
Content Is King (1996) - Xunxi
http://web.archive.org/web/20010126005200/http:/www.microsoft.com/billgates/columns/1996essay/essay960103.asp
======
KenanSulayman
> For the Internet to thrive, content providers must be paid for their work.
> The long-term prospects are good, but I expect a lot of disappointment in
> the short-term as content companies struggle to make money through
> advertising or subscriptions. It isn't working yet, and it may not for some
> time.

And that was back in 1996..

~~~
bernardlunn
22 years later, we still don’t have a good way to pay for content!

~~~
soneil
I think we do - advertising is still a perfectly legitimate way to pay for
'free' content., plus subscriptions where they make sense.

The current problem isn't that we can't or won't pay, or we can't or won't
accept advertising. It's that each generation of adtech becomes more and more
user-hostile until we're forced to fight back.

So the popup became the pop-under, and devolved into popup bombs until
browsers were forced to act. Tracking has gone from associating an ad-view
with its context, to growing that context across their entire ad network until
they've profiled exactly what demographics and markets you fit into, and
browsers are starting to fight back.

It's not that we won't accept advertising. It's that advertising is in a
constant race to the bottom. And I think - I hope - we're about hitting the
bottom of the current generation of adtech.

~~~
dredmorbius
No, advertising is inherently problematic, and always has been.

* It's intrusive.

* It's distracting.

* It promotes a host of anti-usability features

* It's creepy, and you're creeping me out.

* Ads themselves price-discriminate -- though how and when I can never be certain

* The mechanisms of advertising networks pose security issues

* The goods and services which are most highly advertised are those which I'm least inclined to buy.

* It's not relevant.

[https://old.reddit.com/r/dredmorbius/comments/24107v/forbes_...](https://old.reddit.com/r/dredmorbius/comments/24107v/forbes_asks_why_do_programmers_hate_advertising/)

Adding to the above, from four years ago, I've since realised that
advertising:

* Promotes crap content.

* Kills quality content.

* Undermines truth and liberal democracy. Supports and sustains demagoguery, fascism, and institutional oppression.

See Dwight McDonald, "A Theory of Mass Culturei"
([https://is.muni.cz/el/1421/jaro2008/ESB032/um/5136660/MacDon...](https://is.muni.cz/el/1421/jaro2008/ESB032/um/5136660/MacDonald_-
_A_Theory_of_Mass_Culture.pdf)) (1953) (PDF), Hannah Arendt, _The Origins of
Totaltarianism
([http://gen.lib.rus.ec/search.php?req=arendt%20origins%20tota...](http://gen.lib.rus.ec/search.php?req=arendt%20origins%20totalitarianism)),
and Gerry Mander's _Four Arguments for the Elimination of Television*
([http://gen.lib.rus.ec/search.php?req=Mander+arguments+elimin...](http://gen.lib.rus.ec/search.php?req=Mander+arguments+elimination+television&open=0&res=25&view=simple&phrase=1&column=def)),
for starters.

Hamilton Holt's excellent 1909 lecture, "Commercialism and Journalism",
available from the Internet Archive, addresses most of the modern complaints
against advertising, at a time when it was just beginning to massively re-
shape (and, to be fair, enable) the modern media landscape.

[https://archive.org/details/commercialismjou00holt](https://archive.org/details/commercialismjou00holt)

------
elvinyung
The marketplace of ideas idealism is interesting. It seems to crop up every
now and then as the aspirational model for how ideas should propagate
especially with technological mediation. But I'm not sure how valid it is,
given that the reasoning is by definition circular (that the best idea is the
most popular and the most popular idea is the best).

But either way, maybe the world _would_ be better if content wasn't free, if
it wasn't trivial and inexpensive to artificially inflate access to attention.
As it stands our "marketplace of ideas" is at best a market for lemons.

When did we go from the shiny, utopian visions to this advert-overloaded
cyberpunk future of attention hackers [1] and panoptic sousveillance?

[1] [https://points.datasociety.net/hacking-the-attention-
economy...](https://points.datasociety.net/hacking-the-attention-
economy-9fa1daca7a37)

------
munfred
> A major reason paying for content doesn't work very well yet is that it's
> not practical to charge small amounts. The cost and hassle of electronic
> transactions makes it impractical to charge less than a fairly high
> subscription rate.

> But within a year the mechanisms will be in place that allow content
> providers to charge just a cent or a few cents for information. If you
> decide to visit a page that costs a nickel, you won't be writing a check or
> getting a bill in the mail for a nickel. You'll just click on what you want,
> knowing you'll be charged a nickel on an aggregated basis.

> This technology will liberate publishers to charge small amounts of money,
> in the hope of attracting wide audiences.

> Those who succeed will propel the Internet forward as a marketplace of
> ideas, experiences, and products-a marketplace of content.

I wonder what happened to the future of 1996..

~~~
qbrass
PayPal and credit card companies made paying online easier than the various
micro-payment companies could, but weren't interested in the same business
model.

~~~
tannhaeuser
There's still the model of sending content via MMS to smart phones (or even
dumb phones) with carrier billing. Yes the one that has been used for selling
custom ringtones in the 1990s. With Android's stagefreight bug a couple years
ago Google managed to put it out of consideration such that people must go to
app stores instead. But carrier billing has always been the obvious native
payment method on the mobile web where telcos already have your details and a
customer relationship.

------
MarkMc
"But to be successful online, a magazine can't just take what it has in print
and move it to the electronic realm. There isn't enough depth or interactivity
in print content to overcome the drawbacks of the online medium.

If people are to be expected to put up with turning on a computer to read a
screen, they must be rewarded with deep and extremely up-to-date information
that they can explore at will. They need to have audio, and possibly video.
They need an opportunity for personal involvement that goes far beyond that
offered through the letters-to-the-editor pages of print magazines."

Bill clearly didn't consider that the 'drawbacks of the online medium' would
be eliminated by everyone having a computer in their pocket. I pay for online-
only subscriptions to The Economist and The New York Times, and these apps are
essentially just electronic copies of their paper cousins.

Bill also seems to have missed the possibility of _not_ producing content but
instead acting as a platform for others to produce content. The network
effects of such platforms have led to wildly profitable enterprises such as
YouTube, Facebook and Spotify. Given Microsoft's own network effects, it's
strange that Bill didn't consider this angle.

~~~
majani
Before search engines and open source CMSes were widely adopted, it was
reasonable to expect that basic news sites were going to be insanely valuable.
The barriers to entry were high but the reward was now exponentially higher
with the global reach potential

------
mehrdadn
> A major reason paying for content doesn't work very well yet is that it's
> not practical to charge small amounts. The cost and hassle of electronic
> transactions makes it impractical to charge less than a fairly high
> subscription rate.

> But within a year the mechanisms will be in place that allow content
> providers to charge just a cent or a few cents for information. If you
> decide to visit a page that costs a nickel, you won't be writing a check or
> getting a bill in the mail for a nickel. You'll just click on what you want,
> knowing you'll be charged a nickel on an aggregated basis.

To think this practice still isn't widespread 22 years later...!

~~~
anonymous5133
It is more possible now to do though thanks to cryptocurrencies.

The brave browser in particular has built in micropayments feature.

[https://brave.com/introducing-brave-payments/](https://brave.com/introducing-
brave-payments/)

~~~
jhwang5
Cryptocurrencies don't solve practically any problem that a MYSQL server can't
solve

~~~
swift532
They're trustless and borderless, and if something like Lightning Network
works out, would be a great tool for microtransactions like the ones mentioned
here.

It'd be much easier to get a bunch of sites to use a decentralized currency
than have someone's payment service on a "MySQL server", not to mention that
cryptocurrencies have a natural equilibrium for payment fees, while such a
service would only be looking to squeeze out as much fees as possible from
this theoretical new way of paying for content.

------
joak
This was before p2p and user contributed content

alternate article: Content is not King

[https://news.ycombinator.com/item?id=18050621](https://news.ycombinator.com/item?id=18050621)

~~~
dmoy
Yup I find the odlyzko article much more informative and prescient.

See for example recent article on front page here yesterday(?) about the music
industry now making a fraction of its previous money. Or even the old numbers
paling in comaprison to Google Facebook Amazon - information, social
connection, and buying shit.

The content industry is just not that big, $$-wise, and never has been. Humans
are social animals, it wins out.

------
Joeboy
At any given moment there usually seem to be one or two New York Times
articles on the HN front page, which I assume means a reasonable proportion of
us are subscribers.

I don't really see what's wrong with the subscription / paywall model, other
than it means letting go of "information wants to be free" dogma and admitting
Rupert Murdoch was right about something. At this point it seems preferable to
the ad-driven business model.

~~~
Donzo
One issue that is not addressed by the subscription model is the subsidizing
effect that the ad-based model has:

The finance professional who lives in New York has very valuable page views.
The African school girl does not. Yet, through advertising their values are
averaged. The affluent subsidize the poor without even knowing it.

Putting content behind a pay-wall reduces this effect and creates an
informational disparity that will only broaden the gap of equality between the
two.

The New York finance professional just has to decide that the subscription is
"worth" paying. The African school girl cannot make this same decision.

~~~
TeMPOraL
For me this is the _only_ positive aspect of our ad-based Internet. It allows
people with no money or means to use it - be it a poor African girl, or just
me when I was a kid - to access the same information everyone else can. If we
could solve that somehow, then killing off Internet advertising would
immediately improve the world.

~~~
TimJYoung
Libraries solve that need, so if there's a way to help fund that type of
initiative, especially if it already exists, we should all promote it
aggressively.

------
eortiz
Not the exact topic, but related - a recent opinion I blogged about, related
to recent experiences working news-media --
[https://weblog.cenriqueortiz.com/general/2018/08/14/in-
media...](https://weblog.cenriqueortiz.com/general/2018/08/14/in-media-and-
journalism-content-is-king-but/)

------
anonu
Remarkably prescient

------
dredmorbius
The more often I see this piece, the more I'm impressed by how poorly it's
aged, the errors it contains, and how much ignorance and/or covert attempts at
media monopolisation it reveals.

Beginning with the title: though often attributed to Gates, the phrase
probably originates with Viacom's Sumner Redstone, a man whose wealth and
fortune came not from content by by distribution -- control over content.

[https://www.youtube.com/watch?v=kums8SGXHoo](https://www.youtube.com/watch?v=kums8SGXHoo)

[http://www.bu.edu/buniverse/view/?v=a0R7b5b](http://www.bu.edu/buniverse/view/?v=a0R7b5b)

Information and markets are a poor match. Market pricing works best where
goods are uniform (either individually or on aggregate average), their
qualities are readily determined (or again tend to average out well), where
the fixed costs of production are low and marginal costs of production high
(relative to one another), and externalities, both positive and negative, are
small relative to market price.

Information goods violate virtually all these assumptions.

* Quality is highly variable.

* Quality assessment is difficult, and often frustrated by other factors.

* Quality isn't, and often cannot, be known in advance.

* Variance of individual instances is high enough that averages rarely suffice.

* Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.

* Variable costs of production (e.g., publication) are low.

* Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", advertising, or weapons research.

David Brin is amongst those who've argued for micropayments. He, along with
others, is wrong.

[https://old.reddit.com/r/dredmorbius/comments/4r683b/repudia...](https://old.reddit.com/r/dredmorbius/comments/4r683b/repudiation_as_the_micropayments_killer_feature/)

Nick Szabo, Clay Shirky, and Andrew Odlyzko have all argued this point better
than I.

 _Successful_ media payment systems tend to be:

* Subscription or serial based.

* Bundle based.

* Patronage based.

(That is: they look a hell of a lot like a Viacom cable or Microsoft Office
365 service plan, not a micropayments scheme.)

The idea that content creators should be paid _by the piece_ is another
frequently-iterated myth. The purpose of compensation _is to enable existence_
, and the intermittent and happenstance reward of creative activity is
notorious for failing at this. Historically, solutions have tended toward
patronage, independent wealth, control over a production venue (as with
Shakespeare and his New Globe Theatre), or other forms of live performance in
which the ticket booth serves as a literal gateway between audience and
performer at which a toll may be levied. More recently, the notion of
generally-supported creativity through public support, paid in taxes, has come
into vogue, as with the UK's BBC and a small fraction of US works.

Adam Smith argued against piecework:

 _Workmen, on the contrary, when they are liberally paid by the piece, are
very apt to overwork themselves, and to ruin their health and constitution in
a few years.... We do not reckon our soldiers the most industrious set of
people among us. Yet when soldiers have been employed in some particular sorts
of work, and liberally paid by the piece, their officers have frequently been
obliged to stipulate with the undertaker, that they should not be allowed to
earn above a certain sum every day, according to the rate at which they were
paid. Till this stipulation was made, mutual emulation and the desire of
greater gain frequently prompted them to overwork themselves, and to hurt
their health by excessive labour._

[https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...](https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/Chapter_8)

The notion that improved network speeds has been soundly refuted by
experience. It turns out that William Stanley Jevons was right: reducings
costs of a good or service (here, the time cost of information transfer) _only
serves to increase the consumption (or production) of that good._ Or, in this
case, bad. Today's webpages rival Gates's 1990s-era operating systems in
_both_ data throw-weights _and_ capabilities as malware-distribution and
surveillance-enabling systems.

[http://idlewords.com/talks/website_obesity.htm](http://idlewords.com/talks/website_obesity.htm)

If you want to gain something from this essay, invert it completely.

