Putting a dam on the river of information @ TigerDroppings.com

Putting a dam on the river of information

by supatigah on Oct 1, 2009 at 9:45 am	Comments (185)

Right now the trillion dollar question in every business school and marketing think tank across the globe is "how do we fully monetize the internet?" People across the globe have shown the willingness to pay modest fees for information and services but the ability of a website to fully monetize its content has escaped even the brightest minds. Right now the best way to make money on the internet is:

1) a gambling site (first and foremost)

2) a site that offers unique (inside) or exclusive information (be it financial/sports/politics/whatever)

3) 3rd party services (ebay/jobs/amazon/itunes)

4) porn (in a very distant 4th place because the industry is failing)

5) create a site with a built in following and make money off of site ads

this potentially leaves out the information gathering industries like google and the news websites, the original content websites like funny or die, the video streaming websites like youtube, message boards and millions of bloggers because category 5 is the only one they really fit under. The cat was let out of the proverbial bag when most of these websites started out with free content and now they want to figure out a way to reverse flow and start making big money.

We have seen this website explode in popularity due to another LSU website's attempt to dam the river unsuccessfully. Not only did the information flow around their dam, their members flowed around the dam as well and found another free site.

So what is the solution to the trillion dollar question? How do they monetize the internet when they started out for free? I think the answer doesn't lie in the internet itself but in the delivery of the internet to the consumer.

Newspapers are dying from an outdated delivery method. TV networks are dying from a lack of quality content. Radio is dying from competition from the individual's own song catalogues and podcasts downloaded to mp3 players and phones. The internet is one massive jungle of free information and pop up ads. Why hasn't someone figured out a way to combine it all into one delivery medium?

I look at my directv HD DVR and I realize it is a basic C drive with limited capability for data entry and computing. Why do I have a desktop in my office and a very limited computer connected to my TV? Why don't I have a full blown computer drive connected to my TV that I can interact with and pull up whatever content from whatever source I want? Why is it autos have limited computers with monitors built in the dash but a web browser is not included in the package?

In my mind the answer is not monetizing the internet at all, it is a company like apple getting way ahead of the curve (like they did with the iphone) by partnering with all of the media outlets and creating a full blown apple media service that provides satellite TV, web browsing, video streaming, email, consumer interaction (via an iphone ap or something similar) with the service and delivery method through your television monitor or your kindle or your iphone with it all tied up into one monthly bill. This would allow the service provider the opportunity to sell ads and sponsorship through a subscriber service to a captured audience. The internet sites can then negotiate with the various service providers to place their content on their subscription plan to create their "channel."

For example, Funny or Die is a very popular website that probably isn't worth very much on the open market because their content is free. What if the owners of Funny or Die negotiated with Apple Media or Google Media or MSN Media for their content to be provided to a subscriber service as a Funny or Die Channel? Say Google Media wins the bidding war for broadcast rights to the Funny or Die channel. If you want to view the content on the Funny or Die Channel you have to subscribe to Google Media to see it. Now what if you are a Apple media subscriber and still want to see Funny or Die then what would stop Google from offering tiered packages (like directv does) that would give you access to the Funny or Die Channel for a small fee? NOTHING.

To expand on this concept, imagine you are a MSN media member, you use an advanced concept Zune type phone for communication, music and video delivery. Your Zune has all of your personal info stored in it (encrypted) and any time you venture out onto the MSN Media Mall to shop, your saved cookies interact with the "channel" to upload your encrypted information onto the "channel's database." So you visit the Nike Channel and you want to buy the latest Air Jordans. You navigate the Nike Channel to find your shoes, put them in your cart and with one or two clicks of a button they are delivered to your address and the money is drafted from your designated account. No online forms to fill out, the info is saved into your subscriber entry with MSN Media. How easy and efficient would that be?

Instead of trying to dam the river, the answer may lie in fully opening the river up and making availabiltity and delivery the main marketing factor, not the content itself.

Category: Business
Tags: apple, Google, internet, money, MSN, funny or die
Related Forum: Money Talk

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Posted by MileHigh on 10/1 at 10:13 a.m.

quote:

Right now the trillion dollar question in every business school and marketing think tank across the globe is "how do we fully monetize the internet?"

welcome to 2001. LSU wins the NC in two years btw.

quote:

For example, Funny or Die is a very popular website that probably isn't worth very much on the open market because their content is free. What if the owners of Funny or Die negotiated with Apple Media or Google Media or MSN Media for their content to be provided to a subscriber service as a Funny or Die Channel? Say Google Media wins the bidding war for broadcast rights to the Funny or Die channel. If you want to view the content on the Funny or Die Channel you have to subscribe to Google Media to see it. Now what if you are a Apple media subscriber and still want to see Funny or Die then what would stop Google from offering tiered packages (like directv does) that would give you access to the Funny or Die Channel for a small fee? NOTHING.

Its been tried. And hasn't worked yet, I think primarily b.c it sucks to read text on a tv set.


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Posted by Martavius on 10/1 at 10:17 a.m.
Plus, there are already products on the market where you can stream internet content to your TV like AppleTV.


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Posted by supatigah on 10/1 at 10:30 a.m.

quote:
welcome to 2001.

pretty simplistic answer on your part, the question and its myriad of contributing factors has evolved quite a bit since 2001

quote:
Its been tried. And hasn't worked yet, I think primarily b.c it sucks to read text on a tv set.

what I am describing has not been tried yet

the content delivery mediums (TV/Internet/Phone/Radio/Newspapers/cars) are still segmented. The newspapers/radio are dying and the value for their content is going through the floor. So it would be easy to integrate their content into a Single Source Media Delivery concept, they don't really have a viable alternative.

The part that is holding it all back is limited wireless broadband capability, 3G network availability and the massive power that the TV networks and the cable/satellite services still have. Why would a cable or satellite provider partner with google or apple to be integrated into a Single Source Media Delivery concept right now?

They wouldn't, until someone presents the well crafted proposal that shows them how integrating their stand alone product into multiple other products can grab hold of the tiger's tail and open the way for potentially monetizing the internet.


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Posted by Colonel Hapablap on 10/1 at 10:33 a.m.

quote:
creating a full blown apple media service that provides satellite TV, web browsing, video streaming, email, consumer interaction (via an iphone ap or something similar) with the service and delivery method through your television monitor or your kindle or your iphone with it all tied up into one monthly bill.

Heard of Apple TV? That's where it's headed. They've managed to create the proprietary pipe inside the open internet pipe that you're talking about with iTunes.

I do think that micropayments are going to come to the forefront, again probably through an iTunes/iPad type interface. I read an interesting article yesterday on Google's new Wave service, where they guy was suggesting that it (due to the included API) could be a perfect platform for introducing micropayments into the information flow.

And ultimately, information providers are going to have to actually have to produce a product that someone wants to pay for.


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Posted by supatigah on 10/1 at 10:37 a.m.

quote:
Plus, there are already products on the market where you can stream internet content to your TV like AppleTV.

but that is still a segmented product offering

for example: I would have directv with an apple tv unit, cox internet for my ISP and att for my phone. Three separate bills, none of it integrated, the apple tv unit is just a variation on my HD DVR that displays streaming content instead of directv subscriber content.

I am talking about all media in my life coming from one subscription service source and being delivered to me by my choice of medium (phone/kindle/TV/car).


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Posted by tom on 10/1 at 10:42 a.m.

The internet is cheap and easy to use so there are almost no startup costs. Therefore competition is almost unlimited and profit margins are low. The only way to make reasonable long-term money on the internet is by creating something so large (Youtube) and or complicated (Google) and then hype the s*** out of it so that it is too expensive for some dude in a trailer to steal your (the) market.

FunnyorDie (or equivalent small site) is just not worth paying for. And if Youtube (or equivalent large site) went to a pay model, a free rip-off site would simply replace it.

I think an adjustment is happening with content providers, who were used to making tons of money from relatively little work. There is still money to be made, there is just less of it. Large companies are too bloated and ineffecient to compete. The deadweight is being cast off and new, smaller companies are replacing it.

Now if only the internet could do the same for government...


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Posted by Colonel Hapablap on 10/1 at 10:43 a.m.
wtf is funny or die?


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Posted by tom on 10/1 at 11:02 a.m.
Will Ferrel's version of Youtube.


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Posted by MileHigh on 10/1 at 11:06 a.m.

quote:

what I am describing has not been tried yet

yes it has. Xbox does quite a bit of that. Xbox live enables streaming of movies, surfing light, chat, music, games and much more. You just aren't paying attention. It may not be exactly what you desire, but its certainly close for the television. It has a way to go on other areas though.

quote:
for example: I would have directv with an apple tv unit, cox internet for my ISP and att for my phone. Three separate bills, none of it integrated, the apple tv unit is just a variation on my HD DVR that displays streaming content instead of directv subscriber content.

So it really comes down to billing? I think that this certainly is a differentiator, but how much? Right now, I can get my cable, cell phone, and internet on one bill. Content is partly missing from that, but I can get ring tones, PPV and other thigns on that same bill.

quote:
I am talking about all media in my life coming from one subscription service source and being delivered to me by my choice of medium (phone/kindle/TV/car).

why would I pay for any of that if I can get it for free?


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Posted by supatigah on 10/1 at 11:09 a.m.

quote:
FunnyorDie (or equivalent small site) is just not worth paying for. And if Youtube (or equivalent large site) went to a pay model, a free rip-off site would simply replace it.

right which is where the assimilation of market segments into single source delivery would allow the theoretical control of a significant segment of the internet.

Say for example you are an apple guy and you subscribe to Apple Media. Apple Media is partnered with ATT (for phone/wifi), directv/cox (for TV content/internet ISP/home delivery), and has exclusive rights to CBS/amazon/ebay/drudge/wall street journal/ABC/espn/facebook/wikipedia

I am an MSN guy. I am offered through MSN media verizon (phone/wifi), Dish network/comcast, and MSN Media has exclusive rights to NBC/New York Times/Yahoo/Twitter/Ask

And then a google guy has his own package with google/youtube/ABC/espn whatever

If I want access to a website/channel that is not available on my media provider then I have to pay a fee to add it to my package. Say I want facebook on my MSN package but its rights are owned by Apple media. I have to pay an extra $0.05 per month to access facebook on my MSN Media network. Or I use my MSN media equivalent to facebook and don't pay anything extra. I get one bill for my media connection and content consumption needs.

Monetizing a site like funny or die would happen when a media provider like google media or MSN media would bid to gain an exclusive with the funny or die guys their content to be added to the MSN media package. MSN media collects the subscription fees, sells the network sponsorships/commercials and shares the wealth with their exclusive partners


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Posted by MileHigh on 10/1 at 11:14 a.m.
why would I want any of that when I get pretty much everything I could possibly want for free right now?


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Posted by kfizzle85 on 10/1 at 11:15 a.m.

The main reason that something like this doesn't formally happen (as opposed to just rigging up your pc to your tv or putting a netbook in your dash or something) is really quite simply because of copyright. We seem to be making slow progress towards more sensible copyright solutions, but it is still hodge-podge. Trying to get home internet/cable/whatever and something auto-embedded under one umbrella (for what purpose? I don't understand the real benefit of that) seems like an enormous and ornery task.


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Posted by Rivers on 10/1 at 11:18 a.m.

Good question...never heard of it.

Along the same train of thought...I suppose perspective is everything...From where I sit in Florida I see people leaving their homes and the state in droves...

These people are concerned about a roof over their heads, getting a job, and where their next meal is coming from, not internet content, how it's packaged, how it's priced, etc.

Mish had a letter from a subscriber a few days back; the letter writer told his cell phone provider that he was shopping for a better rate. The cell phone provider immediately offered to lower the letter writers monthly cell phone rate.

Right now, info providers/service providers have little pricing power. The best of the bunch will manage to hold on, the rest are soon to be toast.


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Posted by kfizzle85 on 10/1 at 11:20 a.m.
If anything has proven an axiom, it's that restricting use is an absolute deal killer. Someone needs to develop a wifi internet service (like google +whoever with wimax or att with lte) first. Once the backbone is in place, you can tinker with figuring out how to slice and dice it up.


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Posted by supatigah on 10/1 at 11:22 a.m.

quote:
why would I want any of that when I get pretty much everything I could possibly want for free right now?

because it wouldn't be free any more and just like when cable tv came along in the 80s you had to choose between the free OTA stuff that was very limited in scope or pay for cable. Now we choose between cable, satellite and free OTA. In cable and satellite subscriptions you have multiple tiers of offerings to choose from. OTA you get what is free and that is it.

a small picture example...I have directv and I don't get Cox Sports. So I miss the LSU replays, the Hornets games, HS sports etc that Cox has exclusive rights to. Why can't I pay a fee and get cox sports on directv? Because cox sports is exclusive to Cox Cable.

What if Amazon was exclusive to Apple Media? but I could be a subscriber to MSN media and pay a small fee that I never even notice on my bill for access to Amazon? Otherwise Amazon is unavailable to me because I don't subscribe to the media network that amazon is offered on.


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Posted by Cold Cous Cous on 10/1 at 11:32 a.m.
quote: I do think that micropayments are going to come to the forefront, again probably through an iTunes/iPad type interface. Micropayments have been the hot topic for like 8 years now and have never come to fruition, with, as you note, the one glaring exception of iTunes. why do you think the model has succeeded in that one arena only?


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Posted by prplhze2000 on 10/1 at 11:34 a.m.
gee, what website would that be?


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Posted by kfizzle85 on 10/1 at 11:34 a.m.
Because Apple doesn't own the pipes and ATT can't restrict the use of them. Breaking up the internet so that you could only access certain parts (what happens with new sites are created? What about TD.com, what if no one wants it?) would be an absolutely colossal step backwards.


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Posted by kfizzle85 on 10/1 at 11:36 a.m.
Amazon does decent business like that. iTunes works because once you buy the download, you own it. This pay %5.99 and you get the video for 24hrs shite does not fly.


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Posted by supatigah on 10/1 at 11:36 a.m.

quote:
Once the backbone is in place, you can tinker with figuring out how to slice and dice it up.

this is the real missing piece.

to make all of this work and be worth the expense you need a powerful network that makes your Media network purchase fully integrated into your life.

That you can go on a business trip and your network can send you the Saints game live on your iphone while you wait in an airport. You get in your car for the ride home and the episode from The Office that you missed is playing on demand on your car's onboard monitor. Then you walk into your house sit down and watch espn sportscenter on your 52inch TV in PIP while you pay bills and answer emails on the TV screen. Then you leave the Espn Channel to shop at the North Face Channel on your media network for a new ski jacket and you pay for it with two clicks of your wireless mouse. And all of that accessibility and consumption brings you one bill every month that you pay

I am talking about wifi, programming on demand, ez pay, exclusive web content, exclusive TV content and anything else media related your heart desires all rolled up into one package for your home, your car and your cellphone/laptop/kindle


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Posted by kfizzle85 on 10/1 at 11:40 a.m.
The real missing piece is still copyright, imo.


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Posted by supatigah on 10/1 at 11:52 a.m.

quote:
Because Apple doesn't own the pipes and ATT can't restrict the use of them.

which is the big step that needs to be taken

what if ATT and Apple were partners? and they bought up exclusive rights to TV networks and valuable websites?

what if apple and ATT paid a large sum of money to the NFL for an exclusive and the only way to watch the NFL was to subscribe to Apple Media or pay for the NFL Channels from Apple Media to be added to your MSN or Google Media package? Wouldn't that increase the value of Apple Media by a significant margin? Wouldn't that create subscription and ad revenues for Apple Media that would be staggering?

quote:
(what happens with new sites are created? What about TD.com, what if no one wants it?)

access to the internet wouldn't be eliminated, quite the contrary. Internet sites would be killing themselves to increase their profile in the hopes that a Media network would buy their exclusive rights for their network. Access to websites with exclusive partnerships with a media provider like apple or msn would be pay for play only.

Say a Media network like Google Media has a regional package for the Southeast US and wants to add region specific content to that package. They do some research and see the numbers that free td.com is pulling on their google analytics. They approach chicken and offer him a deal for an exclusive rights to td.com for google media. Chicken accepts the deal and to access td.com you have to be on the Google media network or pay an extra $0.01 per month to add it to your MSN or Apple Media package.

Chicken has just monetized td.com in a way that was never available to him before and is now under the Google Media umbrella


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Posted by kfizzle85 on 10/1 at 12:04 p.m.
The general idea is kind of cool, but it still seems like a step backwards. You're segmenting it and breaking it up. I'm fairly positive there are regulatory issues with that as well, as far as monopolizing information and restriction of use.


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Posted by supatigah on 10/1 at 12:06 p.m.

quote:
The real missing piece is still copyright, imo.

maybe but the technology has long surpassed the copyright laws and made them almost obsolete today

same thing with patents. in my industry (chemicals) we innovate products and applications constantly but no one outside of the really big companies patent their stuff any more. To secure a patent you have to disclose the formula of the product and a simple google search gives any one your patented formula for their use. So they steal it and sell it and take your market share and you may not even know about it until it is too late. And then trying to sue them for it can be even more expensive, whether they are guilty or not.


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Posted by kfizzle85 on 10/1 at 12:11 p.m.
I don't mean copyright laws, I mean the ability to secure copyrighted material. None of the media companies will give up [legit] access to their stuff without seemingly heavy restrictive use. No one has been able to get enough of them on-board to make it feasible. Hulu seems to be making headway in this arena, that could be the start of it.


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