What is Internet Content Worth?

LockerGnome reader and viewer Gary writes:

I watch your TLDRs and vlogs because you give a unique spin to the tech world, which is quite rare these days.

I grew up with technology that, to me, was fun. We had to battle to get Windows 3.1 to connect to the outside world or try to get the IRQs right on our NE2000 LAN cards. The true soul of technology, to make our lives and tasks easier, seems to have been lost to the frantic battle between fanboys entrenched on either side and moronic “social media” outlets that have made every man and his/her dog an “Internet expert” opening channels where every technology company has become an advertisement house, using their devices as ad delivery or data loggers… the old Trojan horse trick!

Do you think your business approach of being ad-sponsored is being saturated to the point where people become less connected to the content and what the Internet was pioneered to do: connect people to enhance the human race (see CERN)?

Technology saddens me these days… the promise of being able to do real good in the world has been lost to try to monetize something that shouldn’t — and wasn’t designed to — be monetized.

The Internet is not unique in being flooded with advertising. When you pay to see a movie, it starts with advertisements. Imagine a NASCAR driver and automobile without advertising patches. Why are stadiums named after businesses? The simple answer is that advertising works.

Consider some background facts and then I will attempt to answer your question, “Do you think your business approach of being ad-sponsored is being saturated…?”

What is Internet Content Worth?In the business world, evolutionary pressure is great. If a business practice does not produce positive results, it dies. We know advertising works because it has not died off. We complain about excess advertising, but we use it to make buying decisions. You are probably reading this and thinking you are immune to the lures of advertising. Other people fall for sales pitches, but you are more rational in your decision making. Since everyone feels that way, and since advertising grows, and since you have more possessions than you need (yes, you do), claiming immunity is bogus.

What is the optimum ratio of information to advertising (assuming there is a difference)? We cannot answer that for the Internet because it is still relatively immature, but print newspapers have been around for a long time. The fraction of a newspaper given to advertising ranges from over 90% for freely distributed ones to about 20% for professional newspapers. We readers of traditional newspapers blithely glide over ads without thinking we have read them, but they work. Television and radio advertising is mature and seems to hover around 30% of airtime (e.g., a one-hour show has 42 minutes of non-advertising content — you have time to go to the bathroom, get a pizza, etc.). Significantly, this is about double what it was 50 years ago.

What are alternatives to content delivery sponsored by advertising? We could have government support, or donations — both of which are used by public radio and television. We could have volunteers post things for free and live in a YouTube world (neither YouTube nor its content is ad-free). But even with government support, viewers usually end up paying as in Britain, where a special tax is imposed. Less obvious is the payment in loss of variety and freedom.

Gary, we are almost ready to attack your question, but first consider sources of information as a product. When automobiles were new, small companies sprang up to take advantage of the new technology. I believe there were about 2000 Marques at one time, and they quickly faded away to a few winners. For a long time in America, we had the big three; then came a revolution from foreign competition with overkill and we were re-flooded with brands. Now we have returned to a more practical adjustment. Another example: when skateboarding became popular, hundreds of companies quickly formed to ride that wave. There are not so many now.

When the cost of distributing information fell to nothing compared to newspapers, everyone with an opinion tried to become the CBS of the Internet. Advertising and providers proliferated. The result is noise. When everyone in a crowded room shouts, little communication takes place. In most crowds, after an adjustment period, smaller groups informally gather with a few members carrying most of the conversation. Others listen. That increases communication. The Internet is undergoing a similar process.

Now I can answer your question. Yes, the business approach of ad-sponsorship is being saturated. That should be expected. By definition of survival, ad-sponsorship enhances humanity — otherwise it would die out. It is self-adjusting. Saturation by new technology is part of the normal dynamics of technological change. We should expect further changes as the medium matures. Based on history, the number of content providers will decrease and the fraction of bandwidth devoted to advertising will increase until either a new technology disturbs things (as television did to radio and newspapers, and cable later did to television) or people just get tired of the novelty.

In the meanwhile, providers such as LockerGnome struggle to predict where things are going and adjust business models to fit the times while enhancing the human race. The probability that LockerGnome will survive as a stand-alone entity is small, but it has beaten the odds by being nimble. GM also beat the odds for a long time, but even it had to adjust. LockerGnome recognizes the tasks ahead and intends to adapt and prevail.

As to you feeling saddened, you are looking at the glass as half empty. In truth, the Internet is right up there with fire and the wheel in enhancing human life, and it is getting better all the time.

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Chris has consistently expressed his convictions and visions outright, supplying practical information to targeted audiences: media agencies, business owners, technology consumers, software and hardware professionals, et al. He remains a passionate personality in the tech community-at-large. He's a geek.