Will Content Ever be Profitable? - According to the...
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According to the first, sites will be financed through advertising - and so will search engines and other applications accessed by users.
Certain ASPs (Application Service Providers which rent out access to application software which resides on their servers) are considering this model.
The recent collapse in online advertising rates and click-through rates raised serious doubts regarding the validity and viability of this model. Marketing gurus, such as Seth Godin went as far as declaring "interruption marketing" (=ads and banners) dead.
The second approach is simpler and allows for the existence of non-commercial content.
It proposes to collect negligible sums (cents or fractions of cents) from every user for every visit ("micro-payments"). These accumulated cents will enable the site-owners to update and to maintain them and encourage entrepreneurs to develop new content and invest in it. Certain content aggregators (especially of digital textbooks) have adopted this model (Questia, Fathom).
The adherents of the first school point to the 5 million USD invested in advertising during 1995 and to the 60 million or so invested during 1996.
Its opponents point exactly at the same numbers: ridiculously small when contrasted with more conventional advertising modes. The potential of advertising on the net is limited to 1.5 billion USD annually in 1998, thundered the pessimists. The actual figure was double the prediction but still woefully small and inadequate to support the internet's content development. Compare these figures to the sale of Internet software (4 billion), Internet hardware (3 billion), Internet access provision (4.2 billion in 1995 alone!).
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