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An Internet Content Inflection Point? Abundant Blowback in Favor of Scarcity Economics
Submitted by Scott Cleland on Tue, 2009-04-07 19:17
Anyone watching the Internet content marketplace closely is witnessing the formation of a critical mass of high-powered opposition to the Internet Free Culture ethos that no one should be required to ask for permission or payment to use content on the Internet.
- Something big is afoot.
- Powerful forces in the traditional scarcity economy, i.e. Big Media, are no longer rolling over anymore, but are finally pushing back against the abundance ecommony ethos that asserts that content on the Internet is common property that anyone should be able to use as they wish without permission or payment.
The possible tipping point here is the newspaper industry's belated realization that giving away their content for free online, in return for traffic, has been an unmitigated disaster because it is not an economic or sustainable business model.
- The Chairman of the AP announced that the AP, newspapers, and local broadcasters, as the "source of most of the news content being created in the world today" are "mad as hell" about others not paying "fully and fairly" for their content, and that they "are not going to take it anymore."
- This is on top of serious discussions between the major players in the video content industry about how to ensure that online video does not suffer the business fate of music or newspapers.
What is notable here is that the debate about Internet economics/uneconomics and business models is reaching critical mass like it never has before.
- While speaking as the keynote at the Newspaper Association's annual gathering, Google CEO Eric Schmidt said the fundamental point for newspapers to understand is that Internet distribution does not work if it is built on the economics of scarcity, but only works with ubiquity and abundance economics.
- What he was really saying is that Google's advertising business model excels at ubiquity and abundance economics because Google uniquely enjoys the largest audience in the world -- upwards of 750 million Internet users. His unspoken implication was that Google is the only and best way to monetize content on the Internet.
In sum, the much-hyped economics of abundance basically represent a cruel mirage content owners have been desperately chasing.
- What is becoming "abundantly" clear, is that forfeiting one's constitutional ownership rights to create economic scarcity, in return for a gateway to reaching an abundant world online audience, is scarcely worth the trouble.