by Mike Masnick
Fri, Nov 11th 2011 4:05pm
by Mike Masnick
Fri, Jun 11th 2010 6:41am
from the partly-right dept
He's absolutely right that people have paid for access (a scarce good) and that getting people to pay for access is a business model that works (though, hardly the only content-based business model). However, the problem is that I think he underplays the difference between access and content, such that many people will hear his talk and assume that "paying for access" really means "putting up an artificial paywall that forces people to pay." The mistake there is in not realizing where the real separation is between access and content.
People pay for their broadband connections. That's access. People pay for their mobile phone data plans. That's access. Those are scarcities. Putting up a paywall or a micropayment system is not paying for access. It's trying to set an arbitrary limit on content. Unfortunately, McQuivey's "example" of paying for access is a bit misleading. He talks about Netflix's streaming offering. But he ignores that most of those subscribers were originally paying for DVDs, and the streaming is a throw-in. Where the real "access" that Netflix has tapped into lies in its ability to easily and conveniently get movies onto your TV. That's what people are paying for. It used to be DVDs (and still is for many Netflix customers), and more recently it includes integrated streaming. But that could come under pressure from other forms of easy and convenient access to the same content, so Netflix will need to continue upping its game.
So while I agree with McQuivey, and have said similar things in the past, I think he underplays how difficult it is to be in a position where you really can charge for "access." There really aren't that many players who can do so legitimately. I worry that many people will view this video and jump to the wrong conclusion, and try to artificially block access in order to get people to pay.
by Mike Masnick
Wed, Feb 17th 2010 10:14am
from the false-hopes dept
But, figuring out those business models aren't easy, and for those who grew up in a world of artificial scarcity, there's always this vague hope that, magically, people will start paying again. Believers in this fantasy were pretty happy to gloat and point us to a recent report from Nielsen, concerning some survey data on whether or not people would pay for content. The suggestion passed along was that this shows that we're crazy for questioning whether or not people will actually pay for content online, as seen in the following chart, released by Nielsen plotting the data:
But, even beyond that, these numbers don't actually look all that good for the folks who claim that there's some way to suddenly get people to start paying for this stuff, for a whole variety of reasons. First, this is survey data, which is notoriously bad at getting people to accurately predict if they would pay for something. You can lop off a big percentage of people who say they would pay, because when asked, lots of people who would never actually pay for something will say they will pay. I won't even bother to estimate that amount, but I would argue it's a significant chunk of those orange bars.
However, even if we grant the premise that these people potentially would pay, it still doesn't support the "if we just did x, they'll pay" camp (where x is anything from "shut down The Pirate Bay" to "kicked file sharers off the internet" to "passed three strikes legislation" to "increased enforcement" to "beefed up copyright laws" etc.). And the reason for that is when you look at how many people are actually paying. That is, it's really those tiny blue percentages that matter here. And those are tiny across the board -- and the reason isn't copyright infringement or unauthorized file access, but the fact that the producers of the content haven't figured out how to give most people a true reason to buy. They're used to a world where you didn't need to figure out a business model, but artificial scarcities and a small number of gatekeepers were able to make it so people had little choice.
But these days, with widespread abundance in content -- which is growing every day -- the era of artificial scarcities is rapidly ending, and anyone who wants to build a 21st century business model needs to start looking for real scarcities that offer real value, not artificial scarcities that seek to limit value while boosting price. So, yes, there's some interesting data here, but it's not the savior of those who think there's a business model in selling content directly. It really says the exact opposite.