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Anderson: Discouraging trends for the open, ad-supported web

Chris Anderson and Tim O’Reilly duke it out over Anderson’s article in Wired The Web Is Dead. Long Live the Internet

Both the article and the debate are worth a read, because the people’s open content revolution might be coming to an end as the big powerhouses again consolidate content behind closed paid walls, facilitated by apps.

In the debate, Anderson arguing about the bleak future of free, ad-supported content on the web, writes:

the trend lines for the open ad-supported side of the commercial content Web are not encouraging. Google aside, most companies are seeing disquieting limits to the standard ad-supported model. CPMs are in decline in key categories such as business and technology, in part because of the inventory glut created by closed ad markets such as Facebook. For traditional media companies, from Hollywood to the print and music industries, the hope that analog dollars would turn into digital dollars via advertising has dimmed. They briefly got to digital dimes, but now it’s heading to pennies, rather than quarters. Many have concluded that there’s no light at the end of that tunnel.

Thus the attractions of the walled gardens, forgoing the traffic from the open Web in favor of a more differentiated experience that people will pay for (in the language of my last book, going from Free to Freemium). At risk of a somewhat media-centric perspective, that part of our cultural marketplace seems to be losing faith in the Web. Sure, there’s a lot more to culture these days than traditional content providers, but if you follow the money, it appears to be heading towards the closed platforms.

So the Web as a cultural phenomena is as strong as ever, but the Web as a business phenomena (at least as far as content goes) may have reached its limits. That strikes me as a relatively historic moment in this digital revolution’s history.

O’Reilly counters:

Again, I have to disagree. You’re putting a boundary (web vs non-web) where one doesn’t exist. It’s all Internet. Advertising business models have always only been a small part of the picture, and have gotten way too much attention.

Amazon has never been an advertising play. Neither has ebay, Orbitz or Travelocity, or any of the millions of direct to consumer e-commerce websites, except to the extent that those sites are themselves advertisements. We don’t make money at from advertising, but we do advertise our products via our own content – most of our conference attendees and a great proportion of our book sales are driven by the content we publish. And now with ebooks and mobile apps, we have enormous opportunities to drive our ecommerce to new heights, because we’re able to sell our content to people around the world who were out of reach of our print distribution or in-person conferences. And social media is making the network ever more powerful as a way of selling stuff to people who want it…

I’m delighted that the Internet economy is getting richer and more complex. It’s called maturity.

So I’ll agree that the web is dead if you will agree that a child is dead once he or she becomes an adult. But frankly, I don’t see it that way. The child lives on, but changes as he or she grows older.

Finally, Anderson’s take on the child to adult analogy is:

At the end of the day, whatever works for all concerned will win. As the Web moves from adolescence to adulthood, idealism is naturally giving way to pragmatism.

Personally, I will root for idealism.

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