra-structure for this. It would involve some kind of organisation which runs the system and then have sites which want to make use of it tie into them to charge the micropayments to the ISP or the user directly depending on how the user is subscribed. The user could then get a monthly statement and be able to query anything they don't agree with just like they can with a credit card statement.

    This is likely to never happen, since it requires too much cooperation. If it was to happen in any form we'd end up with lots of different micropayment providers all of which are supported by different sites, so everyone would have to have an account with all of them. I can dream, though! :)

  • by JaredOfEuropa ( 526365 ) on Thursday August 07, 2003 @10:33AM (#6634694) Journal
    As a /. subscriber I guess I'm proof positive they will pay. Not only do people need to feel that they are actually getting something for the money they're paying, the price also has to be right.


    The success of paying for content depends for a large part on the payment method (and the ability to profitably collect very small payments), the type of content offered, the type of visitors your site gets, and the easy of payment.

    Payment method: If you're charging visitors on a pay-per-view basis, you probably need a way to collect very small payments and still make a profit after deducting transaction costs. If such a system never comes into being, you will not be able to make one-time-only sales of very cheap pieces of content (like $0,10). See also the next two points...

    Type of content, and Type of visitor: Sites with regular customers, like Slashdot, stand a good chance of making money off premium content. I come here every day for my dose of Stuff that Matters, and I might well pay a monthly fee for the privilege.
    However... the other day I was looking for info on some Greek legend, and I found a site that had the info that I needed. They required me to subscribe, though. I'll pay $10 a month (or whatever) for Slashdot, but not for access to one single article that I happened to have a need for. If they had offered micropayment, say $1, for the article, I would have paid, but subscribing was the only option, and they lost a sale. One-off sales will generally require micropayments, and as yet no such system exists. If your content is more expensive, for example $10,- for a program for your PDA, you can make one-off sales profitably through existing payment methods (and there are sites that already do this).

    Ease of Payment. In some cases, the payment system should be very easy to use. For one-off payments this is generally not an issue, and for subscription payments it is often automated.
    A question: would you pay $0,05 per Google search? I would, but not if I had to log into some payment system every time I googled, going through the login page and then a confirmation page. For this type of payments, you'll want a separate application or even a function built into the OS: A Google search should simply pop up a message 'you're about to use a service for which you'll be charged $0,05. Proceed? Y/N'. If making the payment for a search or similar service requires too much effort, people will look to other service providers.

    In conclusion, not only does the price have to be right, but the price should also reflect the frequency and granularity with which each individual user might access your content. Also, the method of payment/collection has to take into account the (potentially very small) value of the purchase. The number of operations/clicks required of the user to make the actual payment should fit the kind of content or service he is purchasing.

    A lot will depend on the development of an easy-to-use micropayments system. When such a system becomes more widespread, I suspect that many sites that are now free (especially sites which have content that does not fit the subscription model) will start charging for their content.
  • by jbottero ( 585319 ) on Thursday August 07, 2003 @10:35AM (#6634717)
    You're missing his point (I think). The content here *is not* subscriber supported. The amout that /. takes in from subscribers vs M$ et al. has to be a drop in the bucket. If slash got rid of ads, they would probibly fold. The point is, you can't float a dot com on subscribers alone.

    Take newspapers: the price of the paper to the consumer is trivial. Many papers don't even charge any more. They are supported by ad money.

    On a different note, doesn't it seem like the Microsoft bunch and hangers-on spend A LOT more ad money here than Open Source?
  • Re:No, we will not (Score:5, Interesting)

    by arkane1234 ( 457605 ) on Thursday August 07, 2003 @10:45AM (#6634829) Journal
    We are exceedingly cheap.

    I much prefer the term "working class".

    We can't grasp the concept of monetary value for digital things. We can't wrap our brains around the idea that those digital things took work to create, and people that made them want to be paid for them.

    Oh, we can grasp it with our tiny little minds just fine, thanks for playing. We just don't like it. There's a very big difference between not comprehending it, and not liking it.

    I for one have issues with it simply because the value is just not there. Obviously if I personally paid a small amount for all of the little things that I use on the net, I'd be dead broke. It's called nickel-and-diming you to death... and quite honestly I'm already being nickel-and-dimed to death with everything else.

    Sure, you say that $10 is a single days dinner. Well, I'm sure it is. $700 is someones single days dinner somewhere, too! To be quite honest, most of things I use just aren't worth the hassle of not eating for a day. What ever happened to the old days *before the dot-com era* where people did things on the net because they thought it was (awesome | fun | informative | gave something back to the community | the-next-best-thing-since-sliced-bread)? That's how Linux was started.

    To be quite honest, I personally think that if you rely entirely on the web for your existence, your making a huge mistake. Unless you have a niche market, or your just damned good at what you do.

    If MS ever started selling Office exclusively as a download, they'd lose millions of dollars. Because Office just wouldn't feel like a real product to them. Put a CD in that consumers hand, though, and they're more willing to pay for it.


    How many individuals honestly go out and buy MSOffice on CD without a life-or-death emergency pushing them? The majority of the market usually ends up getting it with their system, prepackaged. Most think it's just a part of Windows.... I've known quite a few people that found out that they need MS-Office for some reason like college, and they didn't have it. (neophytes mostly, not people like you and I who are seasoned in "computers") The majority of them went to the store and nearly jumped out of their skin when they saw the price. Most of them, because of the necessity of it in order to continue with their tasks, purchased it through other means such as the college bookstore. (far cheaper because of a student discount) But, the honest to god truth is that unless faced with an emergency like not being able to do your college schoolwork without it, you just don't need it if it isn't available on your computer already. So, the media in which it's distributed quite honestly would only affect IT personnel who would then need to burn it to a CD for safe-keeping before including it into the standard Ghost image :)

  • by cmplus ( 681254 ) on Thursday August 07, 2003 @10:49AM (#6634869)
    Would Borders be half as successful as a bookseller if it charged its customers just to enter its stores?

    I frequent their stores because they generally have good technical material which I read while drinking sub-par coffee made by overinked and overpierced baristas.

    Of ten books I review I might purchase one. In reality, my coffee purchases pay their rent.
  • by yintercept ( 517362 ) on Thursday August 07, 2003 @11:00AM (#6634983) Homepage Journal
    Sorry, but it costs to create content. Even worse, it costs to deliver content (bandwidth, etc.).

    Most the people I know who've delivered quality content on the net rue their decision. Blogs [blogspot.com] aren't quality content.

    Then there are the tons of reeders who put up put up pourly edited posts, and think, gosh look at this wonderful content I just contributed. I should get all that expensive, extremely time consuming work other people did for free. I don't buy the argument that you can measure the quality of content buy the volume of werds.

    The way I see it. My participation in ./ isn't as a "contributor." I am a consumer of their product. I am consuming ./'s bits and bandwidth as I type. Most of all, I am consuming the large audience that slashdot as build up over the years for my little egotistical jaunts into cyberspace.

    The act of my typing out my pourly conceived and incomplete thoughts is an act of consumption. It is a tasty little ego trip I go through. Now lets wait and see if I get mod points...delicious little mod points.
  • by sinjayde ( 661825 ) on Thursday August 07, 2003 @11:08AM (#6635044)
    I have had 2 successful dealing with making money on the internet.

    The first was with my ex-employer [myinternet.com.au]. They provided online mail, administration tools and a portal page to schools across Australia, New Zealand, UK and Hong Kong. They also acted as a service provider for several hundred schools in Victoria, Australia.

    They were able to make money because of a couple of key reasons. Firstly, schools have to be held far more accountable than the average home user. If a home user uses a product illegally, usually not too much is done. If a school does this, the Principal has the right to fire the IT manager (or whoever is in charge of software/hardware management), and most guys prefer not to lose their jobs over something like that.

    Another key was that they kept all of the software online on their own (or leased) hardware. This meant that software was never installed on clients computers, making it easier to track who was on the system, how much they were using etc. This is a sucessful business with around 50 employees.

    I also run my own webpage [calaisturbo.com] and message board [ozperformance.net] which has around 100 paid members and 2 major sponsors at the moment. Membership costs $10. I consider this quite successful as I originally never wrote the site to make money. I also ran the site without Members for 2 1/2 years before we started accumulating Members. There were several keys to this. The first was having the right website and code development to handle what we wanted. Some of the big sites spend a LOT of money getting this to work, the first problem.

    Once we had that, due to a very good standing with readers, most people were more than happy to pay $10 for the year to help support the website. It didn't matter to them that they could get the same information for free anyway, they just wanted to support the site and be considered official members. This has helped me to upgrade the site further (trophies for event days, upgrade the message board to vBulletin [vbulletin.com] (coming real soon) and several other benefits.

    The key is providing something that my readers want at a fair price, trying to look after their wants, and providing them with useful information. I also have a couple of sponsors but this discussion isn't about that.

    Cheers
  • Re:Neat idea, but... (Score:3, Interesting)

    by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Thursday August 07, 2003 @11:25AM (#6635228) Homepage Journal
    People don't want to pay for static content on the internet because it is inferior to static content in a magazine in every way other than permanency (if you are allowed to store it and view it on multiple devices - at worst there's always PDF) and searchability. Of course most articles are broken up into pages (more ad impressions) and the site has no search engine or, as is more common today, an amazingly crappy search engine. The big problem there is that many sites today are a mishmash of static and dynamic pages.

    Anyway I won't go into all the ways a magazine is better than a webpad or god forbid a PDA browsing an online version, what a tired rehash that would be. But my point is, if you want to bring people in, you have to offer them something they can't get more conveniently by buying the magazine from a newsstand, bookstore, or supermarket. Generally speaking this takes the form of interactive and/or multimedia content. This is an inexpensive way to add multimedia to magazines. Flash gizmos and video clips can make people feel like they're actually getting something they couldn't have gotten elsewhere, and you could plug the videos in the print version and offer purchasers of the magazine accesss to the online version for a reduced price, or perhaps just to the online extras.

  • by Lord_Dweomer ( 648696 ) on Thursday August 07, 2003 @11:27AM (#6635247) Homepage
    The problem with making content digital is that it DESTROYS the inherent scarcity of it. Sure you can try to introduce artificial scarcity (RIAA?), but due to its digital nature, it will find a away to avoid that. I'm sorry, but once content turns digital, its value drops considerably. Companies can't have their cake and eat it too.

    Now, I should mention that when I speak of content, I'm speaking of things like music, movies, text, etc. Those things lose most, if not all, of their value once they become digital and reach the internet. So what can be sold?

    Experiences. Slashdot is an experience, live broadcasts (think pay-per-view) are experiences, chats with famous people are experiences, etc, etc, etc.

    Certain types of things DO have value on the internet, just not all of them. What is currently going on right now as the internet comes of age is that people are experimenting with it to see what sells and what doesn't. Not everything is guaranteed to sell, in fact, you may ruin your chance of selling a physical version of it as well if you unsuccessfully try to sell something on the net (RIAA again). Its a big gamble, and there will be lots of casualties, but eventually we will learn what can and cannot be sold on the internet.

    A good example of how this works is in Snowcrash. Hiro does a search for something with the librarian, and filters for free content only. Yet when he needs something rare or specific, he has to pay for it. In fact, a whole profession (gargoyles) has sprung up around this business of rare/hard to obtain/unique information. Well, just my two (or fifty) cents worth.

  • by nurb432 ( 527695 ) on Thursday August 07, 2003 @11:56AM (#6635530) Homepage Journal
    Via my monthly bill.

    Just like my cable TV, I pay a monthly fee for content.. I also have to pay for my equipment, my electricity usage...

    Getting unwanted advertisements on top of that is offensive. ( not to mention the Spam ). So is the suggestion that I have might to pay MORE for the crap that I'm already getting hit with that i dont want.

    Don't tell me I only pay an 'access' fee.. as I don't want to hear it. I pay. Period. If they cant make a profit in that business model, then they don't need to be in business.

    I remember when cable was touted as 'commercial free'.. because I was paying for it.. that didn't last long... bastards....
  • What You Get For $5 (Score:1, Interesting)

    by Anonymous Coward on Thursday August 07, 2003 @12:01PM (#6635588)
    • Content form a wide variety of high quality magazines (duh) Archives of these magazines go back more than 10 years.
    • Keyword and More Like This style searching
    • Ability to store articles of interest. You can even annotate the articles and your notes are kept as well.
    • Personalized suggested articles.
    • Browsing by topic, magazine, etc.
    • Manage print subscriptions online in one place
    • No ads. No pop-ups. No flash.

    What I think they really need...
    • Community! You should be able to rate/review articles and read other people's ratings/reviews. Message boards might be interesting too
    • Better selection. Music, games, tech mags.
    • I like the annotation thing, it would be cool if they had a highlighter
    • Mobile device support
  • by King_TJ ( 85913 ) on Thursday August 07, 2003 @12:15PM (#6635716) Journal
    Honestly, what I've seen is quite a bit of mentality of "even though this site asks me to subscribe, it works good enough for me without paying - and they're obviously profiting off enough other people to keep it viable anyway".

    (I'm very much guilty of this attitude myself.)

    It seems to me, especially with web sites offering really "niche" information, they do better by offering everything free - but occasionally begging for donations. Giving people the "sob story" of "We can't afford to keep paying for our bandwidth unless we raise at least X by next month." seems to get regular users to fork over some cash. (Even better if it's made as easy as clicking a "Pay me now with PayPal!" type of button on the main page.)

    The trick is, do it like a traditional fund raiser. Show the users regular, real-time updates of the total amount earned, and the goal you're trying to reach. People are much more likely to pay if they can actually see their contribution push a number closer to a target.
  • by KalvinB ( 205500 ) on Thursday August 07, 2003 @12:18PM (#6635745) Homepage
    As proven time and time again. I implemented a subscription service at IcarusIndie.com for high bandwidth areas of the site in January and have made a nice amount of money. I'm not getting rich off of it but it's enough to know it's a feasible idea. My site isn't large enough yet (and doesn't have a fast enough connection) to expect a large number of subscribers.

    The problem is just like any other business, most people just slap up a site, throw some crap on it and expect people to pay. My site was entirely free for as long as my connection could take it. Which was 2 years. I then went through my log summaries, figured out what was taking up the most bandwidth and put it behind htaccess and now sell accounts to access those files.

    Another thing is that you can't lock everything down. Otherwise people aren't going to be finding your site. I made sure to leave a bunch of good stuff freely available even though it takes quite a bit of bandwidth. The site is also diverse in it's content to attract people for quite a number of reasons.

    The other thing is that most businesses fail. It's not surprising that there are a few big money makers and a lot of no money makers. Setting up a business anywhere takes talent and a product people will pay for. Most people don't have either.

    Ben
  • by janeil ( 548335 ) on Thursday August 07, 2003 @03:58PM (#6638508)
    I mod this insightful! Well, anyway, would if I could. Mr. Garcia subscribes in the same way many of us (that is, about 1 out of 10 listeners/watchers) subscribe to public radio and tv. (blurb: WYSO 91.3 Yellow Springs, OH) That is, as an honest trade of value for value received, almost a gesture of respect. This is the behavior of a civilized human, and therefore rare and unusual.

    On the other hand, I (and others) also pay a ridiculous amount of $$ for cable tv and a zippy fast internet connection, surely luxuries not often used in a way that would justify their cost, at least for me. I now pay, what, about $1.85 per day for cable TV? Goofy.

    So I say it's really hard to say how/if people will pay for content. I haven't paid any extra yet beyond my earthlink account, and would probably resist. There's just too much out there for free, and I don't see how the free content can really fall off in quantity at this point. (side thought: Is anyone out there contemplating the permanence, or persistence of internet content? That is, pages created 3-5 years ago and abandoned are still on available servers, etc.? Isn't it all sort of an interesting possibility of an eternal archive? The all-time library of Alexandria?)

    I would, however, leap at the chance to use micro-payments for cable tv or internet content. I'm thinking of perhaps some small initial set-up fee, then charges in the realm of fractions of a cent per minute, or something. I'm sure I come in on the low end of usage so should pay less than I do now. Of course, then I'd have to give more to public radio.

He has not acquired a fortune; the fortune has acquired him. -- Bion

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