Re:WSJ Ends Google Users' Free Ride, Then Fades in Search Re...
by EGreg on Tuesday June 06, 2017 @10:05AM
(#14497275)
You hit upon the main difference between the digital economy and the real world economy. People keep trying to equate the two.
Google itself is fueled by online ad revenue. Facebook has ads too, and it's trying to explore every angle (video, etc.) to get people to click.
Both companies know about your likes and interests when you are logged in (Facebook because you declared them, Google because of your past searches) and those of your friends (GMail contacts and GPlus / Hangouts connections in Google's case).
Facebook is more blatant about trying to monetize the ads and still do worse, because people use Google for search, and that's when their intent lines up with actually buying.
Thing is, ads are a commodity in a race to the bottom. You can see every company struggling with this, not just Wall Street Journal but Google. They keep going down. They try new things. Then the ad revenues drop again.
In the real world, you buy a product or a service and you pay for it. This doesn't go down nearly as much in price (although automation and outsourcing may make some impact on wages to locals). If you get paid a commission PER SALE, you've got a sustainable business.
David Heinemeier Hansson constantly talks for years about how you should be building $AAS and charging for it, instead of making everything free and slapping ads on it.
Another acquaintance of mine, Albert Wenger from USV has a whole book about how digital goods are essentially free to perfectly copy, leading to a post-scarcity world in digital goods, with only artificial constraints such as copyright enforcement propping up their price. He has a book out called worldaftercapital.com where he describes humanity's progression from the hunter gatherer societies through today, and explores what the economy will look like later.
So, if you're in the business of creating content, you're now competing in a GLOBAL market. WSJ and other publishers got to enjoy the distribution of their newspapers for decades with copyright protections, as did the music industry. But at the end of the day, when the means of copying information make it cheap to free, you've got to figure out other business models. The freemium one is a good trade-off. But really, why would I pay for WSJ after my free 3 articles a month are up? When there are so many other outlets reporting the same things? Because I like or want to support the WSJ specifically. Their brand. I did pay for a NYT subscription after all.
You know what I really value far more than WSJ and NYT? Wikipedia.
And how much does it cost to run it? Not much (aside from hosting) because people collectively build on each other's work and editors check new contributions to achieve a result that is quite good. People cooperate more than they compete, because the rules of the game are such.
I see such things as being superior to capitalist competition. Look at open source (Linux, Firefox) vs closed source (Windows, IE). The former runs on toasters, the latter doesn't and still over time is less stable. The former overtakes it in quality.
Why not as a society embrace WikiNews and other such sites? Why do we even need the old model of journalism? Because it will appeal to certain niches, just like newspapers used to circulate to small communities and not sold all over the world the next day. Now they'll be sold all over the world but their readership will shrink.
The information economy is and has always been. different. Digital ads for digital websites are far different than commission sales of real world items. 3D printing may one day bring the two worlds closer in some areas, but we are still all a long way away from that.
Google itself is fueled by online ad revenue. Facebook has ads too, and it's trying to explore every angle (video, etc.) to get people to click.
Both companies know about your likes and interests when you are logged in (Facebook because you declared them, Google because of your past searches) and those of your friends (GMail contacts and GPlus / Hangouts connections in Google's case).
Facebook is more blatant about trying to monetize the ads and still do worse, because people use Google for search, and that's when their intent lines up with actually buying.
Thing is, ads are a commodity in a race to the bottom. You can see every company struggling with this, not just Wall Street Journal but Google. They keep going down. They try new things. Then the ad revenues drop again.
In the real world, you buy a product or a service and you pay for it. This doesn't go down nearly as much in price (although automation and outsourcing may make some impact on wages to locals). If you get paid a commission PER SALE, you've got a sustainable business.
David Heinemeier Hansson constantly talks for years about how you should be building $AAS and charging for it, instead of making everything free and slapping ads on it.
Another acquaintance of mine, Albert Wenger from USV has a whole book about how digital goods are essentially free to perfectly copy, leading to a post-scarcity world in digital goods, with only artificial constraints such as copyright enforcement propping up their price. He has a book out called worldaftercapital.com where he describes humanity's progression from the hunter gatherer societies through today, and explores what the economy will look like later.
So, if you're in the business of creating content, you're now competing in a GLOBAL market. WSJ and other publishers got to enjoy the distribution of their newspapers for decades with copyright protections, as did the music industry. But at the end of the day, when the means of copying information make it cheap to free, you've got to figure out other business models. The freemium one is a good trade-off. But really, why would I pay for WSJ after my free 3 articles a month are up? When there are so many other outlets reporting the same things? Because I like or want to support the WSJ specifically. Their brand. I did pay for a NYT subscription after all.
You know what I really value far more than WSJ and NYT? Wikipedia.
And how much does it cost to run it? Not much (aside from hosting) because people collectively build on each other's work and editors check new contributions to achieve a result that is quite good. People cooperate more than they compete, because the rules of the game are such.
I see such things as being superior to capitalist competition. Look at open source (Linux, Firefox) vs closed source (Windows, IE). The former runs on toasters, the latter doesn't and still over time is less stable. The former overtakes it in quality.
Why not as a society embrace WikiNews and other such sites? Why do we even need the old model of journalism? Because it will appeal to certain niches, just like newspapers used to circulate to small communities and not sold all over the world the next day. Now they'll be sold all over the world but their readership will shrink.
The information economy is and has always been. different. Digital ads for digital websites are far different than commission sales of real world items. 3D printing may one day bring the two worlds closer in some areas, but we are still all a long way away from that.