Text Patterns - by Alan Jacobs

Sunday, December 21, 2008

revenue

Writing below about the now-defunct web services Stikkit and I Want Sandy, I remarked that, as far as I could tell, Rael Dornfest and the other makers of those services never even tried to come up with a revenue model. Certainly they never asked their users to contribute to the maintenance of the service. Instead, Stikkit and Sandy were offered for free until (I suppose) that became unsustainable, and then they were simply shut down.

James Surowiecki, writing recently in The New Yorker, points out that the newspaper industry is in a curious situation, because industries usually fail when people lose interest in their product. But, Surowiecki points out, “people don’t use the [New York] Times less than they did a decade ago. They use it more. The difference is that today they don’t have to pay for it. The real problem for newspapers, in other words, isn’t the Internet; it’s us. We want access to everything, we want it now, and we want it for free. That’s a consumer’s dream, but eventually it’s going to collide with reality: if newspapers’ profits vanish, so will their product.”

“For a while now,” he continues, “readers have had the best of both worlds: all the benefits of the old, high-profit regime—intensive reporting, experienced editors, and so on—and the low costs of the new one. But that situation can’t last. Soon enough, we’re going to start getting what we pay for, and we may find out just how little that is.” This is no doubt true, and not just for traditional journalism.

Consider this: Wikipedia — or, more accurately, the Wikimedia Foundation — is trying to raise a bunch of money to keep the service going. And they probably will succeed: even if they don't raise all the money they want, Wikipedia is unlikely to be shut down as Stikkit and Sandy were. But the point is, it could happen. In a very short period of time, Wikipedia has become a fixture in people’s lives, something we all expect to be there whenever we want, something we are confident we can count on — just the way people for many decades thought of General Motors. But nothing is forever, and in tough economic times, we may discover just how fragile some of the economies of the internet really are.