May 7th, 2006
What If No One Will Pay For Content?
Randall Stross, in a Times article, wonders who will pay for TV now that ad-skipping DVRs and on-demand broadband video have destroyed TV’s mass media advertising model. I wonder whether late 20th-century TV content production will follow the same path as early 20th-century transatlantic ocean travel, milk delivery, and buggy whip manufacturing — marginalized or completely displaced by new technologies.
If the digital generation is content to entertain themselves with amateur (i.e. user-generated) video on YouTube, why should there be a business around expensively produced video content? The economics of mass media advertising that supported the TV content production and distribution business have ceased to function, destroyed by technology that has reduced the cost of production and distribution to near zero, making the old economics untenable.
I’ll return to my favorite George Will quote:
In the late 1850s, American cotton was king, feeding the mills of England, but on a tonnage basis, America’s second largest export was…ice. Blocks of it were sawed from New England’s ponds and shipped, insulated under sawdust, to warm climes as distant as Calcutta. People probably thought that would go on forever. Nothing does.
TV studios and networks assumed that their business would last forever. But nothing does.
The real question is not who will pay for TV — it’s whether anyone will pay for the creation of any content?
What if dollars have no place in the new economics of content?
In a WSJ cyber-dialogue with Vint Cerg, Esther Dyson was channeling Michael Goldhaber and managed to crystalize for me (finally) the key insight of media 2.0:
…attention has its own intrinsic value, independent of money. People go on the Web in search of attention; they don’t want to give it as much as get it.
This is a blazing, head-spinning insight.
In media 1.0, brands paid for the attention that media companies gathered by offering people news and entertainment (e.g. TV) in exchange for their attention. In media 2.0, people are more likely to give their attention in exchange for OTHER PEOPLE’S ATTENTION.
This is why MySpace can’t effectively monetize its 70 million users through advertising — people use MySpace not to GIVE their attention to something that is entertaining or informative (which could thus be sold to advertisers) but rather to GET attention from other users. Why is it so appealing to MySpace users to be able to post messages publicly on other users’ sites? Because they can GET attention as a function of GIVING it.
This make perfect sense in a world of participatory media — the value flow has reversed itself. MySpace can’t sell attention to advertisers because the site itself HAS NONE. Nobody pays attention to MySpace — users pay attention to each other, and compete for each other’s attention — it’s as if the site itself doesn’t exist.
You see the same phenomenon in blogging — blogging is not a business in the traditional sense because most people do it for the attention, not because they believe there’s any financial reward.
What if the economics of media in the 21st century begin to look like the economics of poetry in the 20th century? — Lot’s of people do it for their own personal gratification, but nobody makes any money from it.
Topics: Blogging | Business Models | Media Economics | MySpace | Technology | Web 2.0
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what if you were a media company selling products to increase someone’s influence?
brave new films.
i almost never plug, but there are some interesting things around what we’re doing:
1. we just finished an online fundraising campaign for our next film, iraq for sale. about 3000 people donated because they want to use the film to bring attention to something they feel is critically important. and we put their names in the credits.
2. those same people will host (mostly free) screenings to generate attention when the film comes out for the cause, their organizations, and themselves.
3. a lot of our sales are now bulk orders (we offer a discounted five pack of the walmart movie) for people to give to other people they know.
The solution is obvious. Not oh-me-oh-my-wring-hands-my-god-what-is-to-become-of-it-all. But rather, business models will adapt, and are already adapting.
Rather than 30-second ads, there will be more product placements.
Licensing may be more prominent.
Direct-DVD markets may become more important.
None of this has anything to do with unpaid freelancers, I mean vanity press, umm, user-exploitable content …
Scott, great post filled with lots of excellent thoughts. I think that when it comes to networks within new media we’re seeing a significant change with respect to “value”. You touch on it here:
The first step in personal value creation, which is the fundamental building block for new media networks (and the keystone of a networks value), is the potential promise that these networks offer the user.
In the case of MySpace the network offers numerous (user specific) potential promises and you are correct when you say that users “GET attention as a function of GIVING it”.
Users are creating media via MySpace because MySpace offers them the potential: the possibility of popularity; the possibility of romance; the possibility of fame; …
When you build a network that facilitates users GETTING attention you have to accept the role of a host at a party - ensuring that everyone has enough to eat, to drink, that the music is well received, and on and on.
MySpace only exists to ensure that the users continue to find a potential benefit in using MySpace to GET attention. That’s why new networks need to focus on maintaining potential promises, a difficult challenge because of the sociological aspect.
[…] Scott Karp from Publishing 2.0 asks, “What If No One Will Pay For Content?” (related to video/TV content, but it could easily apply to print/radio/web content also): This make perfect sense in a world of participatory media  the value flow has reversed itself. MySpace can’t sell attention to advertisers because the site itself HAS NONE. Nobody pays attention to MySpace  users pay attention to each other, and compete for each other’s attention  it’s as if the site itself doesn’t exist. […]
Very good point Scott, I tend to agree, but you took a restricted definition of Web 2.0 (some are not purely based on community chat rooms right?). We should keep in mind that many users are passive readers even in 2.0 sites. Being “active” is not a full time job.
I think your point is helpful to understand why blog hosting isn’t the Saint Graal for professional medias. Most of them failed to build bridges between editorial contents and communities and keep the revenue streams separated. Example: NYtimes and About.com
I have to agree. Blogging is inning one, but the math will never be what News Corp and other old media want or think it will be.
The money is in the tools people will pay for to get attention.
If I wanted to look at advertising billboards I go to Times square, not, golf.com or thestreet.com or all the other crap big media turns their acquisitions into.
I love the thoughts here and had to comment.
Jim, more power to you.
Seth, don’t you know that I wring my hands just to yank your chain? But seriously, do you really think there are enough dollars in product placement to fund the TV content engine as we know it? The only reason content licensing works is because the ad supported audience for that content gives it value — take away the ad-supported audience, and you’ll have just as good a chance licensing amateur content from YouTube. ABC’s iTunes experiment is far mare significant than their online ad-based experiment — if people won’t pay for thing itself, then there will be no economic rationale for producing it.
Great post and it points to the need for the norgs conversation I’m part of.
Forget TV content - how about funding quality journalism in the future?
I tend to think along the lines of Seth, but that’s because I’m a natural born optimist. A prediction, further in this thread someone will mention ‘micropayments’….
It’s always easy to predict the end of the world. It shakes up the rubes.
But, very simple answer: Who said that if ads aren’t in 30 second separate spots, they can no longer exist? What’s a product-placement but an integrated ad? Think of NASCAR, where the cars and the drivers are billboards. Maybe there will be sponsorship deals - buy a mega-placement for episode X, and episode X revolves around the product. Comparative placement - not only does the hero use X, but the villian uses Y! And that’s just me musing.
Frankly, this sentence “If the digital generation is content to entertain themselves with amateur (i.e. user-generated) video on YouTube …” strikes me as silly link-baiting. Home movies didn’t kill Hollywood, even if families found making their own videos of their kids and their vacations to be fun.
This has gotten me thinking that “second life” is the ideal place for advertising now. Especially for luxury brands: make it easier in a virtual world to taste luxury (though not too easy/cheap, as it wouldn’t be luxury anymore).
Scott Karp
[…] Update: Empfehlen tue ich den Artikel Web 2.0 und die Ökonomie der Aufmerksamkeit, der über einen entsprechenden Artikel auf Wall Street Journal sinniert. Siehe auch seine Quellverweise zu Rough Type (Selling Ourselves, The Great Seduction (the metaphysics of attention) und Publishing 2.0 (What If No One Will Pay For Content?). Passt wunderbar ins Thema. Artikel abgelegt unter: […]
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[…] Scott Karp: What If No One Will Pay For Content? […]
[…] There’s a damn interesting article over on Publishing 2.0, entitled, “What If No One Will Pay For Content?.” Looking at MySpace, YouTube, the decline of TV advertising, and the rise of blogs, Scott Karp asks, “What if the economics of media in the 21st century begin to look like the economics of poetry in the 20th century?  Lot’s of people do it for their own personal gratification, but nobody makes any money from it.” Tags […]
Scott, this is really, really good stuff. Thanks for bringing a lot of thoughts together and doing it so clearly. One of the interesting developments to watch will be what happens to well-known “content producers.” I’m thinking of journalists, writers, editors, broadcasters, interviewers, artists, singers, etc. Since the creation of mass media (with the printing press) they have been tied economically to the big distributors (who own the presses or the transmitters).
We’re already seeing those ties break down at the margins. Some good free-lancers are doing a lot of good work on their own, and getting attention for it. But eventually, the ability of an ABC or a NY Times to hold together a full-time stable of the world’s most talented people will go away. Those big names, I think, will become their own name brands and will become guns for hire in a wide-open marketplace. Those who are really the best will stay on top, and those who aren’t will disappear.
Interesting, too, that Jim should mention media companies “selling products to increase someone’s influence.” I work for a big Old Media company (radio network business) in a new division that’s doing that. We’re using some of the content creators we already have, and focusing on producing media content for niche audiences for clients, instead of producing everything for everyone. Companies and organizations are starting to realize that they can program their *own* channels, and we’re trying to give them a way to do it without hiring a newsroom of their own.
MySpace can’t sell attention to advertisers because the site itself HAS NONE. Nobody pays attention to MySpace  users pay attention to each other, and compete for each other’s attention  it’s as if the site itself doesn’t exist. Readmore
+ Discussion:Publishing 2.0, Screenwerk, PVR Wire, IP Democracy, Todd Chanko, PVRblog, Larry Borsato and MIT Advertising Lab
I’ve tried to make this point before but Nick Carr says it better than I can:
“I fear that to view the attention economy as “more than just a subset of the financial economy” is to misread it, to project on it a yearning for an escape (if only a temporary one) from the consumer culture. There’s no such escape online. When we communicate to promote ourselves, to gain attention, all we are doing is turning ourselves into goods and our communications into advertising. We become salesmen of ourselves, hucksters of the “I.” In peddling our interests, moreover, we also peddle the commodities that give those interests form: songs, videos, and other saleable products. And in tying our interests to our identities, we give marketers the information they need to control those interests and, in the end, those identities. Karp’s wrong to say that MySpace is resistant to advertising. MySpace is nothing but advertising.”
“Far from existing outside the financial economy, the online attention economy is its fulfillment, its perfection. It’s the place where marketing ceases to be marketing and becomes life.”
Die Internet-Koryphäen Esther Dyson und Vint Cerf diskutieren im Wall Street Journal die Zukunft des Internets und dabei besonders das Thema “Ökonomie der Aufmerksamkeit”, und einige Top-Blogger reagieren fleissig darauf (Carr, Keen, Karp). Das Thema wird schon seit einiger Zeit zunehmend heisser: Einige Startups versuchen sogar schon, Aufmerksamkeit als handelbare Ware zu verpacken. Neu ist die Idee der Aufmerksamkeits-Ökonomie beileibe nicht. Der Pionier dieses Konzeptes,
crystallizes some thoughts on the breakdown of mass media. He’s inspired by a NY Times article called “Someone Has to Pay. But Who? And How?” The Times article essentially says that all those major TV shows cost money, and someone will have to pick up the tab if viewers keep
Great article by Scott Karp
What if the advertising is worth watching? What if we actually WANT to see it? Jeff Goodby (the Got Milk Guy) has the right idea . . . “we have a responsibility to make that work in such a way that it is welcomed and not scorned.” An advertising model that actually entertained and informed at the same time, that respected and raised up its audience could work and support the content. Content and advertising could sit side-by-side as partners. It could be done if intelligent minds held control.
Liz, if marketers create their own advertising worth watching, then they are creating “content” — you’re maintaining a distinction without a difference. The marketer’s advertising becomes a destination unto itself, thus obviating the need for other content to act as a medium for the advertising to piggyback on, and thus destroying that business model
Scott Karp:What if dollars have no place in the new economics of content? … In media 1.0, brands paid for the attention that media companies gathered by offering people news and entertainment (e.g. TV) in exchange for their attention. In media 2.0, people are
centralized hub enlisted to parse and catalog the universe of human endeavor.” Tags: interviews culture technology The PingMag Standards Wish-list Five things that need to be standardized across the world. Tags: design lists funny standards What If No One Will Pay For Content? “In media 1.0, brands paid for the attention that media companies gathered by offering people news and entertainment in exchange for their attention. In media 2.0, people are more likely to give their attention in exchange for OTHER PEOPLE’S
[…] UM POST muito interessante: What If No One Will Pay For Content? […]
It seems to me that eventually paying for content by the reader or consumer or TV viewer will go away. But this doesn’t mean that advertising’s ability to pay for content will go away. I expect advertisers will always find ways to get their products in front of people’s faces, even if this requires turning their advertisements into really good content. Advertisers will still pay to better promote these ads, even if they are good enough that many people will go to the advertiser’s Web site on their own to view the ads. There are only so many truly popular products out there. The rest will have to fork out the dough to attract viewers.
That doesn’t mean that who receives this dough will not change. Will radio lose its ad revenue because of satellite ad-free offerings? Maybe. Will newspapers lose it because no one wants to pay for a paper? Yes, but advertisers will still pay to place ads. So newspapers have to adjust their models to live off ad revenue instead of subscription + ad revenue. Will TV lose its advertising? It’s too slick and popular, IMO. But advertisers better wake up to needing to produce better quality. And perhaps TV stations should be a bit more discerning about the ads they accept. Do they veto boring ads? I doubt it. Should they?
Yes, ads can be content and they can be entertaining. But they’re still ads. Content generators who live off advertising revenue should be creative in devising new types of advertising that people don’t mind viewing. Free and not annoying is the way to go. People don’t mind good ads. Think of the Super Bowl.
[…] But really this is why: “MySpace can’t sell attention to advertisers because the site itself HAS NONE. Nobody pays attention to MySpace — users pay attention to each other, and compete for each other’s attention — it’s as if the site itself doesn’t exist.” - Scott Karp […]
that give those interests form: songs, videos, and other saleable products. And in tying our interests to our identities, we give marketers the information they need to control those interests and, in the end, those identities. Karp’s wrong to say that MySpace is resistant to advertising. MySpace is nothing but advertising. …Far from existing outside the financial economy, the online attention economy is its fulfillment, its perfection. It’s the place where marketing ceases to be marketing and becomes life.
Artigo excelente: e se ninguém pagar pelos conteúdos?
I think we’re barking up the wrong tree here.
[…] Blackfriars’ marketing research data about advertising reinforces Scott’s analysis. Advertising spends are going down, and non-traditional marketing spends are going up. Scott’s right: this is a recipe for disaster. And the notes the likely outcome in his followup article, What if no one will pay for content? In that article, he notes that Internet users go to sites like MySpace.com or Flickr.com not to give attention, but to get it. And that says advertising on those sites just is never going to be a good business model for them. […]
about advertising reinforces Scott’s analysis. Advertising spends are going down, and non-traditional marketing spends are going up. Scott’s right: this is a recipe for disaster. And the notes the likely outcome in his followup article, What if no one will pay for content? In that article, he notes that Internet users go to sites like MySpace.com or Flickr.com not to give attention, but to get it. And that says advertising on those sites just is never going to be a good business model for them.
What If No One Will Pay for Content?
of a recent interview that the Wall Street Journal Online recently conducted with Ester Dyson and Vint Cerf on the next ten years of the Internet. ( Here’s the original WSJ article , courtesy of Scott Karp atPublishing 2.0 .) Esther had two comments in particular that caught my eye. First, on the evolution of marketing (and the future of free content): I think you’ll see a fundamental shift in the balance of power towards individuals. Individuals will
[…] http://publishing2.com/2006/05/07/what-if-no-one-will-pay-for-content/ […]
[…] Great post from Scott at Publishing 2.0, providing some insight on attention and "media 2.0". It helps to put into perspective just how inadequate traditional thinking about media can be.…attention has its own intrinsic value, independent of money. People go on the Web in search of attention; they don’t want to give it as much as get it. […]
[…] Andrew Keen amplified on Esther’s comments:Dyson says that the Internet in 2016 will come to reflect our hunger for attention. It will be electronic proof of our existence. To misquote Descartes, "I can be googled, therefore I am." The future of media, therefore, for Dyson, is partly a Darwinian struggle to rank higher than others, and partly an existential struggle to prove one’s own identity. This vision is not dissimilar to my own theory of digital narcissism.Scott Karp suggests that this holds the key to a transformation of media economics, radically undermining traditional revenue sources for the creation of content, especially advertising. […]
a Darwinian struggle to rank higher than others, and partly an existential struggle to prove one’s own identity.” He sees in it further evidence of the “digital narcissism” that he believes forms the core of the new Web 2.0 media culture. Scott Karp sees in Goldhaber’s idea support for his belief that participative media will be difficult to “monetize” through advertising: In media 1.0, brands paid for the attention that media companies gathered by offering people news and entertainment (e.g. TV) in
and Vint Cerf on the next ten years of the Internet. (Note that there’s no link to the original, nor can I find it by searching the WSJ’s site–I’m assuming it’s somewhere behind their paywall. Here’s the original WSJ article, courtesy of Scott Karp at Publishing 2.0.) Esther had two comments in particular that caught my eye. First, on the evolution of marketing (and the future of free content): I think you’ll see a fundamental shift in the balance of power towards individuals. Individuals will declare what
[…] It’s true I often can. My friend, Chartreuse BETA, is phenomenal at trendspotting, as is our friend, Copyblogger. Scot Karp is excellent at seeing what trends are about to happen. Sometimes it depresses him. Don’t leavee out Tom Peters. . . . How exactly do we do that? […]
[…] It’s true I often can. My friend, Chartreuse BETA, is phenomenal at trendspotting, as is our friend, Copyblogger. Scot Karp is excellent at seeing what trends are about to happen. Sometimes it depresses him. Don’t leave out Tom Peters. . . . How exactly do we do that? […]
[…] John Hagel on paying attention points to discussion in the blogosphere, precipitated by comments by Esther Dyson in a debate with Vint Cerf in the WSJ Online. Attention scarcity is continuing to grow and will be of concern to all marketers. As Michael argues, the foundation of the attention economy is the exchange that results from giving and receiving attention. John points to comments from Andrew Keen who amplified on Esther’s comments: Dyson says that the Internet in 2016 will come to reflect our hunger for attention. It will be electronic proof of our existence. To misquote Descartes, “I can be googled, therefore I am.” The future of media, therefore, for Dyson, is partly a Darwinian struggle to rank higher than others, and partly an existential struggle to prove one’s own identity. This vision is not dissimilar to my own theory of digital narcissism. And, Scott Karp suggests that this holds the key to a transformation of media economics, radically undermining traditional revenue sources for the creation of content, especially advertising. For marketers to succeed, we now need to be clear on not just what motivates a buyer to buy - the compelling need - but also what is behind the desire to receive attention. I don’t want to just receive attention because I have primal human needs - what Nick gets at. There are times when I need attention because I have a compelling reason to buy. How do marketers identify that point of pragmatic need? Monitoring blogs and conversations is one way. But it is a reaction. The simple answer is by building relationships online. By enabling conversations. Let me illustrate this point. I have a very pragmatic need. Four new tires. The Continental tires on my Audi - even with diligence, have a habit of exploding on road trips. I want the three good ones left off my car. The Audi dealership doesn’t want to have a conversation about this. It’s Continental, or, Michelin. I don’t particularly trust them - a cornerstone of any conversation. So where can I have a conversation online - how can I post to a site my desire to have a conversation on a topic and attract businesses willing to share a point of view? In the attention economy it strikes me that there will be room for attention brokers to meet pragmatic needs. Just as there are all kinds of tools willing to satisfy our emotional needs with stats. […]
[…] Several different bloggers have flushed out intersesting perspectives on this topic including John Hagel, Umair Haque, Esther Dyson, Scott Karp, Nick Carr and Andrew Keen. […]
Artigo excelente: e se ninguém pagar pelos conteúdos?
need to control those interests and, in the end, those identities.? Carr’s concerns is that as we provide our lives as content on MySpace and YouTube and involve ourselves in the lives of others we are becoming “digital narcissists” and he quotes Scott Karp who writes, “This is why MySpace can?t effectively monetize its 70 million users through advertising ? people use MySpace not to GIVE their attention to something that is entertaining or informative (which could thus be sold to advertisers) but
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That’s it for Headlines today. Remember to visit the usual suspects for more “headliney goodness”! basil at basil’s blog Lyn at Bloggin Outloud Linky Business Friday Celebration Open Post & Trackbacks at Bloggin Outloud Technorati tag: Humor Headlines
[IMG] Bryce wrestling with Casey…waiting for the fireworks to start. [IMG Posted by Picasa]
If you are in the content, media or advertising business, think about what that means for your business. Scott Karp counters that the model assumes that media companies can “own†social media in the old media sense, and in fact they cannot: As IÂ’ve argued before, the reason why News Corp is struggling to monetize MySpace is that most people who visit MySpace are not visiting “MySpace,†the News Corp media property — they are visiting EACH OTHER. I’m not sure. With homepage revenue at a reported $1M/day, I’d
[…] Scott Karp, not long ago was wondering What if no one will pay for content? I can’t get his question out of my mind. What if writing content — newspapers, books, magazines, becomes a “gentleperson’s pastime,” a leisure activity? What if we learn not to expect to pay or get paid for what we write? […]
highlights this new “business model.†Right now, the big draw for users to participate in what can be called “media 2.0†is attention, not money. People want attention, and they can get it by giving it. According to another Publishing 2.0 post, it is not business competition, but attention competition. This means people are creating their own media for that attention they crave, but where does this leave the old business media model? It is basically leaving media to rely on the user to
What If No One Will Pay For Content? Randall Stross, in a Times article, wonders who will pay for TV now that ad-skipping DVRs and on-demand broadband video have destroyed TV’s mass media advertising model. I wonder whether late 20th-century TV content production will follow the same
[…] day this will all be yours Scott Karp: What if dollars have no place in the new economics of content? … In media 1.0, brands paid […]