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The Internet’s “Free” Problem


Findings from the 2010 Digital Future Project released this month:

  • 49% of Internet users have tried free micro-blogging services like Twitter
  • 0% of them would be willing to pay for it.

That’s zero (Z-E-R-O) percent.  As in nobody.

Pay up, sister!

As Jeffrey I. Cole, director of the Center for the Digital Future, noted:

“Such an extreme finding that produced a zero response underscores the difficulty of getting Internet users to pay for anything that they already receive for free.”

I’d say that that’s an understatement.

Internet users have an extreme disconnect when it comes to the Web.  Most people have no problem with buying products and services offline.  If we go to Target and buy a CD – we shell out the cash.  If we buy at book at Barnes & Noble – we shell out the cash.  If we hire the services of an accountant – we shell out the cash.  If we go to a weekly yoga class for lessons – we shell out the cash.

So why don’t we want to pay for anything on the Internet?

We want free email.  We want free social networks.  We want free music.  We want free TV shows and free movies.  We want free news.

The problem may be that consumers have been conditioned to get things for free on Internet.  We have been getting a free ride since the crazy, dot-com days in the late 1990s.

And that may have been the biggest mistake businesses and organizations made when they made their first forays onto the Internet.  In order to entice users online, they gave away their products, services and content.  And now, more than a decade later, as 82% of Americans use the Internet and shift away from consuming goods offline (such as CDs and newspapers), businesses are beginning to realize they can no longer subsidize our long free ride on the Internet.

Free simply can’t work online forever.  Musicians can’t create songs without a pay check.  Novelists can’t write books if they don’t get paid for their time.  Software engineers can’t create social networks without revenue.  Journalists can’t produce news without salaries.

What do you think?  Have we been spoiled by getting too much for free on the Internet?  Are you willing to pay for content on the Web?  Would you pay to use Twitter?  Or Facebook?  What do you think the solution is?

Links:

2010 Digital Future Project survey

Is Free Just a Stage in the Growth of the Internet?

Why Free Won’t Work for Journalism on the Web

Photo by Jessiee Cuizon (via Flickr)

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93 Responses to “The Internet’s “Free” Problem”

  1. I think the answer is complex, on the one hand, and simple on the other. Let me take newspapers for example. Newspapers haven’t fully made the shift to digital. As they slowly do, they are in many cases giving their content away. The iPad app for the New York Times is free, while the Washington Post costs us money. That’s significant. And I think newspaper will suffer in the long run, instead of recover. They will suffer because of the very point you mention. We have been conditioned to want digital content free.

    I don’t think people would necessarily have a problem paying for digital content, if we start now. I do think theirs room for bloody riots in the streets if Twitter, Facebook, or other social networks decide to charge because we see those as communication vehicles.

    The argument could be made that we pay for phone service. Yes we do. But we have been conditions for nearly 100 years to do that.

    Furthermore, we pay for access to the Internet. I pay a provider, they provide me access to the device (the Internet) through which I communicate. I think we view that much like a phone system. I pay AT&T for access to the conduit, I don’t pay access to the phone of the other person I’m calling. That, to us, would seem silly. Although, I think it would drastically reduce the frequency of telemarketers calling at dinner time.

  2. That’s an interesting point, George, about the “free” concept drying up after all the data creators (newspapers, musicians, etc.) no longer have the means/money to produce. Perhaps when readers realize that the Internet has no more meat to it (and only TMZ), then they’ll be willing to pay. But hey, that could take years and years to evolve. And time we don’t have.

  3. I think the internet should continue to be free. We pay for everything in life besides air, and that’s only because someone hasn’t figured out a way to charge us for breathing yet. Internet belongs to everyone in the world, and nobody should have to pay to use it.
    http://www.denwrites.com

  4. nope. m not willing to shell out money for twitter, facebook or any other social network. m sure the engineers and businessmen can find ways to earn without internet users resorting to credit card use.

  5. I wouldn’t say we have been spoiled. When the Internet first came out people had to get on America Online and pay in order to search the net and get email service. Now, we still pay a monthly service for our Internet, therefore I think many people feel that since we are paying we should be able to look around for free. For example, you pay to go to a museum, but what if they told you…”well, you paid to get inside but you have to pay more to look at everything.” Yes, they make you pay for certain exhibits and the Internet makes you pay for certain things…but we at least what to look around at some free things since we paid to get in… :-)

    http://www.wutevs.wordpress.com

  6. What happened to the whole ad revenue thing? Don’t popular sites rake in cash because advertisers pay premium prices to post their products on the popular pages? Yeah, maybe somebody screwed up in the beginning by giving out the milk for free, or maybe internet consumers are spoiled. But that’s no case to wreck the internet in the same way cable TV somehow managed to get wrecked (if you remember, the whole reason you PAID for cable was so that you didn’t have to watch commercials).

  7. I disagree. You’re conflating free and public. People, view the Internet as a public gathering place, the same as a city park or a shopping mall. It’s up to the merchants surrounding a public place to entice people into spending money, and people do spend huge amounts of money online and more all the time.

    Whether people “should” regard the Internet as a public place is debatable, but it’s not a problem that needs a solution, it’s what it is. Sure, a lot of things are changing as the economy and humanity adopts the Internet, it’s not much different than when the automobile replaced the horse. I’ll miss newspapers, but, having an entire series of industries devoted to harvesting a forest every day and turning it into printed material that maybe .01% of gets read before it does into the waste stream is pretty silly now that we have the Internet.

    Some companies will adapt and flourish, some won’t.

  8. I have a suspicion that it’s part of a big paradigm shift away from capitalism as it’s been working since the end of the Middle Ages. Between the planet-crushing potential of ignoring externalities and the urge to commodify absolutely everything, the current way of conducting economics has got to change. No one pays me to write my blog, I do it for the joy of it, so why should they have to pay to read it? I’m not suggesting a return to some extended bartering system is a good idea, but that’s the exciting and terrifying thing about an impending paradigm shift– you don’t get to know whats coming until you’ve got both feet firmly stuck in it.

  9. “And time we don’t have”?
    I don’t understand that bit. The internet has (also) bred us to expect immediacy. Understand once more that time is relative. Relax.
    And while I understand the imperative nature of what you mean–as a writer and musician, the faster the change the better–but…
    it’s long since been that artists have had to hold multiple jobs (alongside their creative outputs) in order to keep the lights on.
    As for Facebook and Myspace–their advertising and (former?) sales of personal information more than pays for the use of the site in my opinion.
    Twitter…well. If they start charging, we’ll probably see a movement more towards business and commercial organizations/non-profits using the site for ads/event updates. That is, until the company gets involved with someone else like Google, for example, or Verizon, and includes the subscription charge under the heading of “communication package” or whatever people are paying for to use smart phones.
    As for artists…I don’t know. I’ll keep my library and editing jobs for now.

  10. There are other models besides the “consumer pays” model. That is obviously the simplest and most attractive, but it also has the most resistance.

  11. Internet’s policy is that they provide little , for example services like flickr.com allow us to use them to particular extent and beyond a limit we should pay for the extra memory for our memorable pictures and videos.
    Internet is not always free , they pretent that they take nothing, but even they use our personal details for making money.Yesterday too I get spam on my mobile[SMS] that I am the winner of an online lottery….lol. Believe it not internet is not a good place at all, especially for girls and children.

  12. I don’t agree that the internet is free. I pay a monthly fee to access the internet. No, I would not pay for facebook, twitter and the like. I often find it difficult to find specific information on the internet without having to pay for it. Itunes, ebooks etc.

  13. As an entrepreneur you have to look at revenue from a creative viewpoint. Google doesn’t charge you to help you find something on the web but they make a fortune in advertising revenue from selling adspace. Public television has had that model for the longest time as have newspapers – the money they charge for the paper doesn’t even cover their printing cost. You have to think out of the box.

  14. A free internet assails the whole notion of intellectual property, and, in that sense, the “problem” is nothing short of a revolution. The makers don’t own the content. Instead they contribute to big free piles of stuff: information, visual art, photography, movies, television, blogging, journalism, music, and so on.

    Many young people don’t believe makers should make money at all. They think makers should have a higher calling to their medium and that being heard, seen, read should be reward enough. It’s a convenient way of seeing creativity and suggests culture has no price, but it does have a price. People who create still have to eat and live.

    Selling advertising seems the only reliable source of revenue associated with the internet.

  15. There is a really simple business practice that this applies to:
    If you offer something for free from the beginning and it is not advertised as a limited-time promotion, don’t plan on charging for it in the future.

    There was a coffee shop I frequented for years in my hometown that offered free WiFi. It was nearly impossible to get a seat in the [very large] cafe because it was the only place to get free internet. We all appreciated it, and considering it was the only place where I had access at the time, I spent well over $10 a day there on product. The service eventually vanished completely because they believed they were losing seats for valuable customers to people who made no purchases. The effects were disastrous. The company ended up losing about 95% of their original customers who were outraged and somewhat offended. On any given day at any time, you could walk in and find maybe one person sitting in the corner with a newspaper, but the majority of people were headed to the nearest Peet’s or Starbuck’s who actually HAD internet.

    Eventually, the company brought internet back, but it cost $8 a day and included free black coffee whenever you needed a refill. No thanks, I’d rather spend $10 on the coffee I want and have free internet. Most people still have the same idea. The coffee shop has never really recovered.

    Now, people are not going to give up the internet as there is no alternative. However, with how many people are using it already, there are going to be brilliant minds playing with the controls if/when they charge for specific services, and it will be a constant battle to prevent the tightly-locked information from leaking. I would hope that developers would have the choice of charging for their site, and if they chose not to, they could post whatever they fancied.

  16. The online time I pay for anything on the internet is when I’m shopping online.
    There are still a people that don’t have access to the internet, they have to go to their local libraries, workforce centers, internet cafes, etc…

  17. I pay for the computer, the software, and a monthly fee to a service provider in order to access the internet. I expect to find a certain amount of “free” content once I get online, just as I expect to be able to view a certain number of “free” TV channels once I have paid for a TV set and a satellite connection fee. If some internet sites want to charge a fee to view their content, they are “free” to do so!

  18. A week or two ago I made the same point to someone when a website decided to quit maintaining a free service. I pointed out that those “free” services cost the company time and money to maintain, and at some point companies decide something costs more than it is worth. I think most people understand this and are really only venting out of disappointment when something is no longer free. One needs to keep in mind that “free” comes with a price. People aren’t given “free stuff” just to be nice; they are trying to get something in return: advertising, data, traffic, exposure, a lead in, etc.

  19. buytupperwarebangalore July 28, 2010 at 10:52 am

    if u charged for twitter and fb then there would be very few users. As it is u hardly can sell anything on twitter as most folks themselves are sellers so who are the buyers on twitter. The % is limited.

  20. It’s called advertising. Because even porn is free these days.

  21. As soon as they put a price tag on twitter, facebook, or any other social media…I’m out. Or I’ll just create my own “free” website…then charge people after a while and make a killing. Hm. ha

  22. I would not be willing to pay to social network. After all, social networking in my opinion is a huge waste of time, and there is often too much drama going on. People don’t know what the word ‘privacy’ means anymore because of social networking sites.
    Price tag to network = no networking = good riddance

    However, for services such as news and entertainment, I would be willing to pay, as long as every service out there started charging at or near the same time. What a kick in the pants to have to buy something when you could have gotten it for free. That is the problem though. I agree that something needs to be done about the free services on the internet. While it benefits people such as myself, it doesn’t benefit anyone whose internet career involves trying to put dinner on the table.

  23. If advertising is present, then it isn’t “free.” I haven’t done my research yet but I do believe there is a wee bit of advertising on the internet. :)

  24. Interesting thoughts. What you failed to mention though is the revenue that comes into these sites from advertising. Facebook is free to users, but is chalked full of adds. They have to make money somewhere. Hulu was 100% free, now they have a paid service, but it is add supported. As long as these folks are selling ad space, they are making money and can continue to give their service away for free.

  25. Social networking is something I struggle to do anyway. If I had to pay, it’d either make me give up entirely or do it better.

    My Facebook news feed is constantly telling me my semi-existent friends have joined the group “For Those Who Refuse to Pay for Face Book from the 10th of July 2010″. If we were told from the start, we were being given a free trial then had to pay after a month or so, there would be less users, sure, but people would be more accepting. But instead they accept one important fact: if it starts free, it should remain free.

    But I think the real point is, the internet is where we can get or do things we can’t get or do elsewhere. You can’t micro-blog offline, sticking post-its around the office telling everyone what you had for lunch, or how tired you are LOL or such inane banter. If these unique services are offered for a price, someone else would offer it cheaper, then someone else would offer it even cheaper until it’d end up free. That’s the problem with it being digital – we can’t physically own it, hold it in our hands or bite it like some Spanish doubloon. The mentality is, “If we don’t physically own it, why should we pay for it?” I’d prefer to buy a nice DVD boxed set than a movie download. Then again, if I’m offered the same film for FREE (legally, of course), then I’d much rather take THAT.

    The internet is the place for innovation, the place for unique activities and the place for free stuff (http://peribothra.wordpress.com/2010/06/30/free-stuff/).

  26. I absolutely love the myriad of free information and use that’s available to me. If I had to pay for everything I use on a daily basis via the internet, I’d either be broke, or have to change every single aspect and direction of my life. Neither sounds fun.

  27. I like the news and social networking sites on the internet staying the way they are currently. If facebook had to charge a fee, people would not use it. We already shell out $40/month for internet as it is, and we do spend money online. I wonder how much Americans spend online shopping?

    The whole key to drive things forward is advertising. When a free website generates millions of subscribers, they then can sell our time to advertisers. It is no different with television. NBC, Dunder Mifflin, Dwight, Jim and Pam create “The Office” (provided free over the air) and then sell our time to advertisers.

    The second a news agency starts charging for their services on the internet is the begininning of their online extinction. They know this, of course.

  28. The internet is not free. We pay whatever isp for it. I suppose one might use libraries to avoid such a fee. Even then, users are bombarded with unwanted advertising. Companies use internet and site demographics to know what we look at, what we buy, and they formulate very very carefully what to shove at us that we MUST have next, because they spend a LOT of money figuring that out ahead of time. The internet is not free.

  29. The problem goes far beyond people wanting something for free. what you are winessing might be a result of the middle class having their discretionary income squeezed.

    i think a much more difficult problem to solve would result from making too much of the internet fee based. a lot of the information now available at the tip of your fingers thanks to search engines would now be password protected.

    you do have my sympathy

  30. The term “free” implies that there is no exchange occuring, that the user is getting something for nothing. The fact of the matter is, Facebook is not free. In exchange for the services they offer, you provide them with certain demographic information which they are then at liberty to use in pursuit of advertising revenue. If there are businesses who will die out because they cannot figure out how to take advantage of this type of exchange on the internet, then they are being naturally selected out for lack of vision. True, a musician can’t produce songs without a paycheck, but she can certainly give away songs to users who provide user info and then sell advertisisng.

  31. You’re confused about who is providing what to whom. Facebook and Twitter should be paying us. We are the content providers who attract people to their sites. Not only do we attract people, we also give up all control over our content once it’s posted on a site like Facebook. It’s a donation to them. And we do it all for free. If anyone is getting a free ride here, it’s these media companies.

  32. Such an interesting debate !
    I believe that we have an fascinating 3 actors’play : people / media / brand. And at the end of the current internet business model evolution, we’ll end with this.
    + Brands will pay
    + Media will gather and qualify the audience
    + People will consume mainly for free

    I don’t believe in any strong come back of the paying model. Everyday people invents smarter way to have brands pay for people consumption. Brands might even pay for your internet access one day…
    So the real question to me is : at what stage will we rather pay than having a brand pay for us and push us some advertising ? Brands won’t draw the line. We will. But when ?

  33. If the internet stopped providing free content then many companies would go under. The ISP’s would take a hit since people wouldn’t pay 60 bucks a month to get to the internet only to have to pay a fee per site to view content. It would be a waste of time. Musicians make money at their concerts not necessarily album sales, that is the recording company. The only people that would benefit from a fee based internet would be hackers as they would destroy the internet in retaliation. Their whole motto is based on free public information on the internet. No one would be able to afford to pay for all the free services we currently use online. It would cost way to much. $60 for comcast, $5 for news, $5 for twitter, $8 for Facebook, $.50 per google search, $7 for Flickr, $10 for Hulu, $10 for youtube. There is absolutely no way this would work. Try it, put a price on everything you use online and see if you can afford it a month.

  34. The internet should stay free because as we become more technologically dependent, the internet is becoming more of a utility than as a luxury. You can’t charge people for the air they breathe and the water they drink. Every person should have the right to free information from a variety of sources. By pricing the internet, the overall education of the nation would take a hit.

  35. I don’t think it would matter even if substantially more people were willing to pay. If twitter and facebook charged for their services, many people would leave. The more people who left, the less valuable it would be to be a part of those networks.
    Further, Mark Zuckerberg is said to be worth over a billion dollars. You think he should start charging for facebook? Methinks he’s doing all right.

  36. The internet should DEFINITELY stay free.
    -Noor

    http://noor724.wordpress.com/
    :)

  37. I currently offer a free iPhone App (JewishAlmanac), and offer my book for free as a pdf download, and a print version on Amazon. I have found that as people read my content on the app, they are willing to try out the pdf, and then they want a physical copy.

    The internet offers zero barriers to entry, and as such just by being on the internet you have zero credibility, and zero trust with people who visit you. Since there is zero trust, there is zero willingness to pay for anything.

    For content developers, trust must be earned, then offered more relevant and higher quality that information that people will be willing to pay for.

    The daily ramblings in the news are not worth much. Perhaps if each news report had an in-depth analysis offered that was in connection with it, people who were really interested in that content would be willing to pay a premium for that information.

  38. lets just put it this way: I and most ppl would probably still be using our ridiculously expensive phones and write letters and send faxes to connect and share with friends if it were not for the free this and that. We would probably have a stronger connection with our community and maybe talk to our parents rather than e-vite them over for dinner. Perhaps charging would be a good thing. In this economy hardly anyone could afford it and maybe we would have a little more face to face time with others. Just a thought though

  39. Don’t even go there! Of course it should stay free! The next thing you’ll want to TAX it! Puulease!! There are many ads on the internet, so it’s not totally free, you have to buy web sites, etc. I think if Facebook started charging, people would leave like rats from a sinking ship, and thus a new social network would pop up. I’ve seen the comments on FB as I’m sure you have and everyone says they would never pay! Twitter, who cares?! We also PAY for our computer hookup service don’t we? So get real?!

    evelyngarone.com

    evelyngarone.com

  40. I never thought of it as a “problem…” I can see how it might be for the heads. The thing is, they tend to push and push and push advertisements on those sites, and advertisers pay for that space, so they are getting money in some ways. I don’t know that it’s enough money, but it is probably a goodly amount.

    I would just stop twittering and facebooking. If those things became paid services, they’d become an indulgence, and I don’t really have much pocketbook space for those these days :/

  41. People using say Facebook for example are not users mooching something free. They are the providers of the content that Facebook is making boatloads of advertising money off of.

    It is not as if Facebook is doing this out of the generosity of their hearts and incurring expenses to provide to the masses for free. That’s not the case at all. And yes I would leave FB if they charged. Without a doubt, because it is basically an exchange. And I would never pay to provide them with my content that they are already making income off of.

    “We” (the users) provide content that brings others in, Facebook provides the services, FB most certainly does get paid – in the form of advertising. Nobody would be paying for ads on FB if the users were not providing the “free” content in exchange for use of the services.

    So it may appear free on the surface, but there is actually a great deal of money exchanging hands.

    http://www.DorkyDeb.com

  42. The Google model of providing services seems to work well and follows these general principles:

    Provide people an excellent service backed by tons of research(search engines, blogging, email, maps & directions, picasa, etc.)

    Post tiny ads that lead to google on other people’s page and pay the host per click.

    Offer the google sidebar as adspace for advertisers

    and finally, charge people who want to use a more advanced version of their services (google earth pro, more picture uploading space, etc.)

    They initially attract and keep “consumers” with free services, and offer them upgrades and alternatives with price-tags. Twitter could start putting tiny, unobtrusive, ads on side-bars (like facebook does) and pay for itself.

  43. I pay for my ebooks in the Kindle store. I get my music via a Rhapsody subscription. I watch online movies with a paid Netflix subscription. I pay a subscription fee for online games, and even for the voip server I use to communicate while playing them.

    In fact, I’d say I’m more likely to pay for something on the internet than I am to go out and buy it in a regular store.

    Five years ago I would NEVER have paid for a music/movie subscription. But I do it now and gladly. I think the attitude shift you say we need is coming, just slowly.

  44. Great comments all. I appreciate your insights and opinions. Keep ‘em coming.

  45. It’s hard to say for sure if we’re spoiled. We are willing to pay for some content online, but other stuff we wouldn’t dream of paying for. To us social networking sites are one of the things we wouldn’t pay for. A lot of it is all how you look at it and what you will or won’t pay for. Right now we don’t pay for cable but we will pay more for video games. We spend more in certain areas and spend less in others. That’s just the way it is. If we feel it isn’t worth our time or money, we don’t do it.

  46. I think there is a difference between products & social networking for lack of a better term. Products (music, movies, books, journal articles, etc) are things we pay for in the real world and therefore have a monetary value whereas chatting with your friends or random strangers does not. While internet users don’t want to pay for either category while online, when it comes to products as long as the same thing is available in the real world people will not pay twice. When the products online are also already paid for in other ways, advertisements, pop ups, market related tracking cookies, etc. people have the sense that they have already paid or that the provider has already been paid as well.

    In terms of non-product those same alternative forms of payment may be going on. Or there is an even more indirect form of payment, ie someone is paid but maybe not the provider of content. You pay for your phone, DSL, Wifi, 3G, etc. so you’ve paid to talk once, you don’t want to pay twice just to use twitter or facebook which is dependent on the first payment. As long as you can call or text your friends, paying twice seems not only redundant but unnecessary.

    What I’m trying to say is that there are already costs involved in much of what we do on the internet. The more transparent those costs the less likely people are to spend more on what is seen as a “free services.” That to me is as palpable as your point that we have been conditioned not to pay for the internet directly. I think both exist and the people not getting paid (journalists, artists, etc.) are caught in the middle.

  47. Good article first of all!! Now for a response: I think the reason most of us would not pay for our emails, social networks, twitter, internet news, etc. is that we did not start out paying for it. It makes no sense to offer something for free for x amount of time and then start to wonder how much you should charge.

    We do shell out cash when we go shopping but Walmart, JC Penny, Bath & Body Works, Ed Hardy, etc. never not once gave us stuff for free.

    We have been conditioned somewhat but guess what, we love our free internet content. It’s not as if the business world is not making a return on all this free info/entertainment. Many of us shop according to what we read on the web. We buy books, magazines, technology based on our internet travels. It seems like a win/win to me.

    Also we are receiving these things free but still with the price tag of some serious surveillance and that price is pretty steep if you ask me. Facebook, Myspace, Twitter, Mashables, all these sites offer extensive information to the powers that be about us and they love that too.

    I don’t have a solution because I don’t have a problem. Ask the inventor of Twitter if he has a problem. He’s rich. The Facebook guy is rich. The Myspace Tom guy is rich….what is the problem? They’re making money, we get free content that turns into them making more money!

  48. I find your article interesting and this topic is a fun one to address. If forced to pay for social networking, so many people would back out. What would come in the place of social media online? Maybe the next internet shift will come when networking online becomes an extra monthly payment.

  49. Interesting and thought provoking post.

    Your quote at the beginning raises a challenge–Is it a question of having to pay for something you already get for free or is it a question of whether you would pay for something that is so useless that you only use it because it’s free.

  50. No products are free on the web outside of freeware, and by that I do not mean adware, crippleware, etc. The products such as email, etc., are ad-supported, which means they are being supported by the business community. How ingenious!! In return you are allowing advertising and all the crapware, web beacons, etc., that your computer allows to be on it. So, the company providing the service is being paid two ways, plus you’re paying the advertiser! You’re paying the company by using their service, which allows them to honestly claim you as a visitor to their site. In return, you are getting a service. The company providing the service is also being paid by the advertiser. You are also paying the advertiser and the company supplying the service by giving them your time and consideration. NEVER FORGET THAT THESE THINGS ARE WORTH SOMETHING!!

  51. We’re not willing to pay because it’s not a need. I use facebook because it’s free. If I’d have to pay for it, I’d find other ways to keep in touch with international friends. In fact, because of social networks, I don’t speak to my friends as often. We’ll all survive without any of these “free” services!

  52. Is watching ads or getting bombarded with advertising free? I think not. Writing a check to use twitter is not going to happen but watching an ad when you log on might.

  53. Those websites get so much money in ad revenue, it’s ridiculous. The internet should stay free.

  54. I completely agree that there is a significant amount of spoiled-ness. People actually if hard pressed, now that they are so accustomed to the perks of the internet would be frustrated but begrudgingly they WOULD in fact pay. IF you get so used to eating hotdogs at a ball game… YOU WILL PAY …even if they jack the prices up. Most people speak as they currently think but if put in the situation where there was an annual fee… I think there would be a drop off…but I think the vast majority would fork the cash over.

    VERY INTERESTING AND THOUGHT PROVOKING BLOG POST!

  55. As long as there is ad space for sale on the internet, there will be enough revenue to sustain these sites at no charge to the users. I would bet at some point (in the not-so-near future) FB and twitter will give users the “option” to purchase membership without ads, like xm radio and dvr. BUT with the onset of behavioral targeting, users are going to find that the ads they see are more relevant and probably not mind seeing them anyway!

  56. I’ve had to look at this from the point of view of being a (not yet very well-known!) writer, and thus to some extent a ‘content provider’. It does seem that internet users expect services provided over the internet to be largely free, including downloadable music, books, programs etc. – hence the popularity of filesharing. Yes, some people do pay for their Kindle downloads – but many don’t, and I’d speculate that since the April change to the sales agreements and related price hikes, there are many who’ve moved in the direction of getting some, or more, of what they read from pirate sites.

    The problem for people like me is this. Facebook and other websites can make money by accepting my content and using it as a base to generate advertising revenue. I can’t generate that revenue independently, but at the same time it’s unlikely I can charge directly for what I do and expect to make a living.

    The answers are likely to come in the form of – for example – added extras that people might pay for. An ebook might be free but the printed version contain extra material or be bound in some customisable way (or even be signed by the author in his or her own blood!). The ebook may be free, but live readings (possibly filmed, so the audience appears on Youtube?) would be paid-for events, and again include ‘extra’ material. The Stephen Kings of this world could set up a system where their next book will be released for free once donations top a pre-determined amount. And remember, TV and radio still pay their content providers, and conventions pay for those who sit on panels or give talks… Maybe one way forward is to see the internet purely as a means of generating more direct, personal, paid-for links between creatives and their audiences.

    Some of these techniques, such as a distinction between what ‘free access’ users and ‘members’ get from websites, and using the internet to build a demand for live performance, have already been done in areas such as pornography (and remember, porn was one of the major driving forces of the internet from its inception!). As I understand it the porn industry isn’t doing particularly well at the moment, but it might pay us to look carefully at how it develops in terms of ‘monetizing’ what it does.

    As a middle-aged male with bad teeth and a so-so physique, I’m never going to be able to copy the ‘porn revenue model’ (whatever that turns out to be) exactly but I’d imagine there will be some ideas there that could read across to literature, music, art, etc.

  57. There’s no problem. I suggest you read about Free / Open Source Software (FOSS). People do, in fact, make it for free. There are other motivations than money.

  58. Econ 101 – Supply and Demand…Local Microeconomics even…think of the internet like a strip mall where everything is close and accessible allowing for price comparison…well this strip is pretty long and sooner or later merchants will be simply happy that you stopped in…

    Can I Pay-pal you a penny for you thought’s?

  59. NO NO NO .. we already paying for our internet ,, its true that we have to pay when you Purchase real things like from amazon, eBay ……

    But not for S-network’s because they already earn with ad’s they put on there page look at face-book.

    What should i pay to chat if that i go evening at park and find lots of Cool Dude around to do Network…

  60. I’ve thought about this too mostly in relation to art and journalism. The internet is rife with amateurs who will gladly jump at the opportunity to display their skills without pay, which makes it hard for people to actually make a living doing it. There is still plenty of quality out there but I do worry that the world is becoming more amateur.
    Is far as paying for Twitter and Facebook, that’s tough. They already have so many people addicted that it would almost be cruel to start charging now. And some free social network would probably just take their place. I’d like see if anyone would pay if they had the option too. Like a little ‘pay what you think I’m worth’ button on Twitter.

  61. I agree, like I see on television so many advertisements for free computer software stuff. But when I check there site, download whats needed and in order to get the full report for it I would have to pay. Plus we already pay for internet why should we pay for a bunch of other simple features other than paying like 60-100$+ for a program that does just the same thing.It makes no sense to me what so ever. I just don’t get the internet yet with the many misleading advertisements out there. I just stick to simple television.

  62. Tokyo Car Club July 28, 2010 at 11:59 pm

    Have I been spoilt by getting things free on the internet. It’s all relative I suppose.

    For example, the BBC shows all it’s content online for FREE whenever an individual chooses to do so. The BBC iPlayer widget shows all radio and TV programmes recently broadcast throughout all media. The downside to this is that all British citizens domiciled in the UK pay a yearly TV license which funds the BBC and all it’s content. Those living outside the borders of the UK, including British citizens, are subject to limited content under the arm of BBC Worldwide – a subsidiary owned by the BBC for commercial purposes.

    Would I pay for FB or Twitter. No! The content provided on both in no way parallels anything like what the BBC or other pay-per-view media offer. I find them to be good ideas riding the bandwagon of success, not an institution we have grown up to rely on.

    If FB charged me, I would cancel my account tomorrow. If the BBC allowed me to view all content from abroad under a licensed agreement, I would bite their hand off!

  63. I’m not entirely sure I agree with the premise that we can’t offer services for free. Musicians can still create music even if they aren’t paid for it. Most do, in fact. People write stories for free all the time.

    We do things for fun all the time. Why can’t they be free? We have website advertising. You honestly think the Blog sites isn’t making money off our “free” blogs?

    I will agree that we are spoiled and the free ride is going to stop though. Just human nature.

  64. i’ll never pay for things like facebook and twitter. point made. i will pay for good journalism (e.g. nytimes.com etc), good musicians and good music, and phenomenal sites like flickr.

  65. Visit the greeting.

  66. It reminds me of a quote from the Daily Show from like a thousand years ago. Jon Stewart was talking about the Real World movie bombing at the box office and said something to the effect of “it turns out viewers are willing to pay up to — and no more than — zero dollars for reality-based entertainment.” But there’s still plenty of reality-based programming on television. I think there is a real need to figure out better ways to generate advertising revenue, as well as determining which online products people would be willing to have some sort of fee for.

  67. The Internet’s “Free” Problem is No Problem, Just Bad Logic: http://wp.me/pvCdb-4Y

  68. Well I guess social networking sites will not be well known if they aren’t free…or don’t have free service at all.

  69. I’d be more than happy to pay a small subscription fee for Facebook, even if it’s voluntary. On one condition though: The Privacy Policy and Terms of Use are changed to be non-invasive, protective, legal in all operating countries, and actually ahered to. Plus all forms of integrated and targeted advertising and leaking of details to 3rd party interests removed. And the change without notice clause removed irrevocably. Static sidebar ads targetted using strictly anonymous stats I’m fine with as sometimes they can actually be handy.

    Given most of the seedy practices going on are due to a need to raise revenue, I think that’s a fair choice. The only flaw with the “premium” vs “free” option is that the “free” option ultimately slides further and further into the seedy realm until half the user base retires from the service and it collapses. Facebook wouldn’t be worth the payment if half the users just departed. A line would have to be drawn initially and not ever be crossed.

    What I have seen on a few rare websites has been pages devoted to answering the question: “What funds this page?” One such example I can think of was an educational SRS site that basically stated you were getting a free service to test their alogrithms and criticise them as much as you pleased so that they could sell them refined later as part of more in-depth packages on the side. A great explanation, and a potentially solid business model.

    Personally, I’d love to see this more often. It’s a note that gives some degree of confidence in the publisher, builds trust in a lack of seedy backroom practices, and ultimately, grooms users for the realisation that one day they may have to pay or accept ads, if and when they change. I suspect that trust will be repaid back.

  70. I think if more places were to operate on the system I’m used to on livejournal. They have three different subscription levels:
    1 – basic usage
    2 – medium usage, supported by ads
    3 – paid, full usage

    It works for livejournal so i think if twitter, facebook etc shifted to that kind of system then it would work because people still get the choice

  71. Brainstorming issue. we all should think over it as freebies always spoil a person, and we have become a spoiled brat now. Thanks for enlightening us.

  72. I don’t think there is any disconnect that internet users have. I also don’t think anyone that connects to the internet is spoiled. Unless you have some deal that no one knows about every one pays money each month for the internet. The real question is how much is enough? In our world the goal is to separate you from as much of your money as possible on a daily basis. I’m sure at some point there will be a fee attached to just being.

  73. As a business owner I do believe it is conditioning. Since we were “given” things like Twitter and Facebook, the monetary value of such social connection websites is $0. And that’s just the way we see it. They aren’t dating sites, which for the most part, have always charged some sort of fee. Twitter and the such gave people “Free Access” to share their thoughts, short or otherwise. Why would we pay for that now?

    You can’t go into a business charging nothing or next to nothing, then raise your rates and expect people to stick around. If your idea is to go after a paying clients, or a certain level of paying clientss, then you should be charging what your product or service is worth from the beginning. Even with uncharted businesses. An estimation of worth is better than being perceived as “worthless”.

  74. Oy, that’s a long list of comments that I do not feel like reading this earlier in the morning. But I’ll leave my thoughts anyway!

    One thing I found out of place with your post is your comment about musicians, authors, journalists etc. When people get most of these things free (especially music) they’re doing it illegally via pirating. Unless you’re on Pandora – hey, wait, they’ve got new ads! So I am not be paying for it but I’m attacked with an audio-visual add over four songs or so. But as far as free music/books, that’s all pirated stuff. I don’t want to pay for twitter because I was given it free to begin with. Why can’t they just keep giving it free?

    I heard someone make the plan that members with something like 10,000 + followers should pay money for the site being that they probably have the money to pay for it. Me? I might have a good chunk of followers in my mind (a bit under 200) but I’m also a poor college student and paying for twitter is unimportant compared to paying for food and textbooks. I don’t think I’m a freeloader. Why did they give everything to us for free, making us expect it, and now they want to take it away? Maybe they should have made us pay from the beginning – but you can’t fix the past so they’re likely going to have to come up with some other, additional way to make money.

    Oh. Like more ads! :P

  75. I preface what I say next with the proviso that I don’t believe wholeheartedly in what I am about to espouse. One of Marx’s theory was that capitalism will one day lead to socialism/communism (I cannot remember which, or perhaps the two are synonymous in this case) has garnered momentum on the internet. I think there are already theories in the wider world that the internet is the lynchpin for the change from a capitalist society to a communist society.

    Personally, I think that all content on the internet should be free. I believe all content should be free in the first place, and that the goodness of people should see donations made to the creators of the service/product. There is a free rider problem with this donation system – no one will feel the need to donate when they don’t have to, thus free riding off the donations of others. This is a paradigm problem. If we have a world where the norm is to donate for the things we enjoy, the free rider problem won’t exist, and the selfish protectionism of creators can be dropped. I don’t know what will tip the balance of the scale in favour of free information for all, but we aren’t there yet. The problem on Facebook is evidence of why we aren’t there yet. We are still too selfish.

    Back on point, I think to say that content must have a price tag is to hold onto the familiar. It works, but it isn’t the only way.

  76. I have two broad thoughts on this.

    From the consumer’s point of view:

    Consumers are accustomed to consuming “stuff” – call it art or media or texts or what have you. And in the consumer’s mind, they are already paying for it when they pay for access to the Internet (at home, on the cell phones, in coffee shops, etc.) It’s akin to cable TV and pay-per-view. Most people are happy to pay for Cable TV and accept commercials along the way. Similarly, most people will accept that a 30-second commercial that plays before their “free” viewing of a Beyonce video on YouTube is a fair deal. But this content isn’t “free”. Rather, the value transaction is made between the content provider who sells ad time to companies so they can get access the consumer. Remember, the consumer is the product here.

    From the content producer’s point of view:

    Many artists, and some distribution and rights-holding companies, are beginning to realize the real financial benefits that can accrue with creative commons licensing. CC is not some sort of revolutionary idea but rather an acknowledgment that our culture creates things by sharing and communicating with one another. No idea is wholly original.

    These are things I believe, but Lawrence Lessig does a much better job explaining it. Check out his site or my blog for me details.

  77. I disagree with you. Free surely can work forever on the Internet. Ask Facebook. It costs nothing to sign up and it is a multimillion dollar company.

    Advertising funds the Internet. Most free websites(that aren’t just ads themselves) has some kind of advertising on them. Facebook, Myspace and now even Twitter all incorporate ads in some way.

    If blogging sites and social networking sites can’t make money while providing their services for free to users, then they are doing it wrong.

  78. @uioae

    A capitalist society is an economic system. Democracy is a form of government.

    Socialism is also a form of economic system. Communism is a form of government.

    While one can exist in tandem with the other, one does not equal the other.

  79. A few observations:

    o The Internet originated as a free-of-charge place. Notably, in the very beginning, almost all users were connected over their college/university and did not even pay ISP fees. The wish to earn money creeped in sometime in the mid-90s.

    o Distributing news over the Internet costs far less than in paper; copying music over the Internet costs far less than making a CD; etc. It is not unexpected that companies were willing to try free or cheap services, that customers are less willing to pay (even from go), and that alternate streams of income (see next item) were seen as alternatives.

    o Free-of-charge does not imply free-of-income: There are other ways to make money, most notably advertising—and a combination of free services and advertising is very natural in light of e.g. TV. (Notwithstanding that many of the thoughts on Internet advertising have turned out to be over-optimistic in hindsight.)

    o Many companies have deliberately started free-of-charge to build a user base (something extremely important), with the option of charging at a later date. Some have done so successfully, others have tried and backed-down after a failure, others yet have seen the failure of others and not even tried.

  80. What a lot of people fail to realize is that most people dislike the constant interuption of advertising. And it is the advertising on social networks that cause the problem of privacy intrusion – by scanning our data for keywords and profile keys to serve up the customized ads.

    Besides, as the newspaper and magazine industry has proven – you can’t make money with online ads and support a vibrant content creation operation like a news room. Google and Facebook get away with it because they don’t create content – they aggregate the content of others.

    If we want to have the internet be a vibrant and creative engine then there needs to be incentives for artists, writers, engineeers, designers, etc. to make money there.

  81. With any new form of technology since the beginning of time, some old jobs will break down and die, and new jobs will be formed. What is going on now is a transformation in the Workforce. Musicians, Artists, and other artistic forms of work have always had a hard time making a steady income since the beginning of time because in past days it just wasn’t useful, and really it still isn’t. In the distant past, in even 1592, people also questioned themselves wondering, “Why should I pay to see a concert or play when I could do the same thing myself, and entertain myself in my own home for free?” If you were among the wealthy, you wasted useless money on entertainment, but others entertained themselves did it themselves. Those jobs are “entertainment” but they aren’t contributing to society in any other way. Patrons supported the business, but since the beginning of time, people in those professions have suffered and will continue because of the type of job it is. It is a hard field to get into because it’s just not a very practical job that contributes to society aside from cultural statements, which tends to change with every generation.

    So chances are, whether we cause people to pay on the internet, or whether we don’t, there will be something interfering with artistic jobs just like there always have been, and with new technology, the world will begin to change and jobs will die and new jobs be reborn. That is Generation Virgo’s doing (Everyone age 34-58 are changing the workforce right now).

  82. The internet is part of the current COMMONS.

    There is very little commons around these days.

    It once included everything required for satisfying basic needs such as fresh water, grazing lands, wood fuel gathering and space for housing.

    We once had cultural commons as well. Such as traveling minstrels, jesters, even in some cases preachers. These folk were compensated on a voluntary basis.

    Once a rhyme, verse or hymn was introduced to a community it became a common good.

  83. absurdoldbird July 31, 2010 at 2:39 pm

    Well, I don’t know about you, but I pay for my broadband connection so, to an extent, I’m already paying for so-called ‘free’. There’s very little that is actually, really, free.

  84. I think the core problem, if no one has mentioned it, is that the Internet is the biggest delivery system of utterly ephemeral stuff. I can spend hour, after hour, and bloody hour on the thing, and although there may be a few wrinkles in my brain for the effort, I come away essentially with nothing.

    If I go to Target and buy a CD, or a DVD, or a book, when I plunk down my money, I have physically, a CD, a DVD, or a book. I have the container the lovely delicious digital bits are in. I want the delicious digital bits, but I need a container to hold them in.

    In the case of the Internet, it contains all the luscious digital bits I could ever want. And although I may try to, I can’t keep them. I can’t go to Facebook, read what’s there, and take it with me. I can go back to Facebook and see a new Facebook. Every time. So why should I pay for something I use, but ultimately, can’t hold on to. I can keep a physical newspaper. Conceivably, I can keep every newspaper I’ve ever read (libraries still do) but that’s why it was only a nickel (when it was a nickel). I’m paying for some cheap paper and cheaper ink. The information on it was still free.

    And that’s what we have now.

  85. Hi Albert:
    Beautifully put. I’ll have to ponder that perspective to fully put my arms around it. Thanks for the comment.

  86. @Albert

    I see several problems with this perspective (notwithstanding that there some truth to it on the subjective level).

    Most notably, the majority of the payment for a physical book/CD/DVD/… has been for the “intellectual property”—not the physical manifestation. The variable cost of printing an additional DVD may be as low as a few cents (certainly less than a dollar, cover and packing included)—yet, this DVD may sell for 20–30 dollar. Even subtracting for variable cost for various forms of handling and transportation, it really is the digital content that matters.

    (Your example with newspapers is harder to analyze, considering e.g. the large proportion of financing that comes from ads rather than newsstand payments.)

    A few less important items are that it is easy and cheap to put digital content downloaded from the Internet into a physical form (caveat: the paper versions, unlike CDs/DVDs, may be “too different” from the store-bought products) and that libraries rarely store old papers in actual paper form, but prefered micro-fiche and (I speculate) today prefer computer files.

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