Is The Internet’s Economic Model Sustainable?

I generated quite a bit of negative buzz last week when I riled up some of our readers with a provocative article regarding ad blocking.

While most of the comments were reminiscent of the sort of flaming that killed usenet as a viable platform for discussion, there were a few reasonable readers with opposing viewpoints who took part, and some good arguments were made for both sides.

Ad blocking certainly isn’t going anywhere. It isn’t limited to the Firefox web browser. Ad blocking solutions exist for Internet Explorer, Opera, Safari and Google’s Chrome. For that matter, OS X and unix users don’t even need to bother with a web browser add-on, they can just add offending domains to /etc/hosts. While I doubt that vendors like Microsoft, Apple or Google would ever make ad blocking an intrinsic behavior of their browsers, there will always be someone out there who will pick up the gauntlet and create an add-on to do the job.

The fact of the matter remains, users who utilize ad blocking add-ons are creating and using a derivative of the original content, something that violates copyright law. Not to mention those web publishers who have a terms of service requiring users to view their content in it’s entirety. So, whether for or against ad blocking, expect to eventually see litigation regarding copyright and terms of service violation.

Obviously ad blocking is problematic for web publishers who depend upon ad revenue to make their content available. Is this the end of the internet’s current financial model?

In a word, no.

The amount of users using ad blocking add-ons is miniscule. If 20% of Firefox users are using an ad blocker, that still only accounts for 4% of all internet users. If 10%, or even 20%, of all internet users were using ad blocking technology, you still have the 80-90% that only install add-ons necessary to enjoy content, like Flash. So the web publisher doesn’t really like the idea of people using ad blocking technology, but it isn’t a threat to his livelihood either as long as ad blocker usage levels remain where they are.

I’m all for playing devil’s advocate though, so let’s explore what the alternatives are to the current ad based financial model:

• Membership Sites start charging a monthly fee for membership. This will do three things:
  1. The vast majority of websites who do not want to provide content for no financial return will disappear. Would you pay $5 a month to read Connected Internet? How about the 40 other sites you read on a regular basis? You guys are probably a lot like me, and are all over the web soaking up information and taking part in discussions. Enjoying internet content just became really expensive, didn’t it?
  2. The extremely vocal anonymity crowd will lose their minds because they have to sacrifice some of their sacred anonymity to enjoy web content.
  3. There will still be sites giving you the same content for nothing, except now you are a pirate for using them, just like you would be for downloading the latest music, software or movies. While the small percentage of ad blockers who feel no shame for doing so because they defy the idea of intellectual property won’t care, the average person doesn’t want to intentionally break the law.

• Networks The ad based financial model of the internet has failed, and the larger internet concerns form networks, just like television. Your internet service provider has to pay to access the various networks. As a result, your monthly internet access costs more than what you are paying now. Again, those sites not affiliated with a network who don’t wish to produce content gratis disappear. Your internet gets a lot smaller, and you’re paying more for it.
• Metered use Litigation spirals out of control, and some rocket scientist’s answer is to legislate a mandatory pay-as-you-play scheme for the internet. Some goofy client-server relationship is integrated into the major web browsers, and you are charged by your isp for your actual usage. Sounds expensive to me. Again, someone will work around this, but you’re pirating when you use a hacked browser to get the content for free, and there will be even more litigation.

I guarantee you if any of the above three models ever became a reality that the most vocal opposition would come from the people who presently support ad blocking.

Face it, while the current model may annoy you to the point of running specialized software to subvert it, it’s the best solution we have. Both for publishers providing you the content and for users enjoying access to unrestricted content.

While there may be a sizable chunk of bandwidth consumed by content that is not of use to anyone and which no one would miss, think of all the great content produced by people that would disappear on a web with a different financial model.

Some people use a condescending tone when referring to blogs. I used to feel the same way. I don’t anymore. There are a lot of people out there bringing content to the web that is of tremendous value. You don’t have to be a journalist to blog, and frankly I’ve read better commentary from bloggers on the same topic than what “legitimate” news sites have had to contribute at times. Not to mention that depending on where you live (and yes, this includes the USA) your media news coverage is censored to some degree or other. Blogs are and have been an instrumental vehicle for delivering news that you may not have gotten otherwise. No, I don’t want a web without blogs, even if that means the overall noise level of the internet increases exponentially with their presence.

The ad-based internet isn’t going anywhere, even if a percentage of users find advertising so intrusive that they use ad blocking browser add-ons to filter their content. If you have a better idea please share it in the comments section so I can steal it we can discuss it further.

For more on this subject take a look at Joseph Rosenbaum’s article Ad Blocking Technology – The Potential Effects & Implications.