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everybody’s advertising everybody else

How does one make money on the internet, or rather on the Web? One close friend of mine insists that the way to go is to make all content free and make money off ads included in the content. The problem I see with this approach is that if all content is free who’s going to be paying for the ads, who are going to be the advertisers willing to spend their hard earned cash to place an ad in your ‘free’ content’? The bottom line is who’s going to be footing the bill for the free ride that is the web?

The Internet is a unique communications medium that lets you, potentially, reach millions of customers all over the world, but what will you be offering them? What sort of product can you sell? Naturally if you have some sort of a real life product offering, like generic Viagra or some T-shirts or books or whatnot, the model kind of makes sense, you just create an internet presence for your company, your website becomes your retail outlet, you try and make it as easy as possible for the visitors to your site place orders and pay you and then you handle everything else in the real life back end, i.e. you actually ship the product to the customer.

But dealing with real life products is messy  and involves a lot of money, you can’t really bootstrap as you have to buy inventory which you have to store somewhere etc. Well potentially you could, for instance by getting in touch with the manufacturer of some product which you think is under-represented on the web and offering them to push their product on their behalf for commission, but that’s a different business model. (which is worth exploring btw.)

So, anyway, all those get-rich-quick books about how to make money online with no start-up capital, they basically all focus on one thing, the so called ‘information’ products. These may include e-books, or some audio seminars in other words you become a content creator and then you sell the content that you create. The web becomes your advertising vehicle and the Internet becomes your delivery system. There is one little problem with this approach and that is that with modern technology copying content is a breeze, any fool, literally, can do it and before you know it the very content that you created in the hope of making millions and that you’re charging for on your official website, becomes available for free on bittorrets or file sharing sites. I’m not aware of any research into what percentage of original digital content whose creators intended for it to be paid for actually gets consumed by people who pay for it and what percentage is used by people who simply get it free off file-sharing services or bitTorrents. My totally wild guess would be about 20% of paying customers versus 80% of free riders, I might be wrong though. It probably also depends on the price of your content and how easy it is to get it by paying a reasonable fee as opposed to spending time searching for a free download.

So if we know our content is going to get ripped off anyway, why not just offer it free of charge and pay for it by including ads in it? The problem with this approach is that if you’re a start-up, it’s very doubtful there’s going to find enough advertisers willing to pay for placing ads in your content. (well in time once your content has become really popular the situation may change of course). And then in a purely hypothetical situation where all content creators follow this route, would there be enough advertisers for everyone?

The purpose of this slightly incoherent piece is to pose some questions rather than provide ready answers

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