Posted on 11/11/2001 8:20:33 AM PST by Leroy S. Mort
The Web is an amazing and remarkable phenomena that has changed the way we think about information, publishing, commerce and computers. Most importantly, the Web has had a huge effect on every individual's ability to distribute information to the world. Prior to the Web, there really was no way for an individual to reach a worldwide audience. Today, with the Web, worldwide publishing is simple and instantaneous. Anyone with a computer can publish anything they want, and the entire world can see it a few seconds later. There is tremendous creativity and thousands of new ideas. The possibilities for content and services that the Web can offer seem endless.
While it is extremely easy for any individual or business to publish material on today's Web, one thing is currently missing -- there is no easy way to make money from those Web sites. Three years ago, there were two schools of thought on Web business models:
Today, there are very few good business models that work on the Web, and this deficit has a significant effect. The Web is becoming somewhat like a desert. There are some survivors -- Ebay, Yahoo, Amazon and so on -- but nothing new is germinating in any significant way.
What if it were possible to change things? What if we created a business model for the Web that worked? In other words, what if we could find an easy general way for Web sites to get paid for their content and services? If we could figure that out, new Web sites would surge from the desert floor like an explosion. We would have millions of Web sites producing every sort of content and electronic service that you can imagine. There would also be millions of jobs created in an electronic economy that we only see the barest outline of today.
In this edition of HowStuffWorks, we will discuss the "penny per page" idea, a potential business model for the Web that would allow Web sites to receive direct payment for their content.
This idea is being published here so that people in the Web Community can see the current problem, see the effects it is having, and discuss possible solutions. The "penny per page" idea described in this article is one easy solution that would have a gigantic positive effect on the Web -- it would transform the Web and change the lives of many people in just a few years. However, even if this idea is never adopted, the discussion will be extremely productive.
The Challenge Facing the Web
How can we build a successful electronic economy on the Web?
Originally it was thought that advertising would support free Web sites in the same way that advertising supports free TV stations and free radio stations. Almost all commercial Web sites therefore adopted the "free content with paid advertising" model. Unfortunately, this business model ended up being completely wrong for the Web, and a huge number of sites went out of business by using this model.
The reason that advertising does not work on the Web is because the Web is nothing like TV or radio. TV and radio are linear, and with a linear medium you can force the viewer/listener to pay attention to an ad that interrupts the program. The Web is nothing like that. Instead, the Web is much more like a book or a magazine. People come to the Web primarily to read and see pictures, and they can flip to a new page or to a completely different site whenever they feel like it.
When you go to the book store, you never see free books. It is also very rare to find books containing advertising. Instead, people pay directly for the information that books contain because the information is valuable to them.
The challenge facing the Web today is that the Web is using the wrong business model. The Web needs to adopt a new business model in order to be successful -- in order to reach its full potential. The Web's revenue model needs to involve payment like the book revenue model, but it also needs to accomodate the completely infinite and fluid nature of the Web.
A Penny Per Page
The proposed mechanism for creating an easy, sustainable revenue model for all Web sites has a very simple name: It's called a penny per page.
Here's how it would work. Let's say you go to Google to do a search, or to CNN to read about Afghanistan, or to Amazon to buy a book. Whenever a person looks at any Web page, that viewer will pay a penny. The Web site will receive the penny. It is that simple.
With a penny per page, in five years we would see incredible changes. Here are three examples:
Example 1: A search engine
Google.com gets about 100 million page impressions per day right now. With a penny per page, Google would make $1 million a day, or something like $350 million per year.
Without a penny per page, Google will still improve, but at a dramatically slower pace. There needs to be money to support the development of new features, and right now the money is not there in any significant way. So it's a trade-off: "Free" is probably one of the most beloved words in the English language; but by not paying Google when we use it, we're effectively denying ourselves the increased benefits that our payments would bring about.
Example 2: Any content Web site
Imagine what a penny per page would do to:
Example 3: Any Expert
Imagine a person who has an area of expertise. The person might know anything, from financial analysis to model railroad landscape design to electric guitar repair -- it doesn't really matter. Right now, the person has two options:
With a penny per page, millions of people around the world would be able to publish information AND make money. Conventional publishers would also have a reason to bring existing books over to the Web. The pool of information on the Web will explode.
[* A very common question -- why does the author of a book get only 10%? It is not because publishers are "evil" or "greedy", but instead because of the way book publishing works. To edit, lay out, print (thousands of copies), warehouse, market and distribute a book, the minimum amount a publisher will spend is approximately $100,000. Many books cost much more than that to arrive on the bookstore shelf. That is a very steep cost of entry per title.
Out of every 10 books published, as a general rule, less than half are able to dig themselves out of the $100,000 hole. The publisher eats all of those costs and still pays royalties, in the hope that several books out of every 10 will make a profit. After all of the costs are taken into account, all that's left is about 10% to pay to the authors and still maintain a profitable publishing business.]
Resonance
There are many, many Web sites that started out as a hobby and then made it big. What made them big is a process called resonance. When a Web site resonates, it can grow a very large audience very quickly. Resonance comes from normal human behavior. People tend to do two things when they find a Web site they like: They tend to come back, and they tend to tell their friends. The retention and expansion of audience is resonance.
Napster, of course, is the poster child for resonance. When people found Napster there was a huge probability that they'd come back, and a huge probability that they'd tell their friends and that their friends would come back. So Napster went from zero to 50 million visitors per month in something like six months.
The Web allows any individual or business on the planet to create a Web site and reach a worldwide audience. Anyone can create something, upload it to the Web, and the entire world can see it. Any 10-year-old can learn the technology, and anyone with a computer has the tools, so there is no barrier to entry. At no time in the history of the world has there been this sort of freedom of speech or this sort of worldwide voice for this many individuals. The access and potential is virtually unlimited; resonance then picks the winners.
The Web allows true individual publishing and planet-spanning distribution. What is missing right now is any way for an individual or business to derive value from an innovative Web idea. With a penny per page, we would have a self-propagating combination of business and creativity: instant publishing with instant revenue for any individual who can access the Web.
Under the penny-per-page model, millions of businesses and individuals can try millions of ideas, and if they are successful they will directly and immediately benefit. They do not have to seek venture capital. They do not have to experiment with and invent convoluted business models. They do not have to hire large sales forces to sell ads.
What this means is that the richness and diversity of content and services on the Web will explode. In the process, individual people and businesses will, for the first time, be able to directly benefit from their work. A person with a great idea will be able to make a significant amount of money almost instantly because of resonance.
Changing the Culture
What will people think about the idea of paying a penny per page? Won't people complain about having to pay for the Web?
Anyone who accesses the Web from home pays a monthly fee to an ISP for the privilege. An AOL account is typical, and it costs about $20 a month. MSN and Earthlink are about the same. People in the United States are already paying for the Web; but the Web sites -- the reason people log on in the first place -- get none of it.
Will people complain about paying slightly more per month under the penny per page model? Right now people pay for cable TV, newspapers, magazines, telephone calls, directory assistance, video tapes, movie tickets, DVDs, pay-per-view, CDs, books, ring tones, 900 services, college courses...
The fact that they don't pay for Web content is a historic anomaly. The benefits to be reaped by paying a very small amount of money for Web content are gigantic. Right now, people are actively denying themselves many of the most amazing things that the Web could provide because of the "totally free" World Wide Web.
One of the reasons for choosing a simple approach like a penny per page is because it is such a small amount of money. If the "Give a Penny, Take a Penny" phenomenon is any indication, people don't seem to care about their pennies at all. Imagine what it would be like to actually get some value out of a penny. Here are four examples to illustrate the point:
It's also not going to add up to very much per month. People who log on to check stock prices, look up the weather, read the top news stories and so on might look at 25 or 50 pages a day. They would pay something between $5 and $15 per month for Web content. But let's also take the worst case scenario. Let's say that you sat in front of your computer 8 hours a day and looked at a new page every two minutes without interruption 20 days per month. That would cost $48 for the month. That is the worst case scenario, and it is unlikely anyone is going to do that. The cost will be minimal for just about everyone.
Getting Started
What is the best way to implement a penny per page? There are three possibilities:
Having the ISPs handle billing would probably be the easiest approach if the ISPs can create a common, fair and uniform model for all customers.
The traditional way to get anything done on the Internet is for the Internet community, in the form of existing standards organizations, to create a standard which is then implemented on a non-profit basis. Alternatively, the top 1,000 or so Web sites, working in unison, could do it. Here's how it could be done:
The sites need to work together. If some sites switch and others don't, you will get the same problem that happens now when a site decides to unilaterally charge for its content. If there is not a uniform and super-simple billing model (so that users get one simple, easy-to-understand bill), the thing just won't work.
That corporation will be able to charge a handling fee on the penny that each page receives. That handling fee should be capped at something like five percent.
The whole process needs to be incredibly simple -- something like the process that lets money flow to sellers at Ebay or Half.com.
An unbiased system likethis with no middlemen would have huge benefits in terms of innovation.
Q & A
Is a penny per page the right amount?
The penny per page approach is extremely easy for everyone to understand. A penny per page does not present a large barrier to the payer, and it pays a nice amount to the Web site. It could be argued that half a penny would work, and so would two pennies. The Internet community can play around with the numbers and decide, and it will likely end up somewhere very close to a penny.
Is charging by the page impression the right unit? Why not charge by the byte?
If you pick bytes, then you will see people bloating images and doing all sorts of other crazy things to inflate their pages.
Won't Web sites chop up their content into a zillion pages if they get a penny per page?
Probably not. Banner ads have already caused as much chopping as we will ever see. If sites chop things up too much, they won't resonate and they'll die out.
Why should pricing be uniform? Shouldn't each site be able to set how much it charges per page?
Maybe, but it complicates things. Say you are looking at a list of pages in Google and you want to click on one. Before you click on it, you have to remember to look closely to make sure that the Web site is not going to charge $100 per page instead of a penny per page. If it's a uniform pricing model, then Iou can click on any page without worrying about it, just like you do today.
What do we do about streaming audio and video, and things like MP3 files?
Streaming video is unique because it consumes significant bandwidth. A 10-minute streaming video at 300Kbps consumes upwards of 20 megabytes of bandwidth and might cost the Web site 10 to 20 cents to send it to the viewer. A pay-per-view model might be the right approach. Or maybe it's a dime per stream. With MP3 files, if artists automatically and directly received a dime every time someone downloaded one of their songs, it would create an unbelievable musical revolution.
What would prevent a site from having a page that pops up 100 new pages when you land on it to ream the unsuspecting visitor out of a dollar?
The billing mechanism should track for and eliminate charges for that, as well as for pages that auto-refresh themselves, error and non-existant pages, pages arrived at by pressing the back button, duplicate pages and so on.
People in the U.S. tend to prefer a flat-rate model to a pay-per-unit model. Could there be a flat-rate model with penny per page?
Probably the easiest way to implement a flat-rate model would be to create a cap. Let's say that the monthly cap were $20 per month. Everyone would know that if they looked at more than 2,000 pages per month, they would pay no more than $20 per month. If they looked at less than 2,000, they would pay only for the pages viewed. For people who hit the cap, the billing model would simply divide the $20 paid by the customer by the number of pages viewed and pay the sites whatever amount that turned out to be per page.
Time for Change
But the biggest difference it would have made is in the number of new Web sites that would appear on the Web. Right now, the number of ideas being implemented is severely constrained because there is no way to make money off of most of them.
The thing to keep in mind during the possible transition is this: Would it be worth a penny to you to look up a phone number you need? Would it be worth a penny to you to get a map to your destination? Would it be worth a penny to you to get the answer to a particular question? A penny is an incredible bargain. The fact that none of us is paying that penny right now is putting a huge damper on Web innovation. A penny per page will bring consistent revenue to the Web, and the change that it will bring will amaze all of us.
Also, do I have to pay a penny for each X-10 popup ad, or other popup sites that I never wanted in the first place?
Wonder why you pay first and not after--nobody says anything??
Television is "free"??
A LOOK INTO THE ABYSS
What Elian Tells Us About Ourselves
By Edward Zehr
"They have become, in the fullest sense of the term, Weimar Republicans."
Oh no, the reader thinks upon seeing the subtitle of this piece, not another article about Elian. But this series of articles is only incidentally about Elian -- it's really about us and what is happening to us. The Elian affair is like a mirror that reflects our hidden face, the one we never identify with ourselves because we always imagine that it belongs to somebody else.
For example, I get e-mail from people who have chanced to read one or more of these articles and drop me a cordial line or two just to let me know what a numbskull I am. After all, the way I tell the story is not the way they have heard it. If my version were correct it would mean that they have been grossly misinformed, and the implications of that are too terrible to contemplate.
It would mean that in order to be properly informed they would have to stop skating over the surface of issues such as these, letting the anchor people do all the heavy lifting, and start doing their own thinking. But thinking can be kind of like work. Besides, a lot of people just don't quite have the hang of it. The raw material required to do one's own thinking consists of facts gathered from a wide variety of sources, not just the one that happens to materialize when the TV set is switched on.
The "facts" presented by the mass media are typically folded into a smarmy batter of tendentious fiction calculated to elicit a response from the viewer that will be useful in advancing the hidden agenda which the presstitutes are paid to promote. The viewer, who does not comprehend that he or she is being manipulated responds emotionally, as though watching a soap opera or a TV series. After all, most people have a lot more experience responding emotionally to TV plots than they have at thinking critically and analytically. The script writer manipulates the emotions of the audience who respond in a predictable fashion. The viewers are being conditioned to react in a certain way. The leap from the semi-conscious emotional response evoked by TV "entertainment" to the conditioned response elicited by the politically motivated propaganda inserted into "news" presentations is a short one.
THE FACE IN THE MIRROR
The black-shirted, brown-shirted and red-banner-waving totalitarians of the twentieth century missed the point on a grand scale. All that rough stuff is really unnecessary in building a totalitarian state. In fact, if overdone, it tends to give the game away. Goebbels was the one who had it right, not Himmler. Concentration camps are a drain on the economy...
Yes
Now, In addition to that, those services will be a propietary "chunk" or large slice of the web, and you will be restricted to inside those areas and sites when you buy your package, with leaving and going to another corporate web costing like the difference in long distance now. Stay inside, it's "local", flat fee, insist on going outside your company's chunk of the web, you will be "roamoing" and charged by the minute or meg or something. think of it as you will be purchasing into some private humongous WAN. Private huge WANS that do everything from voice to surfing, movies, network tlevision type shows, to breaking news to chat to whatever, all on a single private WAN that you pay a flat fee for, maybe 99.99$ a month or something like that. You pay them, they pay the website creators, who work for the corporate WAN, or are allowed to put up content, because the corp thinks it's great, worthwhile to transfer around, worthwhile to offer to their customers.
Imagine-just ferinstance- AOL owning a large chunk of the web,-this is easy to imagine- and limiting people to that "chunk" for a flat fee, but incorporating all the other services at the same time. A whole lot of people would be quite content to completely stay inside that area of the web, it's still huge, tremendous amount of different things to see and do.
Speculation now is this is where microsoft itself is headed, a propietary chunk of the web, where you are forced not only to use their products to access it, but it's also required that content be created and served with their products, so their next step is to drop money into the pipes themselves at some point, and finish walling themselves off or in. A big walled city, but still 'the walls".
I think an arrangement like this is more probable, given the blurring of data transfer, and what it is, it's becoming 'the same thing" almost, instead of rigidly ONLY cable tv or ONLY satellite tv, or ONLY telephony or ONLY casual surfing or ONLY beeper/mesaging hither and yon--I see more package deals being offered, and the profits to be squeezed out there, with the content companies or individuals paying the bandwith transferring companies, a further melding of hosting service and bandwith selling. The bandwith transferring companies will have an incentive to charge "enough" to pay for what they host and transfer, plus make a profit, but not so much as to make people pick another package deal from internet WAN chunk dealer B, or C. It's in their best interest to allow good websites, and to disallow crappy websites, because they can then brag they have "the best internet", almost like pizza wars-"hey, our pizza has ten toppings and double cheese, the other guys only have single cheese". Look how much it's changed in just wireless phone lately.
The one glaringly obvious problem with penny a page is-what's a page! Really, what's a page? I guess a PDF page might come the closest to a standard that's out there now, but still, like, where's a size that any two people are going to agree on?
One other solution is distributed computing, everyone is a server and a client, this is the 'co-op" methiod of internetting, a la gneutella or napster, eliminate a ton of middlemen that way, drop the prices a lot.
There's still tons of empty pipe out there, not even being used, it's not bandwith, it's the concentrations required for the much smaller amounts of servers compared to clients, those are the expensive chokepoints now, not the big lines going every place, and the server-computers all have to be much more sophisticated and dedicated, got to have fuzzy dice and turbochargers and liquid nitrogen cooling and tons of blinking lights and arcane runic symbols so they cost more, they need flocks of full-time expensive IT guys hanging about "upgrading" and "patching" and engaging in OS flamewars on the company nickel at strange forums,heh, and who have to then have offices who then need buildings to put offices in, and etc,etc, etc, then they have to go to conventions and buy brand new stuff because the old stuff is 1 horsepower not big enough anymore, and on and on. There's the real expense of the internet. Hey, here's a thought-MOVE THE DANG INTERNET OUT OF SAN FRANCISO. it costs like a mint for everything there, any rweason why the bulk of the net has to be there? couldn't the internet price be cut in half by a diaspora out to flyiver country all over? i thoiought the net was so you could be anyplace and go anywhere electronicaly, so the main guys all pushing that idea all live in 6 counties in california, and artifficially up the prices of office space and living and 5 buck cups of coffee, and etc, when the sane exact stuff could be done over here in bubba ville for 50 cents? There's a thought right there..
Now the everyone is a server idea is cool, if the bulk of the net could be hosted where the idea came from, on peecees, then people who liked it allowed that page or whatever to also be hosted on whomever else liked it, and vicey versa, all over, spreading the bandwith hit out a lot more, un-choking the choke points, it would eliminate a lot of that, and billions in overhead. Obviously, it would never completely eliminate dedicated huge server farms for a lot of apps and businesses, but for the bulk of the casual web it would work pretty well, given that there was an agreement to actually distribute operating systems and software that was really secure and easy to use and not this nightmare crapola that's out there now, and a way to really have an address that worked, even on a dialup connection. .
Fun ideas, though. If I could be guaranteed ZERO ads, fast transfer, great content, that would be worth 40$ a month to me, I surf a lot. I'd pay more for high speed, talking about at rural dialup speed, so that would be double the 20 clams I pay now. That could work. As it is, I see zero ads, because I keep images and scripting turned OFF, ha!
Now if they do this penny a page deal,and it's the bigfat lie like cable TV turned out to be, no thankee. Just as many ads on cable as free over the air tv, and they lied about it bigtime back in the early 70's when it was being pushed, when they made their billions in esclusive local monopoly contracts, and they claimed back then that most of the content was going to be ad-free, with the profits made at the flat sign up rate. That morphed pretty quickly. if I have to pay a penny a page, plus it's the same old zillion stoopid ads, plus it's scripted and buggy and insecure as heck, no thanks, I'll stick with the way it is now, closer to e-anarchy.
You're right, we're already paying to view these pages. Add what amounts to a surcharge to that and I'll just opt to get more work (or play) done every day instead, lol.
And I'll bet that I'd be in the company of millions when I did so.
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