Re: Swedish Websites

From: John Gaskill <jg_at_info-central-usa.com>
Date: Fri 03 Aug 2001 16:37:43 -0500

>DENNIS VALDES <dvaldes_at_inquirer.com.ph> WROTE:

>Perhaps we can start a discussion on whether this revenue
>model might work for US websites or not.

>" SWEDISH DEVELOPERS MARKET 'TRIC' TO SUPPORT
> CONTENT PROVIDERS"

< quote snipped -- complete article link retained --
follows >

> http://www.europemedia.net/showfeature.asp?ArticleID=4658


Engage's 3rd Qtr. 2000 report on the internet indicated
that out of 142 million web servers worldwide, 82 million
of them were in the United States. Though I am sure the
numbers have changed since then and the ratio differs
now, the importance of these numbers is relative to
how many web publishers might exist in a market served
by a smaller number of internet service providers
(ISPs).

(the following example is hypothetical)

For the sake of this discussion, let us assume that
there are ONLY 500,000 different "content publishing"
web sites doing business in the USA and seeking a
revenue stream.

Let us also assume that there are only 10,000 ISPs, but
the top ten of them control 50% of the web surfing
market.

Because the marketplace, the internet, allows web users
freedom of choice to visit free or paid sites, free sites
will tend to get more usage because of the effects of the
Law of Supply & Demand, specifically that an equal good
with a lower price enjoys greater demand than the same
good with a higher price, all else being equal.

If you join a collective publishing guild that decides
to block access to your site unless it gets paid by ISPs,
you have introduced an intermediary structure that must
be paid to "put the strong arm on ISPs" for money. And
that probably means they have to be paid in advance by
you in order to "bring ISPs around" to their point of
view.

Guess who is going to pay???

The next important question is who decides on who gets
into the collective in terms of web sites? Will these
sites be complimentary? Will they be competitors? Will
they only be sites generating over a million unique page
views per month, or only those generating something less?
Who decides what the minimum "quality" level is for
membership in the collective. Does any single site or
the operator have veto power over entry? Will every
site be allowed or "made an offer they can't refuse" to
join?

The last question is how to divide up the revenue,
assuming the ISPs can be brought to the table?
Will site operators be any better off with what will
no doubt be a smaller revenue stream than can
be had from current advertising networks?

Assuming there are 60 million paid internet
subscriptions in the USA and ALL OF THEM contributed
$1 per month for "content access fees" to your collective,
there would only be $60,000,000 to be shared among
participating sites. If all 500,000 publishers joined
that means $120.00 per month for each, BEFORE the
collective took its cut.

The collective operator is the guy who makes the dough.

The likelihood that any serious money would make it
down to the average site operator is based on HOPE.
While it sounds like a good idea it is worse than "voo
doo economics."

Without 100% participation by publishers, ISPs will
tell your collective to go to heck. Without legitimate
traffic in your logs, you can't sell advertising.

The practical truth is that schemes of this type only
work in regions where internet connection services
are controlled by a few bureaucratic entities who
fear that not complying with the collectives demands
will result in new competition, i.e. more ISPs, being
allowed on the playing field.

In Sweden it might work. In the USA, forget it.
Save your money if someone offers you a
chance to join such a setup for only $250.00.

My $ 0.25 worth.

John Gaskill
jg_at_Info-Central-USA.com
Want more advertising for your site?
http://Info-Central-USA.com/site-ads.htm



Received on Fri Aug 03 2001 - 16:37:43 CDT