One Giant Paywall?

There is a terrible stalemate going on. Content creators need, and deserve, income, but people aren’t willing to pay for it. Instead, they trade their identity, bandwidth, and user experience in the form of ads.

One of many problems with this, is the arms race that ensues. People become desensitized to ads, rendering them less effective and profitable, forcing providers to become more intrusive, compelling users to further defend themselves, encouraging more extreme tactics, and so on. More than half of mobile bandwidth is currently used to serve ads. This has lead to the rise of ad blockers, and a second arms race of ad blocker blockers, and ad blocker blocker unblockers. None of this is sustainable, and in the end, the quality and breadth of content in the world suffers.

The reason ads work is two-fold: first and foremost, because the user simply has no choice but to pay — the ad is served directly to them in the same request as the content. Second, people don’t realize the true cost of what they are paying. Aside from the increased expenditure on hardware and bandwidth required to render the ad-powered web, if someone were to harm another, one of the best datasets they could gain access to is that of an ad network. They would find out:

• their current location, past location, and future location
• their interests
• their embarrassing interests
• their age, gender, religion and sexuality
• who their family, friends, co-workers, and peer groups are
• and much more

A name, birthdate, and hometown can be used to recreate social security information.

The ideal situation would be if people paid nominally for each piece of content they consumed — like they do with ads. Unfortunately this is just not possible today. The friction, cost, and risk involved with effectuating payment is simply too high. Credit card forms require as many as 15 fields to complete, and the fees are insurmountable for micro-payments of a few cents. Not to mention having to expose themselves to the risk of being overcharged, mistakes, and theft — all to read an article for a minute.

People in the crypto space are experimenting with bitcoin and related technologies (as bitcoin itself is also too expensive for micro-payments) to solve these issues, but there is still another huge barrier: the cognitive dissonance of having to make a payment decision. People hate making decisions, and they hate it even more when those decisions involve spending money. In general, it is much easier to sell someone once at a higher price, than it is to sell them many times at smaller amounts. Crypto alone doesn’t solve that. Even if the payment process were streamlined down to clicking a single button, having to repeatedly make that decision is simply too painful.

That’s another incredible advantage of ads: they can set any price they like without having to ask. How much will it cost to view this content? Will I be served a multi-megabyte video ad, or simple text? Will they capture and share every minutia of my behavior across many sites running it all through Watson, or just record a pageview? Who knows, certainly not you, but you pay every time, and there are no chargebacks to worry about. This is extremely powerful.

The technique that best attempts to address these issues is subscription-based paywalls. Publishers like the Wall Street Journal limit access to content, then request a single payment for full access to all they have to offer. Minimal friction, minimal dissonance, and immaterial fees — so why doesn’t it work?

Because that’s not how we use the web. People don’t visit a single site to seek out content. They search then nimbly hop from link to link building knowledge from an amalgamation of sources. The entire web is one big site. That’s why Yahoo failed, why Google is a star, and why paywalls are not only ineffective, but straight-up infuriating. It’s spectacular really. Nowhere else can you witness such an entitled visceral loathing for being asked to reasonably remunerate someone’s hard work. Hell hath no fury like a surfer obstructed.

Given these usage patterns, paywalls fail miserably. The typical consumer would have to sign up to hundreds of properties, costing thousands of dollars per month. If they consumed every bit of content at the New York Times, the $25/month could be fair. But they don’t, leaving them with a glut of extremely underutilized and over-priced subscriptions.

The solution is not easy, but I do see one avenue of investigation: a single paywall. Content creators must unite so that the breadth and depth of their offerings is so compelling, and so far-reaching, that people not only can’t live without them, but accessing them does not interfere with their flow. This would have to include at least every news organization in the world. Users would pay some reasonable monthly fee, giving them unfettered access to all available content. Creators would compete behind the paywall, getting compensated based on the amount of traffic they draw. For example, if all subscriptions amounted to $100m per month, and The Economist was responsible for 1% of all views, they would earn $1m that month. The offering should also be friendly. There are many unbanked people, people without credit cards, kids, students, poor people, etc. A single subscription should be shareable with 5 or 10 friends so information doesn’t get locked up, and piracy doesn’t become rampant. If 3% of the world paid $20 a month for access to all the news, that would generate about $60 billion a year — or double the revenue of the US newspaper industry.

Additionally people must start being educated on the true costs of “free” content. This includes the non-monetary costs:

• exposure to enormous risk from detailed identity tracking
• significantly degraded user experience from slow page loads, popups, nag windows, distracting elements, and so forth
• reduced security from 3rd party code required to inject ads
• constant brainwashing eating your zen

Then there is the real money costs. If half of mobile bandwidth is used to serve ads, another percentage of cable bills, and higher powered devices are required to render the web, this could equate to $100 per person per month in hard cash being spent — none of it going to the content creators. Twenty dollars per month for an ad-free web would be an 80% savings.

We happily pay for Netflix, we pay for cable TV, we pay for music streaming and iTunes, we pay for apps and games —all with piracy easily available. We can fix the usability issues and start paying (less) for words.