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Asia Buzz: Should the Net Be Free?
Web heads want it all -- for nothing
By ERIC ELLIS
November 30, 2000
Web posted at 3:40 p.m. Hong Kong time, 2:40 a.m. EDT
Original content, on-line. Everyone agrees the Web's got to have it. But
everyone also seems adamant they won't pay for it. The Net's free, they bleat.
It's a basic human right up there with shelter, food and, depending where you
live, democracy and freedom of speech. Don't tax it, charge for it or ban it,
goes the libertarian cry of the Nerdistans.
But where geeky disbelief gets suspended is the part where the argument goes
that generating content costs money. It takes skill and time. And how quick are
the critics to pan websites that simply slap up recycled content from print
providers? Web heads want it all -- for nothing.
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INTERACTIVE |
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Look at Yahoo!, they cry. It has oodles of content and it's free. That's half-
true. Yahoo has arguably perpetrated one of the business world's biggest
confidence tricks. It claims it is a content provider -- and it is, sort of. But
Yahoo doesn't have a massive newsroom. It doesn't employ teams of skilled
writers and editors to finesse pearls of wisdom. It expects others to do that.
Then it expects those others to mostly give those pearls away to Yahoo! in
exchange for the Web traffic, the highest in Net Land, that Yahoo generates. And
as long as people believe Yahoo! is the benchmark, Yahoo! will continue to "own"
the Net.
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ASIA BUZZ |
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ASIAWEEK |
Intelligence
The story behind today's news from the editors of Asiaweek
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But a crunch is coming. In fact it's already arrived. Net-oriented content
companies are running out of money and no one wants to put any more in to keep
them going. And pure content plays are the business Web's worst performers.
That's a problem for Yahoo!, which thrives on getting its content for next to
nothing. The market today is not as impressed with huge Yahoo-like, page-view
statistics as it once was. The advertising model's not generating sufficient
income to keep content companies alive, no matter how worthy their output.
Traditional content practitioners -- they used to be called journalists and
editors -- who migrated to the Web, are wandering back again to where they are
comfortable: their old off-line homes. They're much more reassured knowing that
there will be a tomorrow. And comfortable with working with fellow travelers who
value content for the value of what it says, and not as a commodity. I should
know. I'm one of them. For much of this year, I viewed the other side. And it
wasn't pretty. I had some fun. I believe we did some worthy things, and readers
generally liked what they read. But I couldn't see a long-term future in
it...and it had little to do with the tech stock market downturn.
Something's got to give otherwise the Web will go backwards. More and more
content companies are reexamining business plans and launching pay-per-view
sites. And they are mostly brand names that have built up trust in the off-line
world. Interestingly, this is against the advice of Netheads who briefly had the
Old Economy in their thrall while the market was roaring. But with the NASDAQ
spluttering, the old empire is striking back and ignoring the pundits.
Paid subscription sites were first tried in the U.S. with new titles
Thestreet.com, which aimed to become the Wall Street Journal of the Internet,
and Bill Gates' Webzine Slate.com. But as the Web exploded, sites that tried
user-pays content quickly found no one was willing to pay for it. Viewsers fell
away quicker than Richard Li's share price. Then they changed back.
Thestreet.com switched back and forth a few times, but for the last 18 months
has been free. Earlier this month, Thestreet.com laid off about half its staff
and closed its London-based European site after operating for just four months.
The only content sites that claim to have successfully managed a subscription
model website are Wsj.com, the on-line vehicle for the Wall Street Journal, and
The Economist.com. And they did so because they are trading off trusted, stellar
reputations formed over decades off-line.
There's another reason. Despite all the best technology in the world, on-line
advertisers can still only make assumptions about who visits websites. Titles
like the WSJ and The Economist know their market intimately. They've been
massaging them for years, offline. And their wealthy readers have come to trust
them. And stay with them. Advertisers like that.
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