Micropayments and free content vs. bandwidth

Fame vs Fortune: Micropayments and Free Content explains why the author thinks micropayments will fail. I think he's absolutely right. He makes the point that readers have to make mental calculations about whether or not something is worth 10 cents or whatever, and that as the cost goes down, the calculations are harder to make. My own experience bears that out, and I think most on-line content will remain free for now because of it.

However, content may be free to the reader, but it isn't to the provider, and the provider's expenses grow with the popularity of their content. This web site currently costs me more than $100.00 a month to run, and I will probably have to increase that to $300 to $400 soon as the lower priced version runs out of horsepower. Most providers have turned to advertising as a way to recoup their expenses, and that is a form of micropayment, albeit one that involves no direct mental calculations by the consumer.

That's not important though. Advertising carries the burden here, and probably will continue to. What actually worries me is the untold story behind this part:

The soft-drink market is not perfect, but the Web comes awfully close: If InstaPundit and Samizdata are both equally easy to get to, the relative traffic to the sites will always match audience preference. But were InstaPundit to become less easy to get to, Samizdata would become a more palatable substitute. Any barrier erodes the user's preferences, and raises their willingness to substitute one thing for another.

What can make content "harder to get to'? Bandwidth allocation. Right now most packets travel on a fairly equal footing, so seeing my site or MSN.com is equally "easy": the users don't wait any noticeable amount of time for whatever they are looking for or at.

But that doesn't have to remain so. MSN's packets could be given tremendous priority compared to the little guys, and in a really sinister scenario, the little folks packets could actually be artificially delayed even when there was available bandwidth. Don't think for a moment that MSN, the NY Times and other large content providers wouldn't sign up for that if they could, and that would push down the "value" of smaller free sites. Push it down enough, and the big guys can go right back to charging for content again, because all other content will just be too painful to experience. So "free" content would become something from the good old days; something our grand-children would marvel at.

On a more sinister level, there's a political element here too. The large media is already more and more owned by conservatives. Not all are of the radical right, and (Fox news aside), I think we still get fairly even news coverage, but it is a trend that bears watching. But as long as I hear Fox and others complaining that liberals dominate the press, I don't worry too much about that. Right now there is plenty of out of the main stream news and commentary available on the Web, too, and I think that more than offsets any conservative bias that might otherwise be seen in other media outlets.

Bandwidth control could be used to change that, too. The liberal loonies (that's me, or would be if I wrote about politics) and the really extreme conservatives could be choked down to a whisper. Their rantings (or concerned voices, your choice) might still be picked up by Google for a while, but when you clicked on the link, you'd wait.. and wait.. and most of us would move on to bland but snappy MSN whose packets rush to our machines in joyful, unimpeded glee. As less and less of us visited the small sites, they'd become less important to Google and other search engines, and would slowly drop down into the results pages nobody ever actually looks at. Eventually they'd disappear forever (and for some, at the far extremes of the left or right, their loss wouldn't be such a bad thing). That would put the web in the same place as newspapers, magazines and the broadcast media are now: yeah, you CAN publish a horrible little copy machine newspaper or rant and rave in a public access spot, but it won't get you far.

I hope none of this comes to be, but I fear it just might.

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Sun Dec 16 23:11:26 2007:   TonyLawrence


The battle still rages today, but it looks like the "control" folks are winning.. not good for the Internet as we know it..



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