[dredmorbius]

99% of online advertisers give the rest a bad name.

Not only is this why online advertising is ultimately doomed, but it's why we hugely and desperately and badly need to find another way of paying for content.

The alternatives for the moment are gratis, patronage, "native advertising", and subscriptions. Few of these strike me as ultimately scalable.

I've been a fan of Phil Hunt, of Pirate Party UK, and his broadband tax proposal after more-or-less independently coming up with the same idea myself. Hunt's proposal was principally aimed at music. I see no reason why it cannot apply to all content published and distributed online.

http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-fo...

My own sketched proposal: http://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modest... http://www.reddit.com/r/dredmorbius/comments/2h0h81/specifyi...

[easytiger]

> Not only is this why online advertising is ultimately doomed, but it's why we hugely and desperately and badly need to find another way of paying for content.

Another viable option is letting a lot of the content die. I'm sure we can all live without knowing that one neat trick that you won't believe.

In your proposal:

> ... constant challenge for any creative type is making a living.

Well perhaps if that's the case what you do is not valuable to anyone. Over time economic cycles destroy things that were once valuable. There used to be whole industries selling ice from icebergs in London. I bet they were rather upset when domestic refrigeration became popular.

Music as a physical medium is no longer very valuable due to a nexus of the proliferation of arbitrarily reproducible data systems and a decrease in the perception of value of non live performance music.

The suggestions of a broadband tax etc are insane and the work of lobbyists and other socially destructive parasites.

[skylan_q]

... constant challenge for any creative type is making a living.

Well perhaps if that's the case what you do is not valuable to anyone.

People have trouble coming to terms with the fact that they don't necessarily deserve to earn a living because they're doing something they like. It's like people are incapable of growing up anymore.

[karmacondon]

Something tells me that you benefit daily from the efforts of people who had difficulty earning a living from their craft at some point. Do you listen to music, watch television or movies, appreciate art, read books or web content? The creators of those things didn't all start out as highly acclaimed millionaires. Most of them spent years making things that weren't valuable to anyone.

There are an abundance of people who are capable of earning a living through a variety of work. There are very few people who are capable of consistently providing you with a few hours of diversion or entertainment. Do you really think that the world would be a better place if all of those lazy creative people got jobs at mcdonalds instead of making things that bring small moments of joy to billions of people? There would be no books for young children to read, no songs for teenagers to get excited about at their first dance, no movies for old people to be nostalgic about. It takes a lifetime of work to hone the skills necessary to create those things, and a lot of financial and personal risk that most of us aren't willing to assume. I don't know if a 'creative tax' is the right solution, but we could all be a little more understanding.

[easytiger]

And yet, despite this apparently dire situation, their output still exists.

[dredmorbius]

But who is benefiting from its existence? The creators or the current license holders?

[normloman]

That's not completely true. While it's true that some artists just feel entitled to a paycheck, there are other reasons to support paying for content. After all, good music (or good anything) takes a lifetime of practice to make. You have less time to perfect your craft if you're working a full time job doing something else. If some artists are allowed to make a living off their work, or even half a living off their work, the quality of the art improves. So not everyone needs to "grow up." Some have a valid concern.

That said, artists never made much of a living, even before the Internet.

[skylan_q]

While it's true that some artists just feel entitled to a paycheck, there are other reasons to support paying for content.

I have no problems with anyone willing to part with their money for content. I do it myself from time to time. My issue is the sense of entitlement whereby people think they should be getting money because they are performing an activity the feel should earn them money.

[puranjay]

> I do it myself from time to time

Which means that most of the time, you don't pay for content.

Which means that you basically pirate music.

Which means that you are the parasite, not the musician.

[na85]

Perhaps they listen to the radio, youtube, or a free streaming service.

Don't be so quick to jump to conclusions.

[puranjay]

The only person who deserves to make a sweeping statement like yours is someone who has never pirated a piece of music, never read a free article, or never watched a YouTube video.

You are not that person. No one is.

If you ask me, you are the parasite here, not the musician who wants to make a living.

[easytiger]

I'm afraid this reply makes no sense at all.

[john_b]

> "valuable"

Your post only uses that word in its economic sense. Thus statements like this:

> "Over time economic cycles destroy things that were once valuable."

Are tautologies, not arguments. The set of things which people find valuable (in the subjective sense of the word, not the economic one) and the set of things which people will pay for are not equal. A great many important works of art were once produced under a patronage system, in which only one person found the artist's work "valuable".

The reason patronage as a system is no longer as prevalent as it once was is because it was once a status symbol, whereas now it is just seen as some sort of hipster endorsement of some niche thing. The ability to offer patronage to an artist was once a display of great wealth and personal connections; now it means you have an internet connection and a few spare bucks. Maybe it can still work, but the social significance of the system has changed.

[puranjay]

You are seriously equating "selling ice" to "making music"?

I thought HN was had smart people. These are the kind of juvenile arguments I've seen snotty 13 year olds make on Reddit.

[easytiger]

Explain the juvinality. A serious business it was sailing to capture ice from an iceberg and damn sight harder in the context of the time than playing guitar.

[dredmorbius]

Another viable option is letting a lot of the content die.

I quite agree with that. Weaponized viral clickbait most especially.

what you do is not valuable to anyone.

Unfortunately for that premise, there are far, far, far too many counterexamples of those who've created hugely valuable works but have died destitute.

Looking beyond the strictly entertainment arts, just addressing a common trope of capitalism: that it's an engine of and greatly rewards innovation.

The tale of the unrewarded genius is legion, one set of substantiation is presented in Gregory Clark's A Farewell to Alms looking at key inventors of the early Industrial Revolution: John Kay, James Hargreaves, Richard Arkwright, Samuel Crompton, Reverend Edmund Cartwright, Eli Whitney, and Richard Roberts.

Of the list, Kay, Hargreaves, and Roberts died in poverty. Crompton and Cartwright were granted substantial payments by acts of Parliament (£5,000 and £10,000 respectively), Whitney made money through arms sales to the U.S. government, and of the lot, only Arkwright earned significant wealth, half a million pounds, after his patents stopped being honored by other manufacturers.

See also numerous authors, musicians, artists, playwrights, etc., who've created masterworks but were underappreciated in their own day.

That said, I do agree, somewhat, that the Universe does not owe you a living at your chosen task.

But a bigger issue is that information and markets are very poorly matched.

Market mechanisms work best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price.

Information goods violate virtually all these assumptions.

⚫ Quality is highly variable.

⚫ Quality assessment is difficult, and often frustrated by other factors (e.g., pay-to-publish journals, "friendly" colleague peer reviews, discussed recently by +Joerg Fliege).

⚫ Variance of individual instances is high enough that averages rarely suffice.

⚫ Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.

⚫ Variable costs of production (e.g., publication) are low. In fact we're utilizing a system which was specifically created to reduce those costs still further, Tim Berners-Lee's World Wide Web, developed to transmit physics papers between CERN, SLAC, and other related facilities.

⚫ Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. In the case of Dr. Grimm, those who would benefit by treatment of conditions informed by his research. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", or weapons research.

https://plus.google.com/u/0/104092656004159577193/posts/7Eer...

[vdaniuk]

>99% of online advertisers give the rest a bad name >My own sketched proposal: http://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modest...

See, the intense irony in your comment is that you are effectively advertising your own content using exaggerated, overhyped claim. If you consider such actions to be a net negative for the society, you are a part of the problem.

I do not disagree with you on principle and your proposal has some merit. The thing is that advertising/marketing dicussion is much more multifaceted and complex than HN collective mind portrays it to be: "advertising bad! mmkay?". The nuances and the opportunities to enact meaningful, real change in the advertising ecosystem are lost when rational discourse is suppressed by claims like "99% of advertisers are bad". Good actors should be rewarded and bad should be discouraged economically. By lumping all of them in the bad bucket, you are encouranging detrimental behaviour.

Harmful,intrusive,obnoxious advertising is a symptom, not a disease. You can't get rid of such ads without changing the underlying structure of socioeconomic reality, at least for limited cluster of audience.

[dredmorbius]

Yes, I introduced some related thoughts I've had into the discussion, which is what HN is about -- "Anything that good hackers would find interesting". We're looking at an aspect of the problem, I'd like to see discussion of possible resolutions. The one Hunt and I are proposing seems relevant (and other than a few essays, I've not been pursuing it all that much).

My direct benefit? Discussion of elements of the proposals (I've seen some agreement, challenges, and related suggestions in the discussion above) and a possible slight uptick in awareness and mindshare around the concept.

I do find it downright amusing that an entrepreneurial site engenders criticism for entrepreneurship in the area of ideas themselves. Though not entirely surprising.

[puranjay]

HN hates marketing, until you throw in some fancy charts and graphs to make the wannabe math majors here feel adequate.

[im3w1l]

I used to think a broadband tax was a good idea, but I now worry that it would give politicians too much leverage over content producers.

It is easy to see how they would try to ban porn, non-mainstream ideology and other inconvinient content from the system.

[skylan_q]

With just a little imagination:

80% tax on broadband to fund advertising of gov't propaganda on the web, to crack down on un-pc opinion and to help verify your personal identity for every action on the web that you take.

[dredmorbius]

too much leverage

The wars over public broadcasters are a significant case in point.

That said, the opposite of bad governance is not no governance but GOOD governance.

Among the reason public broadcasting entities are so vigorously opposed is that they are independent (to some extent) from the "commercial realities" of publishing and broadcast.

A system designed with no explicit limitations on who can or cannot be paid (or what works qualify) is an ultimate argument for "let the public decide". I actually differ from this in part through some selection and graduated payment system proposals -- there is fast-and-easy work which really doesn't require much incentive to produce, and highly detailed work which does require resources (e.g., international investigative journalism, scientific research).

I do see a need for graduated payment scales.

[blueskin_]

>Pirate Party UK

>broadband tax proposal

The Pirate Party is supposed to be pro-internet. This is just a perfect example of how shambolic and badly-organised the UK Pirate Party is, and the reason their membership has been dropping since launch. They are basically a joke party in the UK, where in other countries they have emerged as a significant political force with influence above its size.

[Fuxy]

With such a proposal I'm not surprised how ca a party of technically skilled people and intelligent people ever come up with such a dumb idea.

There are plenty of obscure artists that were able to monetize their work to a certain degree.

Now are they making millions? No. They do make a small chunk of change though.

With the internet and access to so many good songs the value of a song has decreased and the entertainment industry and artists need to accept that.

[discardorama]

> With such a proposal!

Isn't UK the place where you have to pay license fees to watch television? Those fees are then used to support outfits like BBC. So it isn't a far stretch to imagine a similar broadband tax. I'm not supporting the tax; I'm just saying that to someone who grew up in the UK with a "license fee" model of television, a broadband tax isn't an intellectual leap, it just feels like an extension.

[blueskin_]

Yes, unfortunately, although there is growing resentment against it every year and even some high profile celebrities are now refusing to pay. An internet tax would ensure whoever brought it in would not win an election again, especially as the old people (largest TV tax paying demographic while many younger people ignore it) are dying while huge numbers of young people are only just reaching voting age. I would be surprised if even the TV tax still existed in 10 years. If the BBC want funding without adverts, they should encrypt their channels and sell subscriptions; I think they'd find that the number of people who want to pay £150/year for 1 or 2 good programmes is a lot less than they have convinced themselves it is.

[Fuxy]

True that's a weird way of doing things it's practically state/tax sponsored television owned by "the public".

Plus I think you don't have to pay the fee if you can show that you don't own a television.

Not certain I agree with that model either.

Something about the person paying it not having a choice always rubs me the wrong way.

Why do i have to pay if I don't watch the BBC or download pirated stuff.

[blueskin_]

Yeah, it's messed up. Easy enough to avoid by saying you either don't have a TV, or have one but don't use it to watch broadcast TV though.

[philwelch]

> With such a proposal I'm not surprised how ca a party of technically skilled people and intelligent people ever come up with such a dumb idea.

After witnessing many sad political arguments on HN, I've concluded that technically skilled people are just as good as anyone else at supporting dumb political ideas.

[bambax]

> 99% of online advertisers give the rest a bad name

So true; remove "online" from the sentence above and it's even truer.

> it's why we hugely and desperately and badly need to find another way of paying for content

Not sure about that.

Here are the ways I can think of we gain access to content:

- by directly paying for it (books, movies, etc.)

- by indirectly paying for it (ad supported newspapers articles and such)

- by paying for it via taxes (your proposal)

- because it's free.

The best content is undeniably that which people will specifically, directly buy with their own money[1].

And the second best is free.

All the other content distribution schemes produce bad content, either hollow or click-baity or just plain dumb.

My point is that AdBlock is saving the world.

1: For the purpose of this discussion, pirated is in the same category as paid-for.

[jerf]

Patreon is saving the world, not AdBlock. It's still early but I expect in 10 years that "trying to make money via ads" is going to see "very 2010s", due to the lack of words for "something done from the late 1990s to the late 2010s".

It just doesn't work. It almost works. It is so painfully close to working that we can taste it, which is why it has hung around so long. But eventually, advertising corrupts all souls. People respond to incentives, no matter how hard they try not to, and nobody sane should really try to build a quality content-production regime on people trying really hard to act as if the incentives they are operating under aren't the incentives they're operating under. Even when it "works" for some period of time I question the effects of such long-term self-deception.

[Fuxy]

Patrion is a good idea however a better one would be if you could pay £0.01 - £0.05 (pick your currency) per you-tube video watched and not have any ads shown.

Right now everybody in analitics is thinking in the millions of impressions but imagine if you could make £0.05 per impression.

That would be £50,000 per million views.

I wouldn't mind just having a few pounds on my youtube account and using that to avoid seeing ads.

[jerf]

Microtransactions have had implementations of various sorts for about two decades now. Patronage has had implementations for about two years now. Patronage is probably already ten times the size of microtransactions, and I suspect I'm being an order of magnitude or two generous on the side of microtransactions there. My conclusion: Patronage may work, microtransactions do not.

One possibly reason is that advertising crowds out microtransactions in any practical implementation; you can either hope that your viewer has installed a microtransaction plugin and is visiting enough sites to make it worthwhile and not let the installation decay, or you can simply install ads and get 100th the price of a single transaction but get it from everybody. Microtransactions have faced a serious boil-the-ocean problem. On the other hand, under the patronage model, you get about 500-1000 people to support you with 4-5 bucks a month and now you're living a middle class lifestyle. That's not trivial, but it's not boil the ocean. (And if you can't get that, well... sorry, perhaps you're not cut out to be an internet "content creator" and live on that. I know I personally am not.)

I got that 4-5 bucks a month by running the numbers on the four campaigns I'm involved in. The averages I obtained were $7.80, $3.50, $4.50, and $3.90 per patron. 2 of those are big enough that the creators can live comfortably middle-class lifestyles on the patronage alone. One is augmenting contract cartooning work and I would imagine between the two of those things is comfortably-middle class. One of them can not on just the patronage income, but has expressed thanks on his blog for it being enough money to find a better place to live for him and his family, and the other is a now embarrassingly-oversupplied-with-money Let's Play series that's a spare time thing that certainly is worth the time the owner invests in it now. So this is not a rehash of the "microtransactions will be awesome someday in the future" argument that I've been reading; this is happening now, it's the present.

(And in all cases, when I say "comfortably middle-class", I am including both fees taken out before they get their money, taxes, and self-insuring; $60-70K a year in income is more than many people see! If they're merely making the "median US income" in cash before fees and taxes I would be less glib, though even that is impressive compared to what could be done three years ago.)

(Also, by no means am I claiming this is a random sample. You may go do your own to whatever criteria you like. But I would also reiterate that this isn't going to work for everyone, and a failed Patreon campaign isn't really the fault of either Patreon or the idea of patronage as a viable solution.)

[dredmorbius]

"Patronage is probably already ten times the size of microtransactions"

Any data / sources to back that assertion?

[Touche]

Isn't Patreon just charity? I don't think that's a sustainable way to pay for content.

[JoshTriplett]

No, it isn't charity; it's payment for content. Calling it "charity" implies that the content being provided has no value to the person paying for it.

[gergles]

No, it's patronage, and it appeared to work for a few hundred years.

[normloman]

Not sustainable? Tell that to PBS!

[Touche]

Sustainable is the wrong word. Is it scalable? Meaning can a large number of creators live off of this model?

[normloman]

Time will tell, but I can't see any reason to doubt whether this could scale. As long as an artist can inspire intense loyalty from a small group of fans, they could forseeably supplement their income with donations. This won't work for all artists, and won't replace existing funding models. But there are a lot of creators who fit this bill.

I, for one, and excited to see crowd-patronage grow. It's a model that rewards artists with cult appeal (versus the consumer model, which values mass appeal). The arts will be a little less bland.

[jerf]

See my other reply that's like a great-great-uncle-once-removed of this comment or something, and I'd highlight I'm using real numbers from my real patronage, not theoretical things that could happen someday.

[bambax]

Agree with all of the above!

Thanks for mentioning Patreon: first time I hear about it. Sounds like a brilliant idea!

[antihero]

What would be interesting is a sort of all-content-subscription - you pay X per month, and it's divvied up between the providers/owners of whatever you use. Kind of like a tax, but actually related to usage.

Would be very difficult to have the trust and integration required for it to work though.

[dredmorbius]

That's pretty much my proposal, though with a few caveats.

It's a flat fee. That is, you're paying the same whether you fetch a single work or 10,000. Aaron Swartz's mass document mining would be supported. If you're interested in large-scale literature analysis, it's possible.

It's scaled to income / wealth. Information is part of what makes the system in which you're living possible. If the system's rewarded you, you reward the system back. Hence the tax element. Possibly scaling to some sort of connectivity plan might accomplish a similar aspect via price discrimination (of the old-school multi-tier service offering model, not the new-school hit-them-with-hidden-fees approach).

There are tiers of compensation. Pumping out white noise / easy-to-generate content doesn't necessarily buy you high compensation. Detailed scientific / journalistic work does. Penalties for inaccuracy in genres where accuracy matters, especially against deliberate distortion.

Implementation is the tricky bit.

[forgotpasswd3x]

I had thought that would be an interesting way to set up a streaming music service.

Ex: I'll agree to pay $X/month, and then at the end of the month, that money gets paid out to the artists I listened to based on how often I listened to them.

It probably wouldn't work, but I don't really feel any current method of music sales is really working for most artists.

[kuschku]

Soooo, like Flattr?

[PaulHoule]

I think it is more fair to say that a small percentage of online advertisers fill up a lot of inventory with junk that hurt the large percentage of advertisers that run relevant ads.

For most X, you can say that showing ads for X from people who really want to sell it to you makes life better than worse.

The least common denominator behind all these scams is: (i) recurring billing, and (ii) high margin product. An early form of it was the "free ringtone" scam which would hit your phone bill for $10 a month. Today it tends to be nutritional supplements. If you can send somebody an $80 a month bottle of pills that you can get made in China for $5, the net present value of a customer is enough that you can pay Yahoo, affiliate advertisers and others involved enough to keep the thing going.

There is a group of a few hundred people that could be described uncharitably as a "criminal ring" that are behind this stuff. Seriously, they hang out on IRC.

In the world of multilevel marketing the most interesting development is "Ambit Energy" which gets over the problem that it is hard to get people to buy a $80 a month supplement -- everybody needs electricity. However, electricity is a low margin business and Ambit offers very little benefit to consumers other than getting your friends and family members who are Ambit to shut up.

In the world of "normal" businesses where you are dealing with people who know more about their product or business than they do about the rapidly changing world of online advertising. (I read technical documentation like some people read thrillers, but reading the jargon around AdTech makes my head spin.) Also they don't have 80% margins. People like that often find it hard to make a profit with online advertising so the scammers take their place.

[prof_hobart]

That tax idea seems fraught with issues to me.

It talks about the BBC as a comparison, and I'm a great admirer of the BBC, but I'm not sure that's a relevant model for internet as a whole. The Beeb is governed by a specific charter covering what it should and shouldn't do. And whilst there's theoretically no government interference in day to day content, there is an explicit understanding that the government could pull their charter if they don't like what they are up to.

Only giving funding to web content that complies with a government-sanctioned charter doesn't seem a great future to me, and it becomes a worryingly small step from there to outright blocking anything that breaches it.

[dredmorbius]

"That tax idea seems fraught with issues to me."

All the more reason to discuss it and explore what those issues might be.

[prof_hobart]

Which is what I've just done.

[dredmorbius]

Indeed.

[prof_hobart]

Are you in support of the proposal? If so, do you have any comment on the concerns I raised?

[zby]

There is also a very detailed plan for something like a broadband tax by Philippe Aigrain: http://www.sharing-thebook.com/

[dredmorbius]

Thanks, taking a look.

[sixQuarks]

be patient. As I've seen the internet grow since the mid-90s, I've seen the patterns, the fits and starts, the changes that occur. This whole sponsored content stuff will pass. I can't tell you how or when, but it will certainly pass. Will probably have to get worse before it gets better though.