Beyond the sham of a ‘free’ Internet

October 31, 2005

The notion that Internet content is generally “free” is one of the cyberworld’s most cherished lies.

In fact, Internet economics is complex and bizarre. It consists of overlapping levels of subsidy, direct payment and covert transfers, along with under-the-table bribes to Web users for personal information most of us don’t know we’re giving up.

But free it’s not. One way or the other, somebody’s always paying. Usually, that’s you.

A great deal of content is funded through straight-up subsidy. Stories, weblogs, commentary — much is produced by people whose day jobs spill over onto the Web. If the authors are freelancers, they are providing uncompensated labor. This column may be picked up by any number of blogs and read by people who pay nothing for it. They think it’s free; it’s not. It costs me plenty, in time and sweat. In these cases it’s the content producers who do the paying.

If the content is posted by media organizations on “free” sites, the online audience may not pay, but the offline audience does. The cost is reflected in the subscription price or the ad rates charged for, say, the newspaper’s print edition. One set of customers is likely paying to inform and amuse another set of customers, one of the less charming features of “free” cyberspace.

More and more content is funded by stealth: furtive marketing devices that enable audiences to be identified, targeted and hit with sales messages. The keywords you plug into your Google search — Google auctions them to advertisers to get their pop-ups alongside the search results. Your Web-based e-mail — it’s paid for by marketers who buy the right to scan messages for telltales that qualify you as a potential customer so they can put ads on your screen.

Are those services “free?” True, you don’t pay with cash. But you do pay, with precisely the same things you normally sell for dollars — your time and attention.

This isn’t a trick of language. It’s important to realize that all of these models are systems of payment, which extract costs from someone and confer benefits on someone, often someone else. Somebody’s always paying. Print subscribers pay for services used by online readers. Consumers of advertised products pay, through their purchases, for Web sites. Forget “free.”

The problem is that none of them offers a clean, simple, logical way to do what markets are supposed to do: Enable buyers to pay sellers for what they use — and here, to ensure that content producers are compensated by the people who benefit from their creations.

The ideal would be an arrangement in which producers are rewarded for the value they create. Naturally, that is tough to measure, but quantifying value is exactly what markets do. It would be reflected in the numbers of people who read or view the content, and that would be only part of the picture. Specialized content of intense interest to fewer people would command higher prices. So pay rates would have flexibility.

Such are the broad lines of an Internet content market. Producers would be credited when their content was downloaded. They could code their content, setting a price. If the work originates with a news organization, its account would receive the micro-payments.

Hence, the system would be engineered to register not only charges but credits, since Internet users are often information sources. If you upload content viewed by others, you’d benefit from offsets against your usage. You’d not only be a paying customer, you’d be a paid producer.

At the end of the month, along with your other utility bills, you’d be charged directly for your Internet activity. And the producers of content that you used would be paid for the value they created — not for the advertisers or employers they helped feed.

This would require assembling a generalized payment system. But standardization wouldn’t be any tougher than the Web protocols or domain naming systems that have long been in use, and the technical sophistication couldn’t be any greater than the diabolically complex wizardry that is used right now to track, record, compile and resell all kinds of data about what you do online.

It may be fanciful, but the alternative isn’t pretty. That’s what we’re lurching toward now, an extravagantly costly system of producer subjugation wholly dominated by the goals of sales and manipulation, arrayed under the banner of freedom.

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