...a blog by Richard Flowers

Friday, March 26, 2010

Day 3372: A REAL Digital Economy: My New Business Model for the Internet


It looks like the Times have already lost one reader, thanks to the announcement by Mr Roger Stavro Moredick that from June he'll be charging a pound a peep to look at his august organ.

Liberal Democrat Voice asks how the blogosphere will react, and I'm guessing: "goodbye and good riddance!" If the reactionary old digger WANTS to seal-off his mendacious, meretricious, propaganda rags in self-imposed exile from the rest of the web that's GOOD NEWS isn't it?

But if EVERYONE does that, then the Web Party is OVER!

So here's an idea that might be A BIT BETTER!

First, I have to ask: isn't there a way to run a news/media empire on the web AND make money?

From the Evil Empire's point of view, their news gathering organisation isn't getting any cheaper, but as the readership moves from print to online they get less advertising revenue per reader and NO sale revenue per reader, so it's lose-lose; charging for the online edition may see a big loss of readers (advertising revenue goes down further) but no one expects their readership to fall to NOTHING, so they get a new revenue stream.

From everybody else's point of view, the BBC, Gruaniad and Tell-lie-graph and the rest will all still be free-at-the-point-of-use, so what's the problem?

Well the "problem" is threefold: firstly how much do you WANT people to be putting things up on the net? This goes to the heart of the issue, not just news and comment but also music and movies and piracy.

I'm not saying that it should be a licence to print money, but producing content – gathering news, recording an album, filming Dr Woo's adventure – all costs money. Even hosting an online diary like mine has costs associated, which at the moment are picked up by Google (thanks you very much) but what if that doesn't last forever? Realistically NO ONE is going to just pour money down the drain merely for the dubious social benefit of, say, letting you read the "wisdom" of Mr Danny Finkenstein.

Secondly, and slightly more ABSTRACT, the Internet THRIVES on inter-connectivity. It's not called the Wibbly Wobbly Web for nothing! And anything that reduces that inter-connectedness reduces the Internet as a whole, reduces, however slightly, the amount of bouncing backwards-and-forwards of ideas. Think of it like this: would YOU like someone to cut off a chunk of your BRAIN?

And thirdly, if Mr Moredick actually makes a go of it, then it will quickly encourage other media providers to go down the same route, turning the WEB into a series of barely-connected ISLANDS.

Let's be honest, all Mr Moredick is concerned about it the MONEY. He's not making a news website for the good of personkind; he's not doing it as a result of peer pressure – actually there's a good chance that he WAS, but because he doesn't feel the peer-pressure is why he feels he can change the game. He's doing it because he thinks it will return more lucre than it costs.

The profits from newspapers have gone DOWN.

That's not JUST the fault of the Internet. Circulation has been declining for AGES, ever since television really, and there's just been a massive recession which has cut both the numbers of people buying papers (an obvious cheap thing to cut out) and the numbers of people advertising in newspapers (an obvious cheap thing to cut out).

Not that it's impossible to make money from newsprint as the rise of the Free Sheets like the Metro and now the London Evening Standard have shown. Though of course Free Sheets too cut into the circulation of the paid-for press.

BUT, if the profit goes down, Mr Moredick looks for a way to squeeze more out of it.

Let me just interject with one important point: "making money" ISN'T a DIRTY WORD. It isn't even TWO dirty words.

Liberals have LONG believed in TRADE, in people being able to benefit from their gifts and talents, bettering themselves by being able to exchange their abilities for then things that they need.

There's a bit of a habit of thinking of the Internet as a new SOCIALIST UTOPIA, where everything is available to everybody all the time for nothing. (Apart from the RUDE SITES!)

It's been said that "people are used to everything on the Internet being free". But this of course is NONSENSE.

People DO pay for the Internet, but they pay for it as a SUBSCRIPTION, whether it's handing over a monthly fee to their ISP or an hourly rate to their Internet Café. It's like a magnificent magazine, with infinite pages. Once you've paid up front, you expect to be able to flip though to whatever articles you like.

So the solution is so obvious I can't believe that no one has come up with it: your media providers should absorb your Internet providers.

People would take out a subscription for Timesonline (or BBConline or Grauniadonline or Virginonline etc…) and that would provide you with your access to the Internet. You would automatically get all the content of the Times website or the BBC website or whichever website you subscribed to.

And then here's the clever bit.

The service providers charge each other for all the people who visit.

You ascribe an agreed "micropayment" value to a webvisit and then the providers can sort it out between themselves – like the bank clearing system – who gets what cash at the end of the month.

So, suppose you subscribe with the BBC, say, and you click through to the Times's website, the Times keeps count of your page views and those of every other BBC subscriber (and every ITV subscriber or Virgin subscriber or Hackney Community Cable subscriber), and at the end of the month they add it all up and say to the BBC: we've had X-million visits from your subscribers, that's X-million micropayments that amounts to Y-million pounds please. (And in return, the BBC says, yes and we have had A-million visits from YOUR subscribers so that's B-million quid back to us; let's settle the difference.)

(From a data protection point of view, I'd just add that it would be best for a system that "counts them at the gate" – putting toll booths on the Information Superhighway as it were – rather than one that records every website and page that you visit. Just like Google and Microserf absolutely don't do.)

The HUGE advantage, as I see it, is that this places the REWARD on providing CONTENT rather than merely ACCESS. This wouldn't just promote more online content from existing providers, it would encourage webhosting – if you provide a free platform for, say, bloggers then the more bloggers you support, the more visits you get, the more subscription income you receive.

You could even think about having a system where the provider REIMBURSES money to the subscriber if they provide some content that generates a lot of click through.

In the LONGER term, once you HAVE a system like this in place, you can see how it could provide the beginnings of a way of rewarding artists directly for the exploitation of their online works, bypassing the NEED for music piracy. And the best possible outcome could see it as a replacement funding stream for even the BBC, if we can figure out the right micropayment rates to keep up the quality.

Could it work? I don’t know; I'm just a stuffed elephant – perhaps better netheads than MY fluffy one can tell.


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