Thursday, 06 January 2011 14:50

Will The Meritocratic, Playing Field Leveling Nature Of The Web Fall Victim To The Net Neutrality Scheme? If So, Many High Traffic Low Margin Sites (Read The Little Guys) May Go Bye-Bye

I received a thought provoking email the other day, and thought it would be good for sparking the debate on the future of the web. Please be aware that this is a reader's opinion, and not necessarily my own, but he definitely seems to have thought his viewpoint thoroughly through. I welcome any and all comment. Portions of the email have been removed to preserve anonymity.

Reggie,

You're well aware of the current models, primarily advertising and direct marketing driven by web publishers such as BusinessInsider, ZeroHedge, SeekingAlpha, etc.  Although these combination publishers/aggregators/bloggers have achieved a certain level of success they don't really have a model, at least as I see it, that will supply them with an ongoing stream of steady high-quality content, such as the research and analysis provided by your blog.

If you consider the understandings of the surplus in content as described by Yochai Benkler in Wealth of Networks, Clay Shirky's Cognitive Surplus or Rachel Botsman's Collaborative Consumption, it seems there is no end in site to free, high quality content.  I believe that the so-called net neutrality regulations are going to change that.  A tiered internet will probably create a situation where casual bloggers will lose visbility as a "pay to play" model emerges.

In this model, creating visitors that come to a site will likely create a financial liability, especially for sites including any video.  Some of the more amateur bloggers find it easier to publish videos that to do actual writing.  I envision these regulations being targeted at that group as free-riders on the bandwidth.  If, say a video blogger is making $500 per month on Google AdSense, then the minute they have to pay $500 to Verizon for their incoming traffic jams, they'll drop from the content supply like a hot potato.

If my theory proves out, then they'll be a dividing of the waters between casual and professional bloggers.  This will (unfortunately in my opinion) create a classic "haves and haves not" model.  Publishers who have passed, say the $500,000 in revenue threshhold will have fewer emerging bloggers to choose from as sources and there will be fewer, if any bloggers that have non-advertising supported sites and the models will be subscription, donation or ad-supported (as most are now).

The key dynamic shift will be in a clearing of the playing field.  Today, you might see the same article referenced with a blog introduction on HuffingtonPost, InfoWars, DailyPaul, BusinessInsider, ZeroHedge, MaxKeiser, etc.  I don't see that model continuing as I believe bloggers will become aligned in exclusive arrangements with publishers, where publishers (say BusinessInsider.com) will be the ones primarily responsible for picking up the bandwidth tab.

When you examine copyright law, digital rights management within a framework of the Creative Commons license and the writing of Duke University Professor James Boyle, you see the model that got us to where we are today.... "share and share alike" albeit loosely administered.  Going forward not only are written content and video content streams going to be important, but also photographs, illustrations and even cartoons will be crucial to maintaining readership.  You'll notice that sites such as ZeroHedge.com get around these digital rights issues by simply not offering graphics.  This approach may work fine for intellectual or scientific audiences (think of a medical journal), but for more mainstream audiences they need to engage more senses in their media than simply reading.  This too creates the need for content management strategies.

Crowdsourcing has been an amazing phenomenon and we'll still continue to get twitter streams from the person who happened to be the first one to stumble upon a bus wreck or tornado funnel cloud formation, but I don't see the average blogger being willing to trudge through the start-up phase of blogging when if they are successful the prize is a $500 per month add-on to your verizon or comcast bandwidth bill.

All that being said, I believe there is an opportunity for the providers of high value original content, (especially in the realm of business, economics, finance, etc.) to open up channels of communication to explore how syndicates might be formed for mutual benefit.  If nothing else, simply a social exchange of ideas on how "carpooling" not only creates a format for idea exchange, it also can cut the individual transportation costs by 75%.

Basically, what the author is saying is that those sites (even those high traffic sites) that don't have a plan for truly value-added content from the net neutrality rules implementation point looking forward will have simply garnered a large amount of traffic that will end up being a financial liability to support.  Many new media types can attest to the fact that the pure advertising business model is both thin and fickle. I would love to have my readers thoughts and comments on this topic.

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Last modified on Thursday, 06 January 2011 14:50

5 comments

  • Comment Link Greg Saturday, 08 January 2011 13:01 posted by Greg

    If your writer is correct, then content on the internet will become just and bland and homogeneous as television. Since that would defeat (one of the) purpose(s) of the internet, I think that it would follow that the number of active internet users will drop dramatically.

    I definitely believe that an absence of real net neutrality would be a deep flaw in marketing strategy from the standpoint of providers of both content and other internet services.

    Also, it's important to note that there exists no meaningful limitation on interested parties who wish to form their own networks. While that would obviously be a setback to users in the very near term, the very same factors that caused the internet boom in the first place would come into play and at least some of these "under-nets" would grow and succeed.

    So, I think that for a non-neutral Internet to succeed, *much* higher barriers to entry for alternative network providers would have to be erected.

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  • Comment Link fedwatcher Friday, 07 January 2011 16:38 posted by fedwatcher

    Reggie,

    Thanks for your reply. My desire for an iPad has deminished.

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  • Comment Link Andy Friday, 07 January 2011 04:33 posted by Andy

    Reggie,

    "I'm not a PC" - to use a very well known phrase, but I do have connections who seem to know alot about how the internet is organized. According to some, websites such as Google are only a collection of databases, and it ought to be fairly easy to construct our own database of IP addresses, and share them with others. I guess all we need is appropriate software to make it a easier.

    Anyway, by posting my comment, I hope others can clarify the issue of net neutrality further and enlighten us how to avoid 'big brother.' (At present, I use Ask Jeeves as I don't like supporting huge 'corpopolies.'

    Best wishes for 2011 ...

    Andy

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  • Comment Link Reggie Middleton Thursday, 06 January 2011 17:44 posted by Reggie Middleton

    Even on nearly pure text sites such as craigslist or wikipedia still have potentially debilitating bandwidth and server maintenance bills. That, more than anything else is probably the reason they are mostly text to begin with. As the commenter stated above, those sites that generate high traffic, yet are able to exist on meager ad revenues due to the lack of universal metering of bandwidth will not be able to do so if the net access was tiered against them. The author of the note runs a site.

    Even having a lead in summary can strain bandwidth and server resources if you have a popular site or even a popular article. The lead in only works if the user goes through the homepage. If he gets referred through a link, he/she will load the full page, unless it is chopped up for the sake of page views, which is an impression generating trick that also causes server churn and irritated viewers.

    The only reason why video formats (read flash) play better on PCs than iPhone/iPads is the fact that Apple has not included the heavy duty graphics chips needed to smoothly decode flash when it is streaming. This horsepower saps battery life and creates heat, but it also allows you to view most of the web. I feel that Apple may have to fold on this gambit as Flash is continuously fine tuned for efficient playback (adobe is practically fighting for its dominant position) and graphics chip tech gets more efficient re: battery use as well.

    Re: Youtube, when bloggers embed or provide links they also cede control to Google, partficularly revenue generating opportunities. Granted, Youtube makes it easy, cheap and convenient, but it does so for a (profit) reason. Imagine if the entire web ceded their video infrastructure to Youtube in order to avoid costs created through Net Neutrality. No wonder Google came to tunes with Verizon!!!

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  • Comment Link fedwatcher Thursday, 06 January 2011 16:11 posted by fedwatcher

    Reggie,

    The bandwidth requirements of sites on the web vary. There are blogs which load a lot of graphics and large pages and others which load as a summary with links the reader can select to continue to a given page. There is also the different formats that play better on a PC than an iPhone or iPad.

    When the cost rises, attention will be paid to well designed sites and tools to develop well designed bandwith efficient sites.

    As to YouTube videos on blogs, the blogger has the choice to "embed" or provide a link.

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