The end of the free Internet?
Asking online users to pay for content hasn't worked so far, but iPads and smart phones may change their minds about the free Internet.
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Part of this change has to do with the long-forgotten part of the famous "wants to be free" quotation: "On the one hand, information wants to be expensive, because it's so valuable," said writer Stewart Brand at the Hackers' Conference in 1984. "The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other."
Somehow, only the second half stuck.
"Free distribution of premium content is like eating your babies. You will give value away until you go bust," says a recent report from Group M, the media-buying agency of the international media and advertising giant WPP. The report calls people who use search engines to find news or information "useless tourists" who don't pay their way and have little value, even to advertisers.
Others are less sure that the Internet has hit a "time to pay up" moment. "I can make one prediction," said Arianna Huffington, founder of the popular Huffington Post website, at a recent panel discussion of the future of the news media. "Pay walls are not going to work."
"Historically, consumers have not demonstrated a willingness to pay for electronic access to news," writes Dave Morgan, a successful online entrepreneur and an expert on online advertising, in an e-mail interview. "It's very hard to build paid subscription businesses in electronic news. There just aren't many examples of success in creating stand-alone consumer-oriented digital news subscription businesses."
The Wall Street Journal places much of its news content behind a pay wall, though it can be accessed indirectly through a search engine or via other websites. But the Journal is considered by some to be an exception to the rule, since subscriptions often are paid for by employers, not individuals.
The New York Times abandoned an earlier effort to place some of its content behind a pay wall, presumably because it found that a smaller number of readers reduced its attractiveness to advertisers.
One difference today may be the explosion of mobile devices, including smart phones and tablet computers. (A slew of iPad competitors is on the way. One industry analyst projects that tablet sales will exceed those of small, inexpensive laptops known as netbooks in 2012 and will surpass sales of desktop computers by 2013.)
With mobile phones, "Customers have been trained to pay for everything, from text messaging to voice mail to minutes [of call time]," says Darren Tsui, CEO of mSpot, a mobile music provider in Palo Alto, Calif. "So paying for content really isn't that foreign for them, versus Internet users, who are used to getting everything for free."