Diller: Humbug on 'Internet is free' mythology
In Barry Diller's paleontological view of the Internet, we're still just coming out of the primordial ooze and slouching toward the "click to buy" button.
The IAC/InterActiveCorp CEO and self-professed opportunist, rather impatiently told CBS News' Katie Couric earlier this week that the day is coming when people will regularly pay for content. As he has before, he trotted out the example of Apple, which has managed turn its iTunes store into a "multimillion-dollar business" based on the once-heretical notion of asking people to spend money on digital music and video.
"We're still so young at this," Diller said of where the world is on the Internet timeline. "We don't even have, really, a first real generation. We're just kinda getting one."
In due time, he said, content companies will be unburdened of "this mythology of 'the Internet is free,'" which was perpetrated by a seemingly prehistoric tribe that cared only about bandwidth and availability.
"The Internet, you have to remember, was started by tech people," Diller said.
For more from Couric's joint interview of Diller and Tina Brown, who is editor in chief of IAC's The Daily Beast, see "@KatieCouric: Tina Brown and Barry Diller."
Jonathan Skillings is managing editor of CNET News, based in the Boston bureau. He's been with CNET since 2000, after a decade in tech journalism at the IDG News Service, PC Week, and an AS/400 magazine. He's also been a soldier and a schoolteacher. E-mail Jon. 
not all content will be free and not all will be paid.
*** ever.
who is this blowhard.
Already there is some content that is only available by subscription. Can you say WSJ? Of course that content is worth purchasing.
News? When you have sites like CNN which make their revenue off their cable channels and advertising, do you think they'll start charging for content? Traditional press? They'll go under long before people are willing to pay for access to accurate reporting.
The blow hard is someone who's in the know about media.
the creator of both fox and usa netowrks.
the guy who was in charge (at different locations) or maming sure both "cheers" and "the simpsons" got done and pished hard enuff to catch on.
he;s alsoi ther guy doing the most to warn people about the "everything is free" model being used to create monopolies, after "ad sponsored" models like google, crush enuff competition.
and ion 2005 he got paid over $400 million
and he knows how to read well enough to see that "the day is coming when people will regularly pay for content." does not have the word "all" in the sentence.
Just a thought.
The WHOLE POINT of NET NEUTRALITY is to keep the ISP and content providers separate. Dillard might have a point about more people being willing to pay for content in the future... if the pricing is set properly. But, this should NEVER be included in what you pay for the 'pipe' from the ISP.
Paying for content I want is like buying anything else. You want it, you pay for it. Magazines, newspaper, book, funny web sites, or whatever. It is just that most payments so far have been in the form of including ads with the stuff I really want to see.
Just a thought.
As soon as someone makes the first step, others will follow based on their success or failure.
Time will tell, but my best bet is that competition will prevent the "pay-per-view" Internet from happening, although a sudden monopolistic move could change the spectrum but it might just be restricted to one or two countries, languages or areas.
Remember that long ago, when cable companies started charging for what was basically "over-the-air" TV, people started "hijacking" signals from the satellites used by those same companies. The reasoning was OK, if the program had adds, it should be free. Cable thought otherwise. In the end, do-it-yourself sat died but cable didn't rule, being displaced by legal SatTV.
The main point is. If we are wise and avoid monopolistic or oligopolistic movements, then the Internet must certainly remain free. Else we know somebody is controlling it and leaving other out of the panorama. (e.g. RIAA in the case of iTunes)
What the heck is a public domain copyright? Do you have a clue?
I can envision a future where we pay a nominal access fee to a provider, but then pay additional fees based on the websites we frequent most often or pay access fees for more websites in general. Currently, it's already more than WSJ; lots of websites have "insider" type options for $20/year for the more detailed information. ESPN is already moving a larger portion of their proprietary reporting to the insiders only portion of the website.
You paid for access to the internet. Confusing access and content is a BIG problem in this Net Neutrality debate. People who don't want the limitations AT&T, Comcast, etc. are trying to impose, best figure out the difference. Mikekrause, you're being part of the problem here... not the solution.
I agree with Diller for the most part. Once companies figure out the AMOUNT to charge for various content, they will SELL LOTS. Much of the problem currently is that content providers who do charge, are trying to make all their profit off of a few people, rather than going for quantity. A great example is what is being charged for TV series. I checked on a show on iTMS the other day and they want like $60 for a season of a show. I was like.... WHAT? I can buy the show on DVD for about half that.... and watch/record it OTA for FREE (and in much better quality). The convenience of it would be nice, but only an idiot is going to pay that much (or rich kids with $500/mo iTMS accounts... yes, they do exist). Charge like $5 to $15 for a season of TV shows, and then I might be enticed to buy. (Note that I'm not blaming Apple here. It is just an example. From what I know, it isn't Apple setting those outrageous prices).
However, even Diller seems confused in that last statement about bandwidth and availability.
Let me put this as simply as I can:
1) ISPs are like pipes. They should ONLY charge a monthly fee to connect to a particular sized pipe. That said, this pricing should be competitive and be based on the fast that we've already paid them a LOT and they haven't delivered. see: http://www.newnetworks.com/ShortSCANDALSummary.htm
2) Content providers, then, can charge whatever they like for their product. No one is entitled to get any content for free. That said... if they charge too much, or all charge for everything.... they might find either very few buyers, or an unused Internet.
Diller might think that a primarily free (content wise) Internet is archaic... but he needs to remember that if it hadn't been so (and I say continues to be so), it would have been just another CompuServe or AOL. And where are these companies now, Mr. Diller? You might want to ponder on that a bit.
Then: When television was first started, it was broadcast free to homes. The content was paid for by imbedding about 10 min of commercials into each hour. Of the 3 or 4 stations they could receive, people usually found content they wanted to watch and enjoyed.
Now: Most people pay a cable or satelite provider for television content which is imbedded with about 16 minutes of commercials being played at about twice the audio volume. They find that 90% of the channels are worthless (i.e. public access, infomercials) and of the remaining 10%, they might find something they would like to watch and enjoy.
So tell me how now is better when we pay to get commercials, infomercials, and over 90% of the content is crap and before it was free, there were less commercials and the content was better on fewer channels. Sure, you can still get TV for free over the air, but good luck finding anything worth watching.
This is what's going to happen to the internet.
Oh my gosh people... is this really so hard to understand?
The ISPs and content providers are completely different things. NO, you don't want the ISPs to charge and then pay for content providers as well. THIS IS THE WHOLE POINT OF NET NEUTRALITY! If you go down that path, you'll end up reverting the Internet to a Compserve or AOL. Do you remember those days? I do.
Oh, and BTW, I do agree that your cable bill is already too high... but that is a whole different story.
see:
http://www.newnetworks.com/ShortSCANDALSummary.htm
I point to Wikipedia and Web Comics as a golden example. These aren't things that have moved towards monetization. A couple paid webcomics have popped up, and they haven't done particularly well unless they were porn based. As long as we have people freely blogging, and google raking in ludicrous sums of money while giving away services and blog platforms then some content is going to be free. Those things seem to be institutionalizing themselves, not going away.
Hate to break it to him, but those tech people still run the internet and probably will forever.
Now I was young but not young enough to know those days where so difunctional to say the least terrifying, scary enough that news did not even talk about it at all. If news which is free right now :-) talked about our conflicts as they do now we really would be a prosac society.
I believe that free services like HULU are a stepping stone towards that goal. Get you hooked with a percentage of content for free and then eventually as they move more and more content online it will transition to fee based subscription services. Already some sites offer limited free items and then expanded fee based services.
Rhapsody and other subscription based music services will become the normal method and iTunes type stores will fade, as will the idea of ownership of the content. Sad as it will be for us the consumer I can see that all content in physical form will diminish and digital distributed content will take its place.
Not only will it be digitally distributed but it will become more and more streamed to the devices with no actual content being stored locally. Future video collections will be accessed through the web and streamed on demand like Amazon's VOD library on the Roku player. There will be nothing to rent once and share with your friends and family, duplicate or post on file sharing sites.
As smartphones become more and more mainstream and their media capabilities become more advanced, plus as 3G, 4G and WiMax solutions become more common, I can see PMP's becoming connected devices that stream your songs to you from some service and your playlist is just an application that interfaces with a cloud based library.
Think of the future connected world and see the benefit of this approach to the content providers and hardware manufactures both. More revenue for the content providers with less losses do to piracy, sharing of physical media and an actual monetary return on every single viewing of a piece of content. Heck they want to start charging for "previews" and trailers shown on sites even now.
On the hardware side you would not have the need for large amounts of internal storage on devices if everything is streamed in. Even with applications and games, if the applications were hosted off device and streamed in on use there would be far less hardware requirements than there is currently. Plus the provider of the application would control the version in use by everyone all the time. updates are done server side and the phone "app" is given free with a subscription to the service and all data is stored remotely on their servers.
i can see this becoming the internet five to ten years down the road.
Make no mistake the internet will become more a place of commerce than it is today, but the internet of today isn't going to disappear ever, it's just going to have a thriving business sharing it's protocol.
What I said was that the media companies (your Sony Pictures, NBC, Warner Music or whoever it might be) will be pulling all their free content once they get enough people used to the "freedom" and convenience of watching the content when the want, according to their schedule and not someone else's schedule. It started with VCR's, then DVR's, then On-Demand services from cable and satellite providers and now moving to on-line distribution services.
What I did not say is that there will be no independent content being produced, or plenty of free content to occupy your time. But I think you over-estimate the great majority of the public being willing to pass on the content from the major sources just because it comes at a cost, and instead fill in their entertainment time with other content just because it is free. Very few people will make that trade off. If the majority of people were willing to do so there wouldn't be millions of people paying monthly fees for cable service, satellite service, XM radio and movie theater tickets on a daily basis.
Human Nature does not have to rework itself for this to work as you imply as it is already human nature in this day and age to choose instant gratification over cost. Take the App Store with its cheap 99 cent to a couple dollar apps, Amazons one click purchase and so forth. People spend less time contemplating the cost and more time contemplating the desire for content these days.
As time goes by it is going to become more and more prevalent and normal action and move into all facets of media content. Video games are already moving to the micro-transaction model, and releasing content a little at a time with paid DLC. Others are releasing games in serial format like Lucas Arts with the Monkey Island series. Newspaper and Magazine sites will move more and more this direction.
If I stood alone in these preferences I wouldn't bring them up, but I know several people who agree with me. As long as political debates are streamed by not for profits who have a mission to spread political information, and public radio stations like WFHB (http://www.wfhb.org) produce quality content again backed by a not for profit goal, though no longer limited to local distribution by radio transmission technology then there will be far far more free on the Internet than in the days before the Internet, and many of us will always take advantage of that. Pointing to mainstream media as a hallmark of the death of the "free" internet completely ignores the doors it opened for content that just could not be distributed in the past. Pretending that the new found distribution of that content on a broad scale isn't enormously significant and a part of the media equation that should be included in these conversations misses the mark by a wide margin.
As I said in the first line of my last comment. You're point would be true if it didn't miss wide swaths of content. I never claimed it was invalid overall, just that it's myopic, and a lots happening outside of it's focus that should be taken into account.
He also doesn't understand Apple's business model: the iTunes Store isn't really a P&L center. Apple uses the content at the iTunes Store to drive sales of its high-margin hardware. That's where Apple makes its dough.
Paid content is already a reality, with cost-effective payment methods well in place. But this will not become the norm of the Internet in the foreseeable future.
You could have dozens of journalists in a city, some covering politics, sports, or just a neighborhood. I could pay to read the feeds I like. Perhaps after a month or so, the feeds become open so that I can see what that person has written and maybe I would like to subscribe to that feed.
Now take this to all cities around the world. A tech feed from someone in San Jose. A fashion feed from someone in NY or Paris or Milan. Legitimate journalists making money. Say you charge a $1 per month to read your feed and only 10,000 people subscribe. That is pretty good money.
A lot of people think being self employed would be totally cool until they actually try it on for size. It doesn't always fit as nicely as you may think.
Additionally I think editors provide a service/ soundboard for reporters. I'm not saying solo reporters are bad and couldn't follow journalism ethics. But having anyone become a "reporter" would undermine the profession without a meaningful screening process. Weeding out objective reporters on your own would grow tiresome. This is an interesting set of topics (lots of facets and caveats) it would be cool to hear a live discussion/ debate.
"Pretty good money? Not really. $120,000 per year, gross. Even if your hosting is free. No pension, and no 401K match. No health, dental or vision coverage. You have to buy that on the open market. Plus you get the honor of paying both halves of the social security tax, 12.4% on the first 102,000, not just the 6.2% that you pay as an employee. It sounds great until you start deducting all the costs. If you work for a large corporation with good benefits and reasonable 401K match, then your untaxed benefits add up to around $30,000 per year. Add on top of that the cost of utilities, office space, computing.
And how much money do you think the average person makes, how much money do you think a Journalist makes?
Untaxed benefits add to squat, average company does not give you 401K, that is also limited to who give it to you and how much profit they are making. The taxes you pay as self employed are a trickle to what you pay if your employed by another, because basically everything is deductible as expense, even your ride to your first gig is deductible. That shirt you wearing to see a client, deductible the list goes on and on. Lunch deductible, so tell me who is paying for your lunch.
Let me not get started on how much health insurance is now a days, even for us who work at a hospital.
I give my gig up in a heartbeat if I could go back to self-employed. But right now that just not feasible but in the future I do plan to go back. Waiting for a paycheck after taxes and no deductions at all is a slow ride to been poor in old age.
Get your facts strait don't just pull them out of your head and say its gospel. And forget 401K RothIRA makes more sense for self employed and that is before taxes. So your going to also pay even less on taxes.
If your good you can make even more, I for one feel that if possible do your own thing and stop been afraid about how you need the big corp to take care of you.
Surely not. For in cryptography there exists no unbreakable algorithm. What are they to do about them? Surely they cannot arrest all of them (there are some international security issues, that would be too lengthy to describe here, but they cannot). So, what does a hacker do?
A hacker or a hacker group, besides many other things, has a job they take pride in; they crack software and content and redistribute it for free (all you have to do is go to mininova.org and see in some torrents how proud the hacker teams are to present the public with free content).
Well, surely this would result to a "sub-internet" existing inside the "official" internet. And all work that is now done openly would then be done secretly and be banished by the law. Surely, companies would never like that and then make content free again.
And another point from me (in case you found the previous a poor one). Really, in internet ALL content is FREE. What we pay of is the RIGHT to access the content. So, you see, as long as some people are willing to let their computer to act as servers (people would never profit from payable content, since they would have no hope of antagonizing whole companies), these servers can be used for blogs and things like that, which will mean free access to content.
To conclude (for I could discuss my opinions here for days), companies are always a step behind in security issues. So, whatever they do, they will never manage to completely secure their content. And the "anarchists" of the internet (hackers and people like them) will always manage to get the payable content out there for free, even if companies do try to stop them.
Lets think about this. If Microsoft decided to undercut iTunes with Windows MarketPlace and make all songs 75 cents, do you think everyone would throw away their iPods and buy a Zune!
I do agree that Apple is a bad example here. I think generally (at least for music), Apple's pricing is mostly reasonable. AND the only reason it is is because Apple kind of strong-armed the industry. The record companies want way higher pricing.... and if that had been the case, iTMS wouldn't be the success it now is.
However, all you need to do is look at the prices Apple is charging (or better, the TV/movie industry is charging) to buy a season pass to a TV show. You'll probably faint in shock. It's like $60 for a season if what you can watch for free OTA. Simply nuts!
You are absolutely correct about the iPod and iTunes driving iTMS at least initially. It was a brilliant combination of products and software that got it all started.
Many aspects of the internet will always remain free and will compete with FOR PAY sites.
The internet is a trasnportation medium which has no price tag.
Only business leaders and those who are greedy want everyone to pay for anything and everything off the internet. Are these open courses to further my education online of any less value than a brick and mortar school? Sure there are inherent differences but to think the internet will be for a FOR PROFIT only tool for the world is not a genuine display of intelligence.
Oh wait, at that time it was called: "Valley of Heart's Delight"
LOL!!!!
- by sandor_f September 30, 2009 12:30 PM PDT
- Ok, so the internet comes of age, and we have to pay for everything.
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- by Kiljoy616 September 30, 2009 3:50 PM PDT
- Had slipped my mind, you do have a point there.
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Showing 1 of 2 pages (84 Comments)Then, just like at a mall where you pay for everything, **access** has to be free to bring people in.