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The Almighty Buck

Piro On Why .Coms Don't Work 300

cabbey writes: "Say the name MegaTokyo and most people, if they recognize it, think 'one of the best manga/comics on the net today. (ignoring the recent 'stick figure dom' days while Piro was moving).' But few people think about the social, economic and philosophic issues the authors' rants can delve into. This morning Piro put up a rather long 'rant' that's really a catching insight into why the dot-com world didn't have a snowball's chance in hell of surviving. (archive link to the rant in question, it's below the comic. ;) "
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Piro On Why .Coms Don't Work

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  • Oh yeah... (Score:3, Funny)

    by OblongPlatypus ( 233746 ) on Wednesday February 27, 2002 @09:35AM (#3077315)
    ... a good slashdotting is just what Piro needs.
  • by iamjim ( 313916 ) on Wednesday February 27, 2002 @09:38AM (#3077331)
    Have we heard enough about why the .com "era" failed? Enough "dot bomb" and other witty phrases refering to a once disturbingly propserous era. The fact is that people got dumb for a while. Things have worked for a certain way for a long time. I am sick and tired of reading the news about how someone on wall street had a bad weekend and now the nasdaq is down 200 points. Little do we know it, it is a coffee shop across the street of the trading rooms that switched their regular coffee to folgers crystals two years ago - lets see what happens?
    • by Anonymous Coward
      Actually, his response, if read, was actually pretty cool, talking about respect being the currency of the net, and other thoughts that were new to me.
    • by nomadic ( 141991 ) <nomadicworld.gmail@com> on Wednesday February 27, 2002 @10:04AM (#3077490) Homepage
      The fact is they're still dumb. They saw that the internet was popular, and their kneejerk reaction was to try to think up a way to capitalize financially on that. They're still doing it.

      Analysts come up with figures: x% of internet users will be going wireless by 200y. So they just pump millions of dollars into creating infrastructure, never bothering to look at those figures with any intelligence. How did some guy in a little office downtown come up with these figures? Surveys? Estimations? Listening to wireless company executives' pipe dreams?

      Look at interactive TV. For YEARS they've been churning out one failed interactive TV venture after another. They've managed to convince themselves that people want to talk to their TV, and it doesn't matter how many times it fails, they're still lining up to make the next doomed platform.

      Not everything can be commoditized, and it's a sad statement on our current culture when the first question that pops into some greedy, inept "entrepreneur" is how much can I make? Piro put it very simply and clearly; just because people like something doesn't mean they're going to pay for it, especially if they used to get it for free (it was a nice change from his usual rants, which usually run along the lines of "this strip has sucked any enjoyment out of my life, and I now live in a constant hell of fatigue and despair. I'm so very, very tired..." Wish the poor guy would realize we don't mind if a strip is a few days late.)
    • A while back I referred to that period in our history as "just the introduction to the Opposites". Funny, nobody linked to the rant on my comic...
    • Speaking of "dot bomb," I've got a suggestion for ICANN on a new TLD.

      Just imagine. . . newfangledsolutions.bomb. . . pointclick.bomb. . . amazon.bomb. . .
  • Jon? (Score:5, Funny)

    by EricKrout.com ( 559698 ) on Wednesday February 27, 2002 @09:38AM (#3077333) Homepage
    Say the name MegaTokyo and most people, if they recognize it, think 'one of the best manga/comics on the net today. (ignoring the recent 'stick figure dom' days while Piro was moving).' But few people think about the social, economic and philosophic issues the authors' rants can delve into. This morning Piro put up a rather long 'rant' that's really a catching insight into why the dot-com world didn't have a snowball's chance in hell of surviving.

    Mr. Katz:

    If you can't even post commentaries under your own identity anymore for fear of 200 comments blasting your credibility and cliched statements, I think it's time you pack your bags and leave.

    Sincerely,
    Slashdot Users, #2 - #570,000
    ;-)
    • Re:Jon? (Score:2, Insightful)

      by darketernal ( 196596 )
      Well, as user #196596, count me out.

      If you compare every piece of writing that delves into something a troll like you wouldn't understand to Katz - yes, agreed, Katz can get repetitive and annoying AT TIMES - then you should be the one packing your bags, in shame.

      Fred is a smart guy and wouldn't rant giant loads of trash on his own page as you so allude him to. Give him a break. He's no industry analyst or Robert X. Cringely. He's just a manga artist that vents his thoughts on his own personal web page - just like thousands if not millions of other normal people around the world who share themselves with each other.

      So is the problem that each time something gets slashdotted that it goes under a vastly different scrutiny filter? If you're mad at the story, shouldn't you be more mad at the person who submitted it? It's like submitting a story to someone's livejournal!

      I rest my case.
      • Re:Jon? (Score:2, Funny)

        by Mynn ( 209621 )
        Just filter him out, only takes a few minutes ... after a while, you stop comparing others to him and suspect it's a "ringer".

        That said, I'm quite impressed with MegaTokyo and that Piro and Largo (Fred and ???) have kept it going despite the trials that are life.

        *deletes large rant about another web comic strip that is run by someone who does it as their full time job and can't keep up half as well to their stated commitments and decided to add to their burden by producing a subscription sideline*
    • by cabbey ( 8697 )
      I am NOT Jon Katz.
        • I am NOT Jon Katz.

        Of course, that's exactly what Jon Katz would say if he were trying to post an Ask Slashdot under a nom de plume, isn't it?

        You'll have to do better than THAT, Jon.

  • Here's the article (Score:4, Informative)

    by Talisman ( 39902 ) on Wednesday February 27, 2002 @09:40AM (#3077344) Homepage
    I knew it would get /.'d, so here it is:

    As you can see, there is no comic today - that's my fault, and involves many factors (the most significant of which is my complete and utter inability to draw tonight. once you go thru 10 sheets of paper its time to face facts and go to plan 'b') So, you get a new comic Thursday and Friday this week instead of Wednesday and Friday. What's a few more hate e-mail this week, i'll live.

    I have a tendency to forget things sometimes. Like, for instance, Sweetest Day. Valentines day. Seraphim's Birthday. The fact that you buy gifts for people at Christmas. Things like that.

    Even when i do remember these things, the execution of them often has tragic results. I don't send Seraphim flowers typically. Mostly because of one incident where i sent her this amazingly beautiful arrangement that had pollen so toxic that we had to lock the bouquet in the bathroom to keep it from killing her. This florist has subsequently gone out of business.

    When it comes to gifts, i'm not big on 'oh, its a holiday, i gotta find something, anything' kind of gift giver. I'd rather come up with something REALLY nice, or really useful. This attitude towards gift giving makes it harder than normal to find things for the people in your life. More often than not, i tend to push off these shopping tasks until it is too late, resulting in the 'pick up anything you can find' method of shopping the day before you need it (i've purchased chirstmas presents on christmas day. Yes, i am that pathetic.)

    Anyways, as you might expect, valentines day this year was even worse than usual. Seraphim told me without hesitation that she was more than happy with the botched shirt and candy box gift i attempted to give her days earlier (long story), but i still felt BAD for not having something to give her on valentines day itself. So, i think to myself, i'll send her an e-card! Yea! the ultimate loser geek thing to send to your girl.

    For years, i've been sending out Blue Mountain Arts cards to Seraphim, often forgetting that i had already sent her that particular card (bear themed cards are popular between us) but even so, i don't do it THAT regularly. So imagine my surprise when i pulled up Blue Mountain Arts that day and discovered that this once free service was now something you had to pay for.

    So, as a loving boyfriend, did i pony up the dough and send her a card? Hell no.

    There's an inherent part of human nature that just makes you bristle at having to suddenly pay for something that you didn't have to pay for before. Have a great free service? Sure, people will use it and love it. The business model that says 'give it to them for a while for free so they fall in love with it, then start charging them?' - er, sorry guys. Nice business model, absolutely no understanding of human nature. Since a significant portion of the dot-com economy was based on this model, it should have been no surprise to anyone that the whole thing fell on it's collective ass.

    I can totally understand why Blue Mountain Arts switched to a pay for use model. All that traffic has to use a LOT of bandwidth, and with companies no longer hosing advertising dollars around without any real worries as to whether it was effective or not, there's gotta be some way to pay the bills. So, the idea that you get a significant chunk of your users to pay a small fee makes a lot of sense - after all, you get a LOT of people to pay a LITTLE money, you're problems are over, right? Sadly, i don't think this is really the case. It goes against the very nature of the web.

    Lets face it. One of the reasons people LIKE the internet is that it gives people access to a LOT of information and entertainment for very low cost. It's not free - most of us pay a reasonable amount of money for bandwidth and internet connections - but on the net we pretty much like to think that once we've paid admission, we're free to roam and do whatever we like. Transferring information on the net is CHEAP. its so cheap, you can pretty much give it away for free. If people like it, they keep coming back for more. The commodity of the internet isn't money, it's access. It's connections. You're wealth in net terms is defined by 'what you have access to'.

    We all have friends or people we know who can find just about anything, legal or otherwise, on the net with little or no effort. MP3 files are a good model to look at for this. A lot of great music is pretty much free for the asking at sites like mp3.com but most of the files traded around aren't really 'legal'. Are people really willing to pay for Mp3 files? Not really, because we already have it in our minds that mp3s are a 'free' resource. We don't feel we get any value buy paying for it. If we DO slap down money for music, we want the tangible piece of circular plastic where we can say 'this is mine'.

    Then there is this rather interesting phenomenon that often occurs. Once you have the CD, you burn MP3 files and make them available for others over the net. Why would someone do that? Because it adds value to their purchase. We get not only the music, but the added benefit of having added something to the collective pool of information. You've added access to this music, you've increased your own online 'wealth'.

    One of the reasons i started Fredart years and years ago was that i found that i wanted to provide my own thing to the 'pool'. For anime fans, especially back then, there was this whole world of japanese anime and manga where entire series lay waiting to be discovered. If nothing else, you could take all the information available on them, collect it together into a webpage, and make it more easily available for people seeking info on a particular series. At the time, I remember noticing that there were no web pages on 3x3 Eyes, so i decided that i would make one. Pai's Page was, really, the first web page on the series, and i did a fairly good job on it. Once making it, however, i had little interest in working any further on it. There was something that just wasn't satisfying about just re-arranging what was, in effect, someone elses work.

    Around that time i started to explore japanese websites that revolved around anime and manga. In japan, it was considered bad form to just scan and post copywrited images, so japanese fans found that the best way they could express their loyalty and love for a series and its characters was to do their own fan works. I really liked this model, and Fredart was direct derivative of those style of pages. I wanted to provide NEW material to the web, not just stuff i had found surfing around, or even stuff scanned out of magazines. I was adding something original to the pool, not just reorganizing and recollecting.

    I think that one of the things you get when you add to the pool, so to speak, is a certain amount of respect. you don't just take, you give as well. The net lends itself well to new ways that people can provide things to the collective pool. You don't need to be sponsored and paid for by some big media company to get your work in front of millions of people. The old model was that you had to be able to convince a bunch of people with lots of money that you were worth promoting before you even had a chance to see if people would respond to your work on a grand scale. This lead, for the longest time, to the sad state where only a small number of people decided what the public was going to see. Also, since these same people convinced all of us over the years that ONLY people that they felt were good enough to promote were worthy of entertaining us, that we should not waste our time entertaining ourselves - only paid for entertainment was worthy entertainment. Worked great till the net came along.

    The net shatters some of the basic structures that people have used for ages to control the dissemination of information. Easy to send, easy to duplicate. The Dot com economy was doomed from the onset because it was formed on the basis of the idea that by just getting out there and capturing the attention of a big chunk of the internet population, the money would just start flowing in. Heh. Some hard lessons have been learned. It doesn't really work that way.

    If you think about it, the real currency on the net isn't money. It's respect. Either as an individual or as an entity you gain respect by providing either new material to the net pool, or you provide effective and useful ways for people to access information that is already out there. A lot of big sites that do this started out small (even yahoo. i remember when it was just a link list over at Stanford run by two guys). Of course, respect doesn't pay the bills, so there always comes a time where you have to start looking at how to not only survive, but maybe even prosper a little on all this.

    It's in this armature where the real economic viability of the net rests. There is no direct relationship between turning respect into dollars, but that doesn't mean to say that there isn't some relationship between the two. In my opinion, i feel there is a trade off - when you start charging for what you provide, you loose some of the respect you've earned, because now people have traded cash for it. The nature of the relationship has changed. When you move to a pay-for-services model, it completely changes the nature of the interaction between a site and its users. It's especially bad if people suddenly have to pay for something that was, for the longest time, free. Honestly, i think that it's human nature to almost feel 'betrayed' - which, of course, leads to a real loss of hit points in the respect column. ^_^;; The paradox here is that once people loose respect for a site, won't they be less willing to pay for it?

    Odd train of thought, huh? I've had to think a lot about stuff like this lately. Running a site like MT is expensive - we've crested 10 million page views this month already, but at the same time the site is almost no different than it was when it was a non-working html template that i had pieced together over a weekend a year and a half ago. Largo and I really do, i think, have a little bit of an understanding of what makes MT what it is - tho i do have to tell you the mind boggles at why so MANY people seem to find the site worth visiting - and with that understanding comes a responsibility to make sure that whatever we do to help keep the site alive NEVER messes with those things. To me, the respect people have shown me over the years for all the hard work and dedication we've put into the site is something i never want to trade in on - because its worth more than any amount of money to me.

    I suppose that its the post-dotcom economy sites that now bear the burden of figuring out how to survive in the wired. How DO you survive, pay hosting bills, make enough money to support yourself and others who help run the site? Traditional business model ways of looking at things has already proven that we all know less than we thought we did. Largo and i do it the hard way - we both work full time jobs AND do this silly site. This is not, of course, ideal, and speaks more about our lack of useful brain cells than any kind of success as a website.

    I think that an understanding of human nature is almost more important here on the web than in any other business environment. Why? because unlike in the real world we are used to, we've been trained to an 'us and them' mentality in regards to our entertainment and things that we purchase in stores - we are consumers, they are providers. On the net, its different. We are all one in the same - fredart.com was just as accessible as ibm.com. We all can make websites. We all KNOW we have the ability to reach millions of people. Many sites, even Megatokyo itself, has proven that individuals can do this. You dont need to be a big corporation. We all have the same basic presence on the net - its how we use it that makes us who we are here.

    Oh, and Seraphim's reaction to me being so cheap that i wasn't willing to pay for a subscription to Blue Mountain Arts to send her a valentines day e-card? Her answer was, if you think about it, not surprising: "The hell with that. you're little ASCII heart was so cute."

    It's not the money you spend, its the thought that goes into it. You can't buy respect, you can only earn it.

    • by Grmdzo ( 236145 )
      I think that an understanding of human nature is almost more important here on the web than in any other business environment. Why? because unlike in the real world we are used to, we've been trained to an 'us and them' mentality in regards to our entertainment and things that we purchase in stores - we are consumers, they are providers. On the net, its different. We are all one in the same - fredart.com was just as accessible as ibm.com. We all can make websites. We all KNOW we have the ability to reach millions of people. Many sites, even Megatokyo itself, has proven that individuals can do this. You dont need to be a big corporation. We all have the same basic presence on the net - its how we use it that makes us who we are here.

      I found this gentle rant had a well considered analysis of how some people perceive the web. While some parts of the web enhance and complement my traditional information needs, such as dictionary lookups, news, product information, the volume and diversity of the rest of the web helps me to "see further" (to paraphrase Sir Isaac Newton [upenn.edu]). I can start by building on the knowledge and experience of others, rather than repeating their trials and experiments.

      Piro discusses adding something very much like a bait-and-switch scheme to the Field of Dreams [fieldofdre...iesite.com] business model. "If you build it, they will come". I think this strategy works well for making information available, but does not work well for making money from those visitors, unless they have come visiting intending to spend money.

  • by Bill the Cat ( 19523 ) on Wednesday February 27, 2002 @09:42AM (#3077360)
    I think people used that arguement when cable TV was in its infancy.

    Offer people a good product, at the price the market is willing to bear, and they will buy it.
    • Obviousness (Score:3, Insightful)

      "Offer people a good product, at the price the market is willing to bear, and they will buy it."

      Um... well, obviously. The question here is more about whether the market is willing to bear any viable price at all.
    • by Shotgun ( 30919 ) on Wednesday February 27, 2002 @10:28AM (#3077612)
      I think people used that arguement when cable TV was in its infancy.

      Ummm..No. The draw for cable TV in its infancy was watching movies without commercials (HBO), and get more than the 3 broadcast networks (NBC, ABC, CBS). Cable TV offered value above and beyond broadcast TV that I lusted for but never attained as a child. (Now that I'm grown, I don't sit still long enough to watch TV 8*)

      • So let's see the website operators, portals, etc., start coming up with services offer value above and beyond the free Internet, just like HBO, MTV, and other pioneering cable channels.
        • The problem with the analogy to cable was that there really was never any competition between providers in the cable tv space. People were presented with the option to either get cable or not.

          The internet is much more granular. If websites start coming up with a "value add" subscription service, people will be forced to choose which subscription services to subscribe to. The problem here is that people hate being nickeled and dimed. If there was an option where people could pay a blanket subscription fee and have access to a whole family of website's "value add" sections, they might choose it. But for an individual website to start charging, is going to be a difficult proposition.

          Unfortunately, there are already content providers doing this type of umbrella service. So anyone who tries to setup this kind of website network will have to compete with the AOL's and MSN's of the world...not exactly lightweight competitors.
      • >> I think people used that arguement when cable TV was in its infancy.

        > Ummm..No. The draw for cable TV in its infancy was watching movies without commercials (HBO), and get more than the 3 broadcast networks (NBC, ABC, CBS). Cable TV offered value above and beyond broadcast TV that I lusted for but never attained as a child. (Now that I'm grown, I don't sit still long enough to watch TV 8*)

        And note that Pay TV was never given away (except as part of a clearly marked promotionals). That's Piro's main point: giving it away to build up an audience doesn't work because you get massive backlash when you try to introduce mandatory payment, expecially if you didn't give people signing up for free any warning that they might have to pay to keep getting it later on.

        Chris Mattern
      • I think people used that arguement when cable TV was in its infancy.

        Ummm..No. The draw for cable TV in its infancy was watching movies without commercials (HBO), and get more than the 3 broadcast networks (NBC, ABC, CBS).

        Considering that cable's been around longer than HBO and such, I don't think that was the motivation behind setting up the first cable systems. I thought it was more about being able to supply a better signal than you would be able to get yourself...the cable company would set up several antennas in a central location, each aimed at a different transmitting tower, and put the received signals out on its own network. It saved you the fuss of making sure your antenna was pointed in the right direction and could sometimes snag extra channels that you couldn't reliably pull in on your own. (The "CA" in "CATV" means "community antenna," not "cable.") It also made subscription-based TV possible, but that didn't happen until later.

      • Offer people a good product, at the price the market is willing to bear, and they will buy it.

      Unless there's an equally slick and well packaged alternative available for free exactly one click away. Been on the 'net recently? It simply doesn't map well to any other model or analogy: there's a very low cost of entry for suppliers, no expectation of payment by consumers, and it's a transparent market, so you can't obfuscate your charges like long distance phone companies do. ;-)

      The only analogy that springs to mind is a huge and ongoing flea market, in one massive field, with free admission for everyone. Unless you are the only seller with shinola, and everyone else is selling shit, you can't charge, because your customers will just wander off. Hell, even if you are the only one selling genuine shinola, there's so many other stalls giving away "shinola-like" products that your customers might just wander off and never find their way back.

      What's my solution? Give up trying to make money on the 'net, stupid. But hell, as long as greedy and ignorant venture capitalists are prepared to throw good money after bad in wonderful follies like Slashdot, I'm happy to go to their stall. When it bows to the inevitable and shuts up shop (or starts charging, which is effectively the same), there will still be plenty of other equally daft vendors opening up free stalls. And if there isn't, well, I was never paying anything, so I haven't lost anything, other than my investment in whoring karma.

      People who say that we should expect to pay to support sites like Slashdot are rather missing the point. The whole model of commercial sites is doomed, unless they're genuine retaillers like Amazon. High quality non-retail sites are simply fuckedcompanies from the get-go, and the sooner we all admit that (quietely), the sooner we can get back to lapping up the benefits of spending money from rich, greedy, ignorant venture capitalists, and enjoying the lovely short lived ride. It's going to be over soon, and you and I (if we're being honest) just aren't going to pay for another go on it.

  • by yndrd ( 529288 ) on Wednesday February 27, 2002 @09:42AM (#3077361) Homepage
    Interesting commentary in the rant about the concept of people not wanting to suddenly pay for something historically free. I wonder what will happen once the current generation of users accustomed to free content is replaced by a newer one more accustomed to fees? Will there be a more lucrative dot-com explosion then?

    People will balk initially at paying for content, but I think they'll gradually get used to it. I remember being pissed that I'm paying for cable AND for the commercials they're sending me, but now I've just come to accept it.

    Mind you, I think this is a lousy thing to happen, but I can't think of a way to thwart it. Our only hope are the sites spewing out free content to contrast with the ones providing it for cost. As long as these places go on, it will be hard to corner people into paying.
    • The difference is that the barrier of entry for web content is MUCH lower than for providing cable TV.
    • Agreed. I came up short once when somebody asked my what my Telco budget was. Not my Office budget, my personal telco budget.

      I stopped counting when it crested $200 a month. (Analog line, ISDN, Cellphone, Longdistance at the time)

      How many things do we pay for that we'd be hard pressed to give up if finances required it? would you give up your Tivo? Your Cable?

      Your Slashdot?

    • by hendridm ( 302246 ) on Wednesday February 27, 2002 @10:40AM (#3077669) Homepage
      I think many of us would be willing to pay a certain amount for services we perceive as useful. However, I doubt the average user can afford to pay, say, $6 per month [salon.com] to each site they use.

      I mean, I visit 4 sites regularly (daily basis) and probably around 5 sites once a week, and countless others whenever necessary. Using the Salon model, I would be paying $24 per month to access my favorite 4 sites. What about the other sites I visit? Do I need to pay full price just to access them once in awhile. Granted, their information is useful to me, but not $6/month useful. Now, I relize they all wouldn't charge $6, but I was just using that as an example of how the monthly cost for a few web sites can add up. I would imagine most of the big sites would charge around $3-$10 per month.

      That brings us to the problem - many of the sites I visit (Salon, Britannica, etc.) want you to pay a flat monthly rate for premium access. I would be more likely to pay on my favorite sites you could have the option of paying-per-use.
      • Even Salon has no business charging $6. _$6_? When someone can pay $10/month for their internet access, they're supposed to pay 60% of that to read a couple articles? And Salon doesn't even need dead trees. The problem is that they need that much from their subscribers because a lot of people won't take time to sign up for $1, maybe.

        There's good news, though. Eventually, all things become more competitive. Once many sites are paid sites, you'll begin to see content aggregation solutions. You'll get Salon along with a hundred other sites for $10. You'll see a couple you love, a few you regularly pop into, and you'll then pay. The privacy concerns are going to be horrid, however. How do you centrally authenticate those page views without centrally tracking the user?
      • However, I doubt the average user can afford to pay, say, $6 per month [salon.com] to each site they use.

        It's cheaper if you go for the longer subscriptions. It's $30 for a year($2.50/mo). I paid $50 for two years($2.08/mo) though I'm not sure if they offer that anymore.

        $50 is what I'd spend on a video game or going out to bars during the weekend. I think it's worth it.
    • The poster above this one wrote, Offer people a good product, at the price the market is willing to bear, and they will buy it.

      And this is very true. There are services on the 'net that for which I hapilly pay: PayMyBills.com, for one, and they aren't exactly cheap ($10.95/month for 30 transactions, $0.50/transaction after that -- I think it's $1 or $2 more now, but my rate is grandfathered, and there are other plans available).

      What do I get for this $11? They provide me with a P.O. Box, scan my paper bills, email me notifications, allow me to pay online (via EFT or their cutting of a cheque from bank accounts to which I've given them access). They can handle on-line "smart bills", too, but this requires that they have access to your other on-line accounts. Having access to (some of) my bank accounts is enough -- all they could do is steal a months worth of expense $$$, but not screw up my other on-line service settings (I registered how many domains?!). Oh yeah, they can be instructed to pay certain bills regularly, or on-demand up to a certain amount. In short, they do a lot for that $11. While I'm not 100% satisified with their service, I'm satisfied enough to keep using it. Beats having to keep all those paper bill records, too (which was my primary reason for subscribing, actually).

      Compare this to other fee-based on-line services. A lot of them try to sell information, or entertainment, on a monthly-fee basis. The kind of information offered usually isn't worth the price, and, as for purchasing entertainment, I prefer a pay as you go model -- I must have spent $5000 on-line in 2001, mostly for electronic equipment, and the odd book (note: bn.com benefits from my boycott of Amazon.com due to their 1-click patent heavy-handedness)

      Now, PayMyBills was rather clever: they started charging me $3.95, then $5.95, then $6.95, and finally $10.95 a month. I suppose some would be irritated by this practice, and to some degree I was, but I'd say the service was worth $10 to $12 a month to me, so I stayed with them, and this latest price has been stable for a while. But, the important thing was that they weren't completely free to begin with (except for a trial period), so right off the bat, they got customers who were willing to pay. How much might be unknown, but it's the step from $0 to $(some small X) that's the biggest one in getting rid of free loaders. I'm sure that if they raise their prices too much, people will go back to paper statements, return envelopes, and stamps. The banks are starting to offer competition, but they generally don't want to deal with scanning paper bills.

      An area for growth here is magazine subscriptions. You know, I get EDN (well, that doesn't count, 'cause it's free for me), and Circuit Cellar Ink on paper. Sometimes one or two articles will be interesting. I usually toss the magazine after a week -- I used to archive "important" ones, but they just took up too much room. It would be nice if I could (a) see a synopsis of all the articles, (b) pay for just the ones I want to read, (and c) get a digital copy, perhaps a synopsis of all the articles I read on an end-of-year CD (for an extra fee). That's something for which I'd probably be willing to pay $10 a year plus $0.25 to $0.50 per complete article: basically half the price of a paper subscription for access, and the other half if I read all the articles.

    • Ok, Lemme be the first to toss this out: Slashdot has been whispering about subscription service coming up where you can pay a nonminal fee to get ad free content. Neat? I don't think so, not the bit about paying, but about losing the cool ads. I can't speak for everyone, but I actually like those ThinkGeek ads and have put together a tidy list of things I'll buy once I have my taxes paid off.

      (I *really* want that THX sound system for a PC)

      I'd be willing to kick in a few bucks to prop up Slashdot, but as long as they don't have those horrible X10 pr0n cam or casino pop-under ads, I'm pretty cool with them, all I ask is don't make them gaudy, i.e. flashing, I keep a few extra windows open on the desktop just to drop over those, ads like that could be giving away gold by the pound and I wouldn't notice, because my first reflex to anything flashing is to bury it.

      • ackthpt writes:

        Slashdot has been whispering about subscription service coming up where you can pay a nonminal fee to get ad free content. Neat? I don't think so, not the bit about paying, but about losing the cool ads. I can't speak for everyone, but I actually like those ThinkGeek ads and have put together a tidy list of things I'll buy once I have my taxes paid off.

        A suggestion, Slashdot used to have a page which would show all the current banner ads and links to where they go. If they return that page then you would be able to pay for the extra speed of an ad-free site, but still have access to the information in the ads. Premium service would mean you could see the ads on your terms rather than ODSN's.

        I found that page to be quite useful at times. For example, I wanted a copy of Penguin Computing's banner ad featuring a giant Tux strolling through Redmond, but didn't want to wonder when the banner would appear on my page.
    • People will balk initially at paying for content, but I think they'll gradually get used to it. I remember being pissed that I'm paying for cable AND for the commercials they're sending me, but now I've just come to accept it.

      I don't know about this. Some sites (Megatokyo [megatokyo.com], MacHall [machall.com], Salon [salon.com], and RPG World [rpgworldcomic.com]) I would pay for. Not $6/mo each, mind you, but they do provide quality content, and they are sites that (with the exception of Salon, whose good articles are all available to paid subscribers only) I visit regularly and would like to support, even if only in principle. This, however, presumes that I have money, which I don't, otherwise I would donate or buy 'fanboy merch'.

      The thing is, most people are greedy, and, as Piro said, seem to think that once something is free, it's their God Given Right to keep getting it for free. Some people will pay more for added value (say, if I, as a subscriber, could buy limited-edition Megatokyo or MacHall prints, get fanboy swag at a discount, or get to buy/read stuff ahead of time), but very few people will pay for Salon's service after getting it all for free, even if it -is- worth it, because it once was free. Nevermind that circumstances have changed, and ad revenue has declined, and nevermind that the service might actually be worth it (I will pay Salon $10/mo before I give Blue Mountain a penny).

      Personally, I think more websites should support things like paypal and so on. Oddly, most (comic) sites are -not- doing this, even shifting -away- from this, preferring to rely on revenues from merch sales and so on. Me, I'd rather throw $2 at them via paypal instead of buying a $15 shirt that they only make $2 profit from anyway. Maybe I'll buy a shirt once, but I'm not going to buy one every month, and I'd like to keep supporting Megatokyo and MacHall indefinitely.

      After all, $2 won't get me anything, but if all the MacHall fans out there threw $2 at Ian, maybe he could finally get a G4 that could play Black and White on a level with Micah's machine. Problem is, most people can't or won't. I mean, $2 is not that much, but a lot of people don't have credit cards, don't have paypal, don't want to set them up, etc. This is likely why Penny Arcade's donation box didn't work too well, or at least, why they discontinued it. If every MT/PA fan donated $2/mo, these guys could have lived like kings, but most people didn't care, were too lazy, or just couldn't (like me).

      Oh well. It'll come around sooner or later. I guess we'll have to wait and see.

      --Dan
  • It seems the article isn't so much about why dot-com's fail, but rather why:
    1) People want everything in life for free
    2) The Author is too cheap to pony up a little bit of dough to send out an animated card.

    Since he runs a site and knows the costs behind running a site, one would think he'd be the first to want to SUPPORT a site by signing up.
    • There's a difference. Blue Mountain is a failed e-business that isn't worth paying for anyway. Megatokyo is an online comic done for free in spare time to entertain people and contribute to the general goodness of the internet as a whole.

      Piro doesn't want people to pay for his comic, he wants people to buy merchandise from his comic. If Blue Mountain was giving cards away for free but offering to let you buy merchandise, then the situation would be the same.

      Me, I'm glad Blue Mountain is going under. Now people will stop sending me these stupid goddamn cards every time they have some holiday that I don't celebrate. Death to all the online Hallmark wannabees (except that one that just has pictures of chocolate).

      --Dan
  • From the rant... (Score:4, Insightful)

    by Vuarnet ( 207505 ) <luis_milan@@@hotmail...com> on Wednesday February 27, 2002 @09:47AM (#3077388) Homepage
    The commodity of the internet isn't money, it's access. It's connections.
    From what I've seen, this is true in almost every business. In the highest levels, money may be something to be considered, but political (or family, or social, or whatever) connections usually have more weight in the decision-making.

    On another note, maybe from a geek's point of view, information wants to be free (as in speech) but your average Internet surfer wants information to be free (as in beer), so they dont have to "waste" their money getting it (as in cheap bastards).

    Great rant, though. Too bad we can't moderate websites to give him a few (+1, Insightful) Karma points.

  • by Toodles ( 60042 ) on Wednesday February 27, 2002 @09:48AM (#3077395) Homepage
    Considering one of the main points Piro is trying to make about the value of respect for a site/company/individual, and how poorly this has been strongarmed into squeezing money out of customers, in particular for an originally free service. Considering the pay services for Slashdot in the works, I find this posting ironic to say the least.

    Megatokyo has my respect, big time. I have at least 6 shirts of there's, two others I gave the girlfriend, and as soon as Im gainfully employed again, Im buying that 'F33r my l33t n3k1d sk1llz' boxer shorts. They've made some money off of me, and they earned it. I just wished it was enough for them to work full time; daily updates to megatokyo would be reason for me to leap out of bed with a smile on my face each and every morning.

    Perhaps Slashdot could do something similiar? Instead of the subscription service, some merchandizing would be better. Instead of the lame /. t shirts on thinkgeek, how about some cool items. An engraved /. (the symbol) metal coffe mug? A swiss army knife with green handle and inlayed /. symbol? People are a lot more willing to give money if they are under the impressions they are gaining something, in particular something physical for their money. SLashdot should take note.

    • green handle. i personally loathe green. the green was the win 95/98 default background color, and it's not nice. i also lived in a house that was completely green. green floors, green walls, green furnature, etc. i think the kids were turning green before we moved out. i for one might be inclined to pay money to /. to let me choose a more interesting color. site branding. everyone else is doing it, it's the kewl thing to do.
    • /. Merchandise? How about the /. Network Load Generator...guaranteed to bring any netowrk to its knees.

      or perhaps the /. Trolling Motor...providing firstpost/troll/flamebait/offtopic posts to your favorite newsgroups.

      virtros

    • merchandizing, merchandizing, merchandizing, where the real money from the site is made.
  • Go Read the article (Score:2, Interesting)

    by Yurian ( 164643 )
    This isn't just a plug like another cynical poster suggested. This really is a good article worth reading. Good artists-point-of-view insight into the whole Napster/access to content debate.Quote:
    Now you don't need to be sponsored and paid for by some big media company to get your work in front of millions of people. The old model was that you had to be able to convince a bunch of people with lots of money that you were worth promoting before you even had a chance to see if people would respond to your work on a grand scale. This lead, for the longest time, to the sad state where only a small number of people decided what the public was going to see. Also, since these same people convinced all of us over the years that ONLY people that they felt were good enough to promote were worthy of entertaining us, that we should not waste our time entertaining ourselves - only paid for entertainment was worthy entertainment. Worked great till the net came along.
  • We're not getting a new comic until tomorrow, I'd have been royally pissed if I couldn't get my MT fix cuz of slashdotting. I get really cranky when I don't get to see my MT. It's definitely one of the best comics out there.
  • Slashdotted (Score:5, Informative)

    by Kefabi ( 178403 ) on Wednesday February 27, 2002 @09:56AM (#3077448) Journal
    I've had to think a lot about stuff like this lately. Running a site like MT is expensive -
    How DO you survive, pay hosting bills, make enough money to support yourself and others who help run the site?

    For giving out for free what I consider the best web comic out there, GETTING SLASHDOTTED IS NOT THE ANSWER.

    Heh, if anyone's been following Piro's rants lately, you know that he switched web hosts, and that he spent many days trimming down the site, all the graphics, trying to get file sizes as small as possible to LOWER his bandwidth costs. I think you guys just blew all his hard work!

    Now, there have been people who have requested that he set up a PayPal account or something so that we readers could donate to the MegaTokyo cost, but Piro won't have any of it. In his rant today, he explains why. He feels that if people PAY for his comic, that people tend to feel like they DESERVE the comic, as if they bought a service, instead of RESPECTING the work that Piro gives out for free. If you want to support MegaTokyo, buy some stuff from the MegaTokyo store. You get cool swag, Piro and Largo get some cash to help run MegaTokyo, and we're all happy!

    -Kefabi

    • He's running this as a hobby not as a business, which is fine but that's a choice. If he wants to add to the greater good of the Internet and gain respect that's fine, but don't tell me you can't make money off of 10 million page views a month, even with bandwidth costs.
      Everyone talks about all the dot-com failures and how it's impossible to make money on the Net. Bullshit. There are plenty of small sites around that make good money and they aren't charging subscription rates. He's entitled to his view of the Internet and how he runs a site, but it's not the only way.
    • Another feasable model that I have seen is what Pete Abrams at sluggy.com [slashdot.org] has started doing. In addition to selling books, prints, posters, &c., he has an "ad free" subscription service. The basic theory is that one sends in 10 bucks and no longer has to deal with banner adds. Basically, there is no fundamental change in the site from the user perspective (other than the lack of banners, and one or two other small perks), and it basically amounts to a donation, but there is something tangible in return. For those that don't want to pay, Sluggy is still free, only there are annoying ads at the top of the page.
    • yeah. I was too moved by the content of his rant to think about the effect of /.'ing him at almost 4 in the morning. :( Besides, it's been years since a story of mine was actually accepted. ;)

      Sorry Piro. Gomen.
  • Value (Score:5, Insightful)

    by Mattygfunk ( 517948 ) on Wednesday February 27, 2002 @10:00AM (#3077467) Homepage
    The paradox here is that once people loose respect for a site, won't they be less willing to pay for it?

    This statement interested me. In my opinion Google is both the most respected search engine and web site on the net (sorry /.). If Google started charging tomorrow, suppose it's $5 a month, would I lose respect for them and would I pay for it?

    The answer is that no I wouldn't loose respect because I respect their product. Yes I would pay for it because their content is valuable to me.

    God forbid this ever happens but it's worth considering. If you are offering value for money you won't loose respect from your users. If your content is worth $0.00 then thats the maximum you can charge.

      • If Google started charging tomorrow, suppose it's $5 a month, would I lose respect for them and would I pay for it? [...] Yes I would pay for it because their content is valuable to me

      I agree that Google is the only service that I would consider paying for, because it's so powerful and so clean.

      Only, after considering it, I wouldn't really, because I could get the functionality (plus adverts that my hosts file filters out anyway) via one of the idiots already licensing their technology and hoping to pay for it through hosting auctions, or selling semi-sentient sock puppets, or whatever.

      To sell a service on the internet you need this:

      • Your service has to have "respect" (mindshare, in weasel terms). Google has genuine respect. Slashdot has, er, mindshare.
      • You have to be selling shinola, not shit.
      • Nobody else can be giving away shit.

      It's those last two that provide the problem. It's not necessary for you to be the only shinola vendor, but neither is that sufficient for you to be able to charge. Given the choice between paying for shinola, or getting free shit, I know which way most of us (be honest) would jump.

      In all honesty, I think that if Google started charging and stopped licensing its technology, making it a pay-for-shinola versus free-shit proposition, I would go back to using the pre-Google Inktome licensees and putting up with the banners. Sad but true.

      Yes, I know that makes me part of the problem, but I honestly believe that the idea of commercial content on the internet was doomed from the get-go, and that we should enjoy the ride while we can, then go on about the Golden Age to our grandkids who'll be sharing ASCII porn over port 80 on their 100GB/s down, 9.6Kb/s up ADSL modems.

  • Free is as free does (Score:5, Interesting)

    by p3bf ( 459005 ) on Wednesday February 27, 2002 @10:05AM (#3077500) Homepage

    Well, here we go. I visit Megatokyo daily, and I both cringed and laughed when I saw a full story here on Slashdot about the rant.

    From what I understand, Piro (et al.) have refused to put a donations button on their site, instead trying to "make it commercially" on their own. At the moment, that takes the form of getting people to buy their art in the form of t-shirts and the like.

    But Piro (et al.), from my understanding, are also gearing up for a printed work; Taking the archival strips and trying to find a publisher.

    While more power to them, it's interesting that they will be charging for what they have given away for free. :)

    Notably, they've reduced the resolution of the archival artwork online. Ostensibly to reduce bandwidth fees. (I do believe that, somewhat, but it also has the effect of rendering the archival images somewhat pixelated and not very printable.) In response, a number of the Megatokyo community members have mirrored the original strips in their original resolution, however that won't help with the new strips coming online.

    While they are trying to be more commercial (by their own insistance), there has been a fair amount of "drama" in some rants and IRC talk from Piro's camp, which at times appears, in my opinion, to be less than professional (which is fine if you're not trying to be a commercial entity).

    Inclusive in this angst is talk about their rising monthly costs. I can only imagine what a good Slashdotting will do for Piro's blood pressure. Plus the influx of new members on the site and message board will surely grind their server to a halt and keep their bandwidth peaked.

    By not accepting donations, (and by modifying his site so it incidentally supports his move toward being a commercial entity) he may be biting the hand that wants to feed him (but can't afford $20 t-shirts). I hope he makes it commercially in the next few days before the bandwidth fees hit him. :)

    I love the art, style and story at Megatokyo. I wish them well, whether they choose to be commercial or not. And yes, I would buy a softcover printed Megatokyo book/anthology.

    • By not accepting donations, (and by modifying his site so it incidentally supports his move toward being a commercial entity) he may be biting the hand that wants to feed him (but can't afford $20 t-shirts).

      It seems fairly common, too, among websites that won't accept donations. They basically say: "I won't accept your $5, because that would be begging. Now, I desperately need money to keep this site up, so please buy this $20 t-shirt so I can get your $5." Oh well. At least it's better than, "Please click on my sponsor's ad even if you don't want their product, so we can get money out of them for nothing."

      Why make people jump through hoops?
    • Someone says

      But Piro (et al.), from my understanding, are also gearing up for a printed work; Taking the archival strips and trying to find a publisher.

      While more power to them, it's interesting that they will be charging for what they have given away for free. :)

      Er, not exactly. Piro will be charging for a tangible (thus value-added) version of what they've been giving away for free. This is exactly like the MP3 vs CD thing -- download the MP3, then buy the CD, and feel like you got a great deal in the end. Piro has it figured out.

  • by eples ( 239989 ) on Wednesday February 27, 2002 @10:08AM (#3077515)
    The Internet should be renamed InformationNet and we can get this all over with quickly.

    The best online ventures are the ones which provide end users access to information they didn't have anymore.

    Slashdot, for example.

    See, it was *built* to provide easy access to information. It's what the Internet is good at.

    The Internet was *not* built to replace the shopping mall - a place which is usually entirely void of any useful information about anything.

    See? It's all very simple.
    • "The best online ventures are the ones which provide end users access to information they didn't have anymore.

      Slashdot, for example."

      WTF are you talking about? Community sites like Slashdot are going down like sinking ships. Where have you been? The only think that is keeping Slashdot up is its huge popularity, and it's parent company, whose *own* future is in question. You call that a "best online venture"? I'm sorry, but EBay and porn is a "best online venture". Not subscription-free community sites.

  • Hmm. (Score:2, Interesting)

    by Anonymous Coward
    Well, let's see. We've had billions of people without a clue telling us why dot coms have failed. We've even had a few industry experts tell us why.

    Now we've got a comic artist telling us why.

    Screw it, I'm going to jump in, too. You know why they failed?

    $1000 chair budgets. That's $1k per employee.

    Heh. :p More seriously, this is nothing more than a shameless plugging. There's no new insight, there's nothing there that hasn't been said already about dot coms.

  • Well, this rant by Piro doesn't surprise me in the least. Besides, it will help condition all slashdot users into believing that its a good thing they're going to start charging for a "premium" version of this site. The weird thing is, I LIKE the banner ads that are here. They pertain to my daily life. I'd rather just do donations to /., and am actually kind of surprised that there isn't a donations link (yes, I see the supporters link, but that's way too many clicks to spend my money) in main navigation.

    Why did a free ecard site decide to go to a pay service when every other site has free ecards? I give Blue Mountain Arts three months to live out the dotcom death thrash. Fucked Company [fuckedcompany.com] anyone?
  • by RembrandtX ( 240864 ) on Wednesday February 27, 2002 @10:27AM (#3077610) Homepage Journal
    Poor Piro,
    The same nervous guy who came to an anime convention and wasn't quite ready to believe the amount of people that showed up to see him.

    He does have some points though.

    I think he is dead on with how people think of 'value for dollar' its the same problem linux sometimes faces. The "Did-you-spit-on-that-or-something?-problem" that you see in 5th grade lunchrooms. [you know .. you offer to give some snack that you *HATE* to a friend and thay are immediatly suspicious.

    And i definatly agree with his take on the whole banner-ad .. pimpin` for ca$h type of site.

    but while i agree .. my soul is torn. I Like fred & rodney's work, I want to see more of it, while I understand they have dead time [as all artists do] I still want to read more. I like the fact that I go to their site, and see .. their stuff .. thats it. But then I look at sites like Penny Arcade .. new stuff all the time .. and for a while there .. they were pimpin` like mad. Would I get my fix of MT more regularly if there were $$ in it for them ? [apparanty not, since piro is the art behind it .. and it would make him feel bad]

    Personally .. I prefer the swag method. Buy me a teddybear to support our site. [I personally have 2 megatokyo mugs on my desk here at work .. and the girl has a handful of t's to sleep in] They get a cut from caffe press, and the office/school publicity of having their image shown about - the user gets something that is hopefully not 2-sizes too small for them. [and definatly doent have darth vader on it]

    Its already been mentioneed that /. might want to follow this model .. I would pay good $$ for a zippo with /. etched on it. [It goes without saying my coffee table would be sitting in style with a hardcover compelation of MT on it too.]

    Question: "Your website is being /.'ed .. pushing your bandwith costs into the sky .. what do you do ? *WHAT* do you do ?"
    Answer : "I think of snow."

  • Respect as currency (Score:3, Informative)

    by Kushana ( 206115 ) on Wednesday February 27, 2002 @10:27AM (#3077611)
    The idea of respect as currency in a post-shortage world was "discussed" (if not first introduced) in James P. Hogan's "Voyage from Yesteryear." In it he creates a space colony whose computers can create any material good imaginable. The result is that the colony's society has grown to treat a human's worth as how well they can perform the task they choose. A follow-up colony ship arrives at the colony and wacky hijinks ensue. Well, maybe just cultural turmoil.

    Anyway, Piro seems to be making the case that the Web is the beginnings of this type of society, where ordinary people put things up for virtual mod points. After all, wouldn't each of us like to meet their Web heros? Linus? CmdrTaco? Scott Kurtz?
  • .coms DO work - there's an awful lot of them out there, and there's a lot of money being made.


    What the author doesn't understand is "supply and demand" still rules economics. There was a huge burst of startups trying to find the money, and most simply didn't provide what people were willing to pay for...or worse, many startups thought they could make a fortune giving things away for free. Like any new technology/industry, a lot of people jump in at first, and those companies not economically viable get washed out - that doesn't mean that the whole industry is a loss.


    There are plenty of .coms out there. Millions of customers like me do most of our purchases on-line. Those who provide what we want at fair & reasonable prices will survive; those that don't, won't. Paying to send an animated greeting card may very well be one of the "won't" as even the author is unwilling to pay real cash for what others provide for free.


    This is a new industry. .com business is here to stay - that does not mean that all .com companies will survive. Supply and demand rules; those who don't follow it will fail.

  • I run a popular but financially struggling website (Vegan.com). Like most web publishers, I need to find ways to generate enough money to pay my hosting bills and get some compensation for all the work that goes into creating a quality site.

    Piro makes a pretty good point that it's not money that drives the net, it's respect. But his article mainly looks at the dynamic of decisions made by webmasters.

    I think it's more interesting to consider things from the perspective of the user.

    The trouble with web publishing is that it encourages a leach mentality amongst readers. As a site owner, I wish my thousands of readers would use my Amazon.com links so that Vegan.com would have some decent revenue. But hardly anyone does, and Vegan.com makes practically no money. There's a part of me that feels disgusted that most people who visit my site every day do nothing to give back, although many undoubtedly shop on Amazon.

    But when I surf the web, which I do for at least two hours a day, I notice my own leach tendencies.

    I visit Slashdot every day, but I never order a thing from ThinkGeek. I used to read Salon.com every day, but there's no way I'm going to pony up $30 a year for their premium content. I used to send the occasional Blue Mountain card. But when they started imposing a service charge, I switched to Yahoo's greeting cards.

    No matter how many sites start trying to charge, I know I'm always going to be able to surf the web and find interesting free content. So I don't pay for anything. Salon.com starts charging? No problem, I'll go to Slate.com. Although I'd prefer to read Salon's articles, there are plenty of other articles I can read for free that will provide nearly equal enjoyment.

    This brings up what I see as the main problem confronting web publishers and their audience. Until the web came along, there were basically two ways to get goods and services in the real world. You could be an honest person and purchase them, or you could be a thief and steal them.

    With the web, there's now a middle option: you can be a leach, taking whatever you are given for free, and offering nothing in return. When a site you like starts charging, you abandon it and move on to some other free site. It's totally legal. But is it moral?

    For some reason, the way the web works encourages leach-like behavior. I've seen both sides of this. I've seen it in my own leach-like decisions in surfing the web, and I've seen it in the decisions made by the thousands of loyal but non-contributing visitors to my site.

    • Just because your site isn't making enough money doesn't mean people are merely leeches or thieves, and it's insulting to paint them as such (even vegan.com visitors).

      Supply and demand rules. If there's a supply of free stuff, people aren't likely to pay for the same thing - that's not leeching, that just makes economic sense. Like broadcast TV, some sites find that giving away products provides an avenue for advertising (a very profitable activity when done right). There are a lot of ways of extracting money from pockets, and much of that involves knowing who your clients/customers REALLY are. You may not buy from ThinkGeek, but enough do to support SlashDot through advertising.

      If people aren't giving you enough money to support your site, then that's YOUR problem for not balancing the supply-and-demand equation profitably - it does NOT mean your customers are the dregs of society.
      • I thought clients sent in payments in exchange for services rendered. Funny, I don't remember receiving any payments.

        >Just because your site isn't making enough money doesn't mean people are merely leeches or thieves, and
        >it's insulting to paint them as such (even vegan.com visitors).

        I feel as if you've put words in my mouth here. I'm grateful for the thousands of visitors my site gets. But that doesn't mean that they are offering any financial support to the website.

        What I tried to do in my last post is to show a dynamic that I think is at work, by which people who regularly visit a website seldom choose to provide financial support. And to do this, I pointed the finger not at my readers, but at my own web surfing habits.

        >There are a lot of ways of extracting money from pockets,
        >and much of that involves knowing who your clients/customers REALLY are.
        >You may not buy from ThinkGeek,
        >but enough do to support SlashDot through advertising.

        Would you care to back that up with some documentation? Virtually every content oriented site struggles. And I bet Slashdot is not paying its bills thanks to ThinkGeek. I think their funding sources during the dotcom craze have everything to do with what's keeping the site around today. I bet Slashdot's making next to no profit--if it's making any profit at all.

        You're undoubtedly right that I could make more money with my website by paying closer attention to my customers. But I pay very close attention already, and thankfully have other business opportunities that have nothing to do with the web. Yes, you can make money off the web as a content provider, but it's incredibly difficult compared to just about any other business opportunity out there in the world. I tried to explain why this is true, but you seemed to take what I had to say as an attack on my readers.

    • This brings up what I see as the main problem confronting web publishers and their audience

      The real nice thing about the web is that everyone is a publisher and everyone is the audience. So the old model of the audience paying publishers doesn't work anymore.

      Imagine that your hosting costs were reduced to zero. Would you still put up your web site? Would you if there were thousands of people who wanted to see it?

    • Regarding the Amazon thing:

      there are *many* sites that do the Amazon program, and it's way too cumbersome to get it to work, after all, 99% of the time I'm accessing one of these sites, I'm not accessing it because I want to buy something from Amazon!

      When I do want to buy something, I usually don't go through these sites, I go to Amazon directly, and do searches there and do my ordering.

      More than once, I went to Amazon via a site-sponsored link, only to 'lose' the sponsoring after a few searches and various browsing.

      It would be much easier if Amazon offered the opportunity to create a 'list' of sites you want to support (i.e., assume your sponsored links go to a page on Amazon that adds your site to my list) and that it would give you the opportunity to add, say, 50 cents per-site (choosing which ones of course) to your order during the checkout process.

      In this way Amazon would deal with the micropayment crap, you would get your money, and I wouldn't have to remember which site has a sponsored link whenever I want to order something. Plus giving you 50c out of a $50 order is absolutely not a big deal, but if a lot of people did it (and if you make it easy enough, they *will*) it would be pretty good money for you.

      Since you are a member of the Amazon referrals (and a fellow vegan ;) why don't you float this idea to Amazon and see what happens?
  • that during the .com boom, everyone raves "why .com works" and now everyone writes about "why .com doesn't work"?
  • I've read a few posts regarding banner ads and slahdot or other sites.... I've finally come to a revelation about banner ads.... of course I came to this conclusion a while ago, but have yet to say anything here:

    Banner ads, the idea behind them, does work. The problem is that people have come to the decision that they will only pay for banner ads that are quantifiable... I.E. Click Throughs.

    This is not, and should not be the case. Banner ads should be sold on the number or visits on a site, and the popularity of the site.
    Just like advertisers want to be seen during superbowl.... Why? Many, many eyeballs. So their willing to pay a hefty price!

    I don't see a comercial during the superbowl and go... "Whoa... I gotta have that!" and then leave to go to the store.... NO! I finish watching the superbowl and then at a later date, with the proverbial commercial seed planted in my brain, I go and purchase that product.

    The same goes for banner ads. It's a form of advertisement. I'm not going to drop everything to go and head over to that site..... I'm here at slashdot or where-ever for a reason. I'll do what I have to, and then later.... When I'm not too busy.... I'll head over to thinkgeek and buy that hat.

    Yes I purchased many a thing at ThinkGeek and elsewhere, because of banner-ads (I would not have known about them otherwise) but I have NEVER purchased anything by means of a click-through.

    So in quantifiable means, the banner ad didn't work. There was a click through but no purchase.
    Ah, but I did purchase. Just at a later date.

    I can't stress this fact enough.... We do not drop everything when we see a tv ad and head to the store... we do it later. Does this mean because we didn't drop anything that TV ads are failing?

    Time for a philosophy change.

  • I've been providing a service for two or three years now. I always had it be completely free (actually the web hosting costs me money). Once I started it out as being free, I didn't feel like I could have ever charged for it. At the height of the dot com silliness, perhaps I could have been making a thousand dollars a month or so for it, but it never would have felt right to me. Once my site stopped becoming my hobby and started becoming my job, the fun would leech out of it.
  • It's not so much that the free sites are turning into pay sites... it's that the payments are MUCH TOO HIGH. All these guys want $11.95 a year, $4.95 a month, whatever... and many of them are for services I use only rarely.

    I'd gladly pay a nickel to end an e-card. But $11.95 a year when I only send half a dozen of them? I can buy real greeting cards cheaper than that.

    A few years ago, everybody was talking about micropayment schemes. And Paypal's initial blurb talked about how you could use Paypal to send $0.01 to each of twenty friends... they'd charge your credit card $5.00 for the first payment then draw down your $5 balance a penny at a time. These days, Paypal is doing everything possible to DISCOURAGE you from using credit cards as a payment source...
    • Micropayments are a shit idea. Do you know how much it costs to conduct a credit card transaction? It certainly isn't free. With that you can't have a micropayment system charging a credit line for a nickel or dime (pun intended) every time you viewed a web page. With something like Paypal where your account is charge whatever micropayment amount and then you pay in a single credit line transaction later the cost of the micropayment transaction has to be far less than the amount transacted. Say for every transaction you're charged a penny service fee. If all of your transactions are a penny thats a 100% surcharge! paypal's example situation is inherently flawed because they don't take into account the cost of the one penny transaction you're sending to your friends. The penny per view revenue scheme just isn't going to work. Small transactions cost the most. That is where micropayments went, no one has figured out how to do them with a transaction overhead that is smaller than the amount of the transaction. A penny per transaction on a penny transaction just isn't going to fly.
  • Not all .coms got it wrong, just those like blue mtn that pulled a bait and switch. I agree at some level with the respect issue. I think you can integrate that with the making money model to create a successful .com, please indulge me for a few lines :)

    1. Start web site with good, useful, intelligent/funny/something! content.

    2. Get a customer base who likes it

    3. Work up some sort of *Premium content*, that's the big thing. So perhaps it's exhaustive archives, with extras, and more insight, as well as other resources.

    4. Provide this premium service at a price.

    You still provide the basic functionality of the site that has built you a user base w/ respect. But now, those who truly respect you and value your content may buy your premium content if they want more.

    IF you are going to go the Blue mtn. route you at least need to make it obvious from the get go that the service is only free for a certain time. You can never cut back on what you offer, that's just basic knowledge, but you can charge for an improved version.

    -Adam
  • The dot-com thing went bust for the same reason pyramid schemes go bust, and for the same reason the stock market can't (in the long run) go up faster than the economy grows. Wealth isn't a bunch of bits in your bank's Oracle database. Wealth is real stuff. That might include services, but ultimately, you can't have more services than you have people to provide the services.

    Dot-com is the future of all commerce, but you can't have more commerce than you have stuff, and it was quite clear to any rational human that the top dozen dot-coms would have needed to do almost ALL of the commerce in the world to justify their stock prices. Some day this will happen, unless we stop it -- consider how much of commerce is already completely in the hands of Wal-mart and Manpower -- but it couldn't happen overnight.

    As to charging for what once was free, as everybody has known for at least 5 years, the real key is to have a workable system for charging very small amounts of money. The problem is not that people won't pay money to send ecards; the problem is that people won't pay more than 25 cents to send an ecard, and we don't have any system in place that doesn't cost more than that just to process a payment! It doesn't actually seem insurmountable to me, but I'm just a lowly developer.
  • by jafac ( 1449 ) on Wednesday February 27, 2002 @11:54AM (#3078171) Homepage
    The only thing worse than Jon Katz is Piro.

    Anyway - there was an internet boom BECAUSE of the stock market. The new technology that became available to a new market played a big part, but it all happened because of the stock market. Investors saw an opportunity to get in on the ground floor (ie. buy low) of a company in a new marketplace that had a potential of becoming "the next Microsoft" - in other words, a monopoly. Everyone thought Netscape was going to be the next Microsoft. Then Yahoo. Then Ebay. Then Amazon. Then Macromedia. Then Real. The money flowed into these companies, and they bought equipment, and people, and that sparked investment in the more sensible computer and software companies. The business model was: get dominant marketshare by dumping the product for free, then when the competition was murdered, charge em up the nose for the service because you're the only game in town. In the interim, revenue was stopgapped by ads. But in the long run, when it appeared that the only "next Microsoft" that would appear was. . . Microsoft, I think it became pretty obvious to a lot of people that internet stocks were overinflated.
    As the internet content became more saturated with ads, and more vertical to corporate interests, and more eyeballs got funnelled to less and less sources - it all became less and less compelling for the vast majority of net newcomers. You and I, the DSL subscribers, the tech workers, the geeks, didn't really notice much of a change, other than - our nongeek brother in law who used to email us every day, now has discontinued his AOL account because he can't download free music on Napster anymore, or all the cool little independent sites had shut down because they couldn't afford to stay up anymore. This was all secondary to the cessation of flow of investment dollars as all the loans based on them started coming due. THAT is why the dotcom boom went bust. The content issue was merely a side effect.
  • by gordguide ( 307383 ) on Wednesday February 27, 2002 @12:56PM (#3078607)
    I liked the read, it was interesting and thought provoking. Right or wrong (to me) isn't important, because now we have a discussion to help us sort that out.

    What happened here? He wrote a piece, it got somebody's attention, and now he's getting traffic. Some of us are going to bookmark his link and go back for his content, not his comments.

    Attention is the currency of the web; it is limited (we have only a certain amount of time to surf in a day) which makes it valuable (scarcity of goods).

    What you do with that "currency" is your business (literally). Find a real-world product to generate revenue is one way (sell me a t-shirt, etc). That's pure advertising, plain and simple.

    Some .com-ers think the content itself is the product, and for a few it is. But what if the content is not the product, but the message? Ask me to pay for a message, and I won't. Give me a product that I value, and I might. But use the content to encourage me to buy a tangible good, and there's one revenue stream (and I'm sure there are others).

    It's no different from TV, newpaper, magazine or (the best of all) word of mouth and cachet. You've got my attention, what do you do with it? Ask me to click on a banner? Dumb idea. I hate ads, advertising, and the weasel language that goes with it. It's not exactly SPAM, but it uses the same business model.

    He uses the greeting card (Blue Mountain) example in his rant. Blue Mountain's mistake is thinking their product is virtual greeting cards. It's not. (If someone can't make up a greeting card and eMail it, well they probably don't belong at a desktop). The product is more akin to the FTD flower business. What could BM have done, what real tangible good or service could they have offered me? That's for them to figure out, but charging for online cards simply eliminates a bunch of captive eyes that they actually already had (and paid for). If we agree that the currency of the web is attention, their stock just went down.

    This business isn't easy; free enterprise isn't supposed to be. Losers always outweigh winners, and that won't change, whether you're a dot-com or Burma Shave. Everybody's got to figure it out for themselves, and the hardest part (apparently) is:
    a) knowing who your customers are,
    b) what you're offering them, and
    c) whether they can get it elsewhere.

    There seem to be a lot of dot-coms who somehow have convinced themselves the answer to c) is "no".There very well may be cases where it's true, but not nearly as often as some web firms seem to think it is. And if you're wrong on that, it's pretty much a given you won't get a) and b) right either.
  • As an owner of a dot com business [spinweb.net] (or rather a .net if you will) I would like to state for the record that the news of my death has been greatly exaggerated.
  • Eric S. Raymond (http://www.tuxedo.org), the guy the media was getting quotes from back in the hype days has been telling a well developed version of this for some time. For example, he presented it at a talk to the MITRE Corperation in Feb of 1999. It can also be found in his writings:

    http://www.tuxedo.org/~esr/writings/homesteading /h omesteading/
  • when i say megatokyo, i think of Bubblegum Crisis, the original 80's cyberpunk anime series with babes in hardsuits.

    I dont think of the web comic.

    (even tho my mega-tokyo.com has nothing much to do with BGC....)
  • I really like MegaTokyo and check every day or so to see if a new one is out.. but honestly.. If they want to make any money off that site, they need to go the route of penny arcade. Penny Arcade makes tons of money through their donation systems and I'm sure they do ok on the books and shirts as well. You can only make so much money off cafepress stores, and megatokyo is missing out on a lot of potention revenue but using cafepress and not using an independant manufacturer. Sure they have lots of shirts and stuff for sale, but after you subtract what cafepress takes for overhead, they are only making a couple bucks. They would be better off using an amazon or paypal type donation system and just asking for 50 cents or a buck occaisionally..

    Also, Piro et al need to learn one thing.. bitching and ranting about how your online comic doesn't make you enough money right after you take a couple weeks off with out doing any comics worth reading is just dumb. If you want to make money off something, put enough effort into that people will pay for it. If you are doing something out of the goodness of your heart, don't expect people to pay for it. Of course the people that send you money and buy your overpriced cafepress merchandise are going to complain if you don't post a good comic in a couple weeks..
  • I totally agree with what Piro is trying to get across. If hotmail started charging for its most basic of services, I'd stop using hotmail. Duh, people use free stuff because its free. I've totally stopped using Activestate's [activestate.com] Komodo for exactly this reason. Maybe I just can't figure out how to get a free license, but it looks like you can't get one anymore. That sucks. I liked to use Komodo to make my stupid little perl scripts. Now I'm stuck using Notepad or the command prompt's edit. I like Komodo, and I'm sure its vastly improved now, but I'll be damned if I am gonna shell out money for something I used to get for free. This is also primarily the same reason I won't visit hookers after I lose my looks. ;-)

    I think Penny Arcade [pennyarcade.com] has a good balance of respect and profitability. Even so, they probably only generate a couple thousand dollars a month. That probably barely covers hosting costs. The sites maintainers obviously care about the site. When a site sells out, IMHO, their content seems to lose quality. It becomes about money, and is no longer about sharing. Sharing is what the internet is about, whether it be exchanging information, providing a service, whatever. It is indeed about contributing to the whole of the internet. Hell, if I could use Komodo freely (as in beer) to develop some wicked perl module, I'd be more than happy to GPL the module and post it on CPAN. But, alas, that won't happen, because I'd be too embarassed to post my notepad-edited script.
  • The fact of the matter, is that we are becomming an information-centric society. That's a good thing in moderation, but bad in the levels of the .Com craze, and nearly as bad today.

    What is information really worth? On it's own it really isn't worth anything, and that's what people are forgetting. Information is only valuable in it's abilty to help accomplish something. If the quick exchange of information can help you build cruise ships cheaper and quicker, the information has a vaule. However, as we increasingly have that work done by mexicans and taiwanese, the information we deal in looses all value.

    Our high-tech economy is being held up by our low-tech economy, and as that low-tech disappears, everything becomes worthless. I worry that people have forgotten that.

    Companies like microsoft, oracle, et al. that deal only in software will be worth nill when the high-tech economy is no longer a benefit to the disappearing manufacturing industry. And just think, when was the last time you bought a dvd player that was made in America?

    IT's days are numbered. We're so high-tech that we are putting all our eggs in the 'information' basket that's held up by industry. As industry deteroriates, we will all suddenly find that Mexico has become the richest country through it's manufacturing, and your IT certifications have become funny money.

Every young man should have a hobby: learning how to handle money is the best one. -- Jack Hurley

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