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[description], Story, any other text you want to use. Content Ever be Profitable? by: Sam Vaknin, Ph.D.
THE CURRENT WORRIES 1. Content Suppliers The Ethos of Free Content Content Suppliers is the underprivileged sector of the Internet. They all lose money (even sites which offer basic, standardized goods - books, CDs), with the exception of sites profering sex or tourism. No user seems to be grateful for the effort and resources invested in creating and distributing content. The recent breakdown of traditional roles (between publisher and author, record company and singer, etc.) and the direct access the creative artist is gaining to its paying public may change this attitude of ingratitude but hitherto there are scarce signs of that. Moreover, it is either quality of presentation (which only a publisher can afford) or ownership and (often shoddy) dissemination of content by the author. A really qualitative, fully commerce enabled site costs up to 5,000,000 USD, excluding site maintenance and customer and visitor services. Despite these heavy outlays, site designers are constantly criticized for lack of creativity or for too much creativity. More and more is asked of content purveyors and creators. They are exploited by intermediaries, hitch hiker sand other parasites. This is all an off-shoot of the ethos of the Internet as a free content area. Most of the users like to surf (browse, visit sites) the net without reason or goal in mind. This makes it difficult to apply to the web traditional marketing techniques. What is the meaning of "targeted audiences" or "market shares" in this context? If a surfer visits sites which deal with aberrant sex and nuclear physics in the same session - what to make of it? Moreover, the public and legislative backlash against the gathering of surfer's data by Internet ad agencies and other web sites - has led to growing ignorance regarding the profile of Internet users, their demography, habits, preferences and dislikes. "Free" is a key word on the Internet: it used to belong to the US Government and to a bunch of universities. Users like information, with emphasis on news and data about new products. But they do not like to shop on the net - yet. Only 38% of all surfers made a purchase during 1998. It would seem that users will not pay for content unless it is unavailable elsewhere or qualitatively rare or made rare. One way to "rarefy" content is to review and rate it. 2. Quality-Rated Content There is a long term trend of clutter-breaking website-rating and critique. It may have a limited influence on the consumption decisions of some users and on their willingness to pay for content. Browsers already sport "What's New" and "What's Hot" buttons. Most Search Engines and directories recommend specific sites. But users are still cautious. Studies discovered that nouser, no matter how heavy, has consistently re-visited more than 200 sites, a minuscule number. Some recommendation services often produce random - at times, wrong - selections for their users. There are also concerns regarding privacy issues. The backlash against Amazon's "readers circles" is an example. Web Critics, who work today mainly for the printed press, publish their wares on the net and collaborate with intelligent software which hyperlinks to web sites, recommends them and refers users to them. Some web critics (guides) became identified with specific applications - really, expert systems -which incorporate their knowledge and experience. Most volunteer-based directories (such as the "Open Directory" and the late "Go" directory) work this way. The flip side of the coin of content consumption is investment in content creation, marketing, distribution and maintenance. 3. The Money Where is the capital needed to finance content likely to come from? Again, there are two schools: According to the first, sites will be financed through advertising - and so will search engines and other applications accessed by users. Certain ASPs (Application Service Providers which rent out access to application software which resides on their servers) are considering this model. The recent collapse in online advertising rates and click-through rates raised serious doubts regarding the validity and viability of this model. Marketing gurus, such as Seth Godin went as far as declaring "interruption marketing" (=ads and banners) dead. The second approach is simpler and allows for the existence of non-commercial content. It proposes to collect negligible sums (cents or fractions of cents) from every user for every visit ("micro-payments"). These accumulated cents will enable the site-owners to update and to maintain them and encourage entrepreneurs to develop new content and invest in it. Certain content aggregators (especially of digital textbooks) have adopted this model (Questia, Fathom). The adherents of the first school point to the 5 million USD invested in advertising during 1995 and to the 60 million or so invested during 1996. Its opponents point exactly at the same numbers: ridiculously small when contrasted with more conventional advertising modes. The potential of advertising on the net is limited to 1.5 billion USD annually in 1998, thundered the pessimists. The actual figure was double the prediction but still woefully small and inadequate to support the internet's content development. Compare these figures to the sale of Internet software (4 billion), Internet hardware (3 billion), Internet access provision (4.2 billion in 1995 alone!). Even if online advertising were to be restored to its erstwhile glory days, other bottlenecks remain. Advertising encourages the consumer to interact and to initiate the delivery of a product to him. This - the delivery phase - is a slow and enervating epilogue to the exciting affair of ordering online. Too many consumers still complain of late delivery of the wrong or defective products. The solution may lie in the integration of advertising and content. The late Pointcast, for instance, integrated advertising into its news broadcasts, continuously streamed to the user's screen, even when inactive (it had an active screen saver and ticker in a "push technology"). Downloading of digital music, video and text (e-books) leads to the immediate gratification of consumers and increases the efficacy of advertising. Whatever the case may be, a uniform, agreed upon system of rating as a basis for charging advertisers, is sorely needed. There is also the question of what does the advertiser pay for? The rates of many advertisers (Procter and Gamble, for instance) are based not on the number of hits or impressions (=entries, visits to a site). - but on the number of the times that their advertisement was hit (page views), or clicked through. Finally, there is the paid subscription model - a flop to judge by the experience of the meagre number of sites of venerable and leading newspapers that are on a subscription basis. Dow Jones (Wall Street Journal) and The Economist. Only two. All this is not very promising. But one should never forget that the Internet is probably the closest thing we have to an efficient market. As consumers refuse to pay for content, investment will dry up and content will become scarce (through closures of web sites). As scarcity sets in, consumer may reconsider. Your article deals with the future of the Internet as a medium. Will it be able to support its content creation and distribution operations economically? If the Internet is a budding medium - then we should derive great benefit from a study of the history of its predecessors. The Future History of the Internet as a Medium The internet is simply the latest in a series of networks which revolutionized our lives. A century before the internet, the telegraph, the railways, the radio and the telepho cable tv channel
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