Mike Masnick and the Great Content Monetization Debate
Today we have another edition of Pressure Point, our occasional podcast. As I’ve mentioned in the past, I’m a big fan of Techdirt, a popular technology news blog. With all the cluelessness out there, it’s refreshing to have a news source with such a level-headed and just plain intelligent view of so many hot-button issues. Because of my personal predilection for digital media, I follow their commentary on advertising, DRM and related topics particularly closely. It was therefore a pleasure to get the chance to discuss these areas with Mike Masnick, one of Techdirt’s founders.
Despite the fact that I agree with pretty much everything on Techdirt, I was hoping that we would find some bone of contention that would give the podcast more the character of a debate than a straight-up interview. (Let’s face it, I talk far too much to be a good interviewer.) This turned out to be the case, and after some insightful commentary by Mike on the evolution of advertising, we segued into a discussion about the merits and drawbacks of direct payments for content. As it turns out, we disagreed passionately and the result is a heated and (I hope) thought-provoking debate.
I was a bit flummoxed at the time by Mike’s contention that the principle of supply and demand implies that digital content, for which supply is infinite, must logically have a price of zero. As I wrote to him in a mail afterwards, I think the answer might be that the correct supply to measure is not that of a given piece of content (which is obviously infinite), but of a given type of content. Seen is this light, the supply is actually severely limited, and the pricing mechanism would act as expected, stabilizing to provide the correct level of motivation for people to create new content.
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so Coming soon…
Comment by Pedram — 7/30/2006 @ 2:13 pm
Mangrove’s Tluszcz On Opps In Eastern Europe And Mobile Services…
Mangrove, the young venture capital fund that is best known for being a Skype early backer is a secretive venture capital firm, but one of its partners, Mark Tluszcz, has started to write occasionally on the corporate blog of……
Trackback by alarm:clock euro — 8/14/2006 @ 6:54 am
You talked at Mr. Masnick, and not with him. You’re repeatedly setting up straw men and knocking them down.
I’m really fascinated by the idea of your product, but if it ever asks for my credit card number during normal use, or restricts my uses of itself in order to funnel me into pay content, it will be uninstalled within seconds. In addition, if it was a good product otherwise, 18 different open source projects will be created with all of the advantages and none of the disadvantages. Five of those products will survive, three will be very stable, and one will be higher quality than yours.
Comment by Jamaal — 8/21/2006 @ 8:39 pm
I’d be interested to know which strawmen you think I set up and why you thought that my arguments weren’t valid. For what’s it worth, I think that Mike more than held his own so it’s hard for me to accept that I was “talking at him”.
As you can tell from my comments, I do believe that paid content has a place on the web, but we’re certainly not in the business of shoving it down anyone’s throat. I am a firm believer that there will be more and higher quality content on the web once better monetization schemes are in place. I’m really looking forward to this personally since there’s tons of content that I would like to have, even if I have to pay for it, which simply isn’t available right now.
Comment by Matt — 8/21/2006 @ 11:13 pm
An alternative thought on the “supply/demand” content debate. Supply of content on the web is ‘technically’ infinite, but most people have limited time to go find it.
Sites that package content in time-saving, convenient way’s can either aggregate for Ad dollars, or charge a small , time-pressured user base.
Comment by Simon Christy — 8/22/2006 @ 11:46 am
Many of these arguments are relying on the assumption that the market is perfectly efficient in order to assert that the price will settle on the point where the supply and demand curves intersect. However, in most countries, the markets are deliberately made inneficient by copyright law.
On the other hand, if the marginal cost of producing a single copy of a work is only some CPU time, the bandwidth to copy the work (plus some management overhead), and some storage (hard drive) space, one can prove that a P2P system where each user uploads slightly more than s/he downloads (and provides the necessary CPU power) is an ideal solution in a hypothetically perfectly efficient market and that such a market would tend toward such a solution or an equivalent solution where leachers pay producers a value equal to the cost of the bandwidth, CPU time, and amortized cost of storage that leachers aren’t providing to the system. Once again note that this idealized efficient market is devoid of copyright law. Once governments start introducing deliberate inefficiencies in a market, the analysis becomes more complicated.
Also, many of you are making very strong assumptions about the shape of the supply and demand curves without justification, and perhaps without realizing it. It’s hard to argue that the demand won’t approach infite as price approaches zero. However, you need to be much more precise about how you’re defining supply in your arguments.
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Comment by GreeveHitnist — 12/6/2007 @ 7:54 am
[…] Matt from AllPeers […]
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