[RodericDay]

See, I really like markets, and I have a problem with phrases like:

> I like reading techcrunch, but would never pay for it.

Sounds to me a lot like Mitt Romney talking about how his wife has the most important job in the world, but she's essentially his unpaid housewife. Sounds hollow.

You are paying for techcrunch, by buying products advertised on it. It would be good for the finances of everyone in society to know exactly how much. If the product company could slice prices in half because their arms-race marketing budget is soaring, maybe you'd change your mind and pay techcrunch directly, so that you, techcrunch, and the R&D department of the product benefit, while marketing stops soaking up a large chunk of the money exchanged.

[Avshalom]

>See, I really like markets, and I have a problem with phrases like:

>> I like reading techcrunch, but would never pay for it.

Like most people in the world I can't trade time for money beyond a certain threshold AND I can't usually use that money and earn it simultaneously. While my attention is also limited it's something I can split so many people can pay for a small portion of my attention while I am simultaneously using whatever those fractions of attention are paying for.

Thats why "What I'll Spend Money On" is not the same as "What I Like" (in this case, there are of course various other situations in which they are different for other reasons)

[paulmd]

Costs don't drive prices though. Products are priced at whatever the consumer will pay, and if they won't pay enough then the product doesn't get made.

Price competition is an idea that exists but it's plan Z for any business. It's the last resort when you can't produce a superior product or find another niche that justifies higher margins. Think AMD vs Intel here.

No sane businessman has ever woken up and decided to slash his profit margin just for the hell of it. You can tell by the fact that businesses make profits - that wouldn't happen with perfect competition.

Nobody wants to be the low-margin high-volume product, because you're only a bad quarter away from low-margin low-volume. And once you're in it, it's a really hard pit to climb out of.

[ryandvm]

The problem is that nobody is asking the actual market value of their product. TechCrunch would probably want subscribers to pay north of $5/month. But the actual marketing value (in ad revenue) that they are currently able to extract from a single reader is probably closer to $0.50/year - if that.

You solve the micropayment problem and then we can talk about what I'm willing to pay for content.

[eevilspock]

Mozilla Research put the entire web's advertising revenue at $12.70/month per user[1]. In other words, if they are right we are living with the consequences of advertising for a mere $13/month, $13 dollar they still get from us anyway because it's baked into the prices of the advertised products.

> You solve the micropayment problem

We hackers and technologists here at HN are the "You".

"The best minds of my generation are thinking about how to make people click ads. That sucks." – Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera

As I put it here a couple of weeks ago[2]:

You're putting all the responsibility on the consumer, and none on us, the technologists, the so-called innovators. Where are our innovative powers to come up with alternate busniness models? Where are our backbones to stand up against selling out the internet so that we can get rich quick?

Because that is what the advertising business model is: a get rich quick scheme. Undercut the straight up competitors that charge for their product by fooling consumers into thinking you're offering what the other guy is offering, but for free. Come on, who could turn down that?

The saddest thing about Hacker News is that we all get behind radical things like FOSS (Bill Gates called it un-American) and Snowden, and fight SOPA and NSA violations of privacy, but because too many of our salaries depend on advertising revenue, our cognitive dissonance blinders go up lightning fast.

-

[1] https://news.ycombinator.com/item?id=8586294

[2] https://news.ycombinator.com/item?id=9961761

[Merovius]

> In other words, if they are right we are living with the consequences of advertising for a mere $13/month, $13 dollar they still get from us anyway because it's baked into the prices of the advertised products.

I am sorry, but I can not understand what's the problem with that. I can put out my content for free, everyone, regardles of economic situation can consume it. Prices will increase accordingly, but it won't affect everyone equally. The food you need to put on your table to survive, your electricity and your water doesn't have as large a chunk in the advertising budget as the latest iPhone, Macbook or random technology product. So at the absolute worst, the people buying luxury products subsidize people who wouldn't be able to afford my content otherwise. What's so bad about that?

Another implicit assumption that is very questionable for me as a non-economist is: The overhead the advertising company gets doesn't disappear. In general money doesn't disappear. It gets spent on the employees of the ad-company, which increases spending power and is good for the economy (?). It's a bit like energy. The amount is mostly constant, it's the fact that we move it around that creates value. The absolut worst you can do with your money, is not spending it. Because it can't create value like that.

[maxerickson]

Why assume there would be less overhead without the ads?

With ads, there is also probably less friction visiting unknown sites; clicking to a site with too many ads and then just closing it is probably a better experience than knowing you blew $0.05 on crap content (I'm not saying getting frustrated about $0.05 makes sense, I'm saying it will probably happen).

[eevilspock]

You and dragonwriter are missing my point about innovation, and also greatly underestimate the overhead cost of the advertising-publisher industrial complex.

[maxerickson]

I didn't make an estimate, I asked you to justify your assertion.

[dragonwriter]

> Mozilla Research puts the entire web's advertising revenue at $12.70/month per users[1]. This means that is the most we'd have to pay on average if could just pay directly (and in fact less if because all the overhead and externalities go away).

Direct payments have overhead and externalities (aide from simply payment processing overhad, consider that instead of providing content to all comers with accompanying ads, content providers have to have paywalls -- to stop the content from getting taken for free -- and find some way of promoting content to those who haven't yet paid to convince them to pay for it.) Neither the paywalls nor the promotional efforts are free of cost.

[loco5niner]

> Sounds to me a lot like Mitt Romney talking about how his wife has the most important job in the world, but she's essentially his unpaid housewife. Sounds hollow.

No, he's actually saying that raising the next generation is the most important job in the world. aka, Mom. And I think he's right.

[acdha]

Most of us live in market economies. Jobs which are truly considered to be important have respect and pay well. In contrast, in the U.S. we don't even respect mothers enough to e.g. give them enough time to fully recover from giving birth before going back to work or ensure that nobody has to worry about losing their job or income if they take a sick kid to the doctor.

[mercer]

Man, I don't want to derail this conversation, but I have so many feelings about this issue. And they often conflict.

As someone raised in a very traditional religious environment, I am not a big fan of the market economy approach of quantifying and anonymizing roles (including that of my local grocer or 'fishmonger', to name an example).

But on the other hand, we live where we live, and in this world I figure if we don't respect mothers because their role is difficult to express in money, we should at the very least fix that and give them all the support they need, monetary, paid leave, or otherwise.

[loco5niner]

> Jobs which are truly considered to be important have respect and pay well

Correction: Jobs that return a very positive cash flow (for someone) pay well. (Teachers, Cops, Firefighters vs Brokers, Singers, Pro Athletes)

[acdha]

I'm not sure those examples mean what you say – e.g. teachers are allegedly important but get paid far less than your other two examples, have increasingly regimented working conditions and are popularly blamed for circumstances outside of their control. In contrast, it's far less common for anyone to e.g. go after first responders’ pay or benefits or talk about how public safety depends on breaking their union.

Unsurprisingly, that respect gradient also tracks closely which jobs are stereotypically female-dominated. Even staying in education, school administrators - historically male – get more respect for comparable levels of education and are paid more for doing less work.

Again, the point is simply that our talk isn't backed up by our actions.

[RodericDay]

He's paying lip service to that idea. As acdha points out, he's not "putting his money where his mouth is".

[loco5niner]

Sure he his. She's a stay-at-home mom. Whose paycheck bought the house, etc? His.

[Merovius]

I think what they meant was "This job is important. So we should pay it accordingly. It is kind of hollow claiming that a job is important, but at the same time not paying it".

[loco5niner]

Yep, I get that's what was meant. It's just not logically sound.

[fwn]

No, paying for a website and being the reason some website is enabled to make money aren't the same things.

This is because the most important part in the whole process of wealth creation is it's incentive structure. Reducing it to the end state money distribution is like ripping a dimension off the market.

[chrismcb]

Product companies NEED advertising. Sure they could slice their prices (not in half) and not advertise. But then they would only grow by word of mouth. For some that is enough, but for most companies, it isn't enough.